SHORTLY after Mark Frissora took over as chief executive of Caesars Entertainment last year, he paced the floors of his American casinos, with their rows and rows of idle slot machines, and grasped the scale of the existential threat that faces his industry. Casino customers are ageing, and younger people have little interest in taking their place. Mr Frissora called on his company to brainstorm a new “casino within a casino” to draw in millennials who grew up playing video and mobile-phone games.

Next door on the Las Vegas Strip, Jim Murren, CEO of MGM Resorts International, the city’s largest gaming operator, is making similar moves. Mr Murren has convened a committee of millennial employees to work out how to keep the business relevant to future generations. Both firms will soon open experimental spaces for young people, including new types of slot-machine games that test players’ skills as much as their wallets.

These offer a glimpse of a casino of the future that looks very different indeed. There are gravity-free rooms where you can literally climb the walls; LED screens that continuously change interior backgrounds; and combinations of gambling machines and virtual-reality shoot-em-ups that allow you to bet on how many monsters you (and your friends) can blast away. Instead of individuals standing solo at one-armed bandits, groups of players might compete against each other over wireless-enabled consoles offering a menu of wagering games. Instead of magic acts and yesterday’s pop stars, electronic-sports tournaments and the latest in live music will draw in spectators.

Hip, high-tech casinos sound like a lot of fun. But they may not come into being. Building and maintaining them would be expensive, and in the end they still might not appeal to younger people. More to the point, gambling executives may not have the stamina to see the projects through. Most of them today are curiously short of two things: free cashflow and, above all, the readiness to gamble big.

“The industry is not filled with creative geniuses,” says Mr Frissora, who came to Caesars from Hertz, a car-rental company. Casinos used to make a lot of money and didn’t need to innovate. That has changed. Smartphones and consoles make traditional slots and table games look stodgy. The list of new competitors for their customers’ attention—daily fantasy sports contests, legal and unregulated internet gambling, video lottery terminals, online social casino games (played with virtual currency)—goes on and on. Some people worry that casino firms will become like Blockbuster, a film-rental business annihilated by the internet. Alex Bumazhny of Fitch Ratings suggests they might become like Xerox machines, used less frequently but not entirely obsolete.

The signs of stagnation are clearly visible. Gaming revenues on the Las Vegas Strip peaked at $6.5 billion in 2007, fell in 2010 to $5.2 billion and then rose modestly (see chart). In Atlantic City revenues have halved since 2006. Nationally, state-regulated casino-gaming revenues (including from Las Vegas and Atlantic City) have grown by just 7% since 2007, to $40 billion last year, despite greatly expanded offerings. The states of Pennsylvania and Maryland, which had no casinos until a decade ago, now account for more than $4 billion in gaming income (in part, by taking away customers from Atlantic City). Revenue from operations on Native American territory has risen by only 12% since 2008, to $29.9 billion last year.

Wheel of fortune

The world’s biggest publicly owned casino companies would now be in worse straits if not for a couple of things. One was a change in how Las Vegas made its money. Two magnates, Sheldon Adelson and Steve Wynn, led its transformation in the late 1980s from Sin City to a convention and entertainment destination. Mr Adelson built the Sands Expo and Convention Centre, the first private convention venue in the city, and Mr Wynn built The Mirage, a casino resort with 3,000 rooms—and white tigers—that opened in 1989. Everything built on the Strip since has been an attempt to build bigger, better Mirages. The strategy has worked there—non-gaming revenue now accounts for almost two-thirds of all money that comes in, much of it from hotel rooms. Outside Las Vegas, however, casinos still depend on gaming revenues. The lack of fresh thinking to attract new dollars is painfully apparent.

The second boost came from the rise of Macau as a gambling destination for Asians, especially Chinese. Starting in 2003, the year before Mr Adelson opened Sands Macao, the territory’s first big casino backed by foreign money, gaming revenues there rose by 12 times in a decade. In 2013 they reached $45 billion, which is equivalent to nearly eight Las Vegas Strips. Macau’s ascent cushioned the blow of the 2007-08 financial crisis at home.

In recent years China’s president, Xi Jinping, has dealt the territory an extremely poor hand. His anti-corruption campaign, and tighter government supervision of the flow of money in and out of Macau, have decimated the territory’s VIP baccarat business. Revenues fell by 34% in 2015 to $29 billion and were down another 11% in the first half of this year. Yet Macau may still benefit from the emergence of the Chinese upper middle-class, despite Mr Xi’s crackdown, and it remains the closest thing there is to a growth story in casinos.

Mr Adelson and Mr Wynn, along with Mr Murren at MGM, have invested heavily in expanding further there. In August Mr Wynn opened the $4.2 billion Wynn Palace, a luxury destination for high-end gamblers. To coincide with the opening, Macau had its first small monthly uptick in gaming revenues (1%) in more than two years. On September 13th Mr Adelson opened the Parisian Macao, a 3,000-room resort on the Cotai Strip (costing $2.9 billion) complete with a half-scale Eiffel Tower. (MGM Cotai, a $3.1 billion casino, will open next year). Mr Adelson, now 83, appeared at the opening, one hand on a man’s shoulder and the other gripping a walking stick as he took the stage to announce: “I’m still around”.

But Macau’s rise has only delayed the industry’s reckoning with the problem of its ageing customer base at home. Slot machines, for example, account for only 5% of Macau’s gaming revenues (baccarat makes up most of the rest) but the majority of American casino earnings. The Las Vegas Strip, for its part, can continue to expect modest increases in non-gaming revenues. Casinos everywhere else are badly stuck. As Mr Murren notes, many have become commodities. That’s a bad business, he says. The typical casino floor today welcomes visitors with loud carpeting, cavernous rooms and an ocean of slot machines. Even on the Strip, young nightclub-goers pass by the gaming areas.

The industry is not best-placed to do much about its lack of appeal to the young. Casino companies and slot-machine makers are heavily indebted, an overhang from the financial crisis and a series of debt-financed projects and consolidations. Wynn Resorts, for example, has $9.5 billion in debt, partly from building in Macau, compared with $1.1 billion in annual earnings before tax, interest and depreciation. Caesars is only now emerging from bankruptcy. High interest payments have kept Las Vegas Strip operators in the red for much of the past decade.

Even so, it would not be impossible for them to invest. But they would have to answer questions from shareholders. A strategy that takes away traditional slot machines or gaming tables that older people are known to like, to take a chance on something new for the young, is hard to buy into. Even though Mr Frissora and Mr Murren, among others, have made it clear that they want new types of games to attract younger customers, established makers of slot machines, themselves heavily indebted, have evinced little interest in undermining their existing business with costly, experimental new games.

Mr Frissora, for instance, wants to open up their gaming platforms to allow young players to choose their games and compete against each other on the casino floor. Instead, slot-machine companies have innovated on the margins, says Melissa Price, an executive at Caesars. They are now housing traditional slots in sleek new cabinets with “skins” from hit television shows such as “Game of Thrones”. These make money but they are not game-changers, she says.

Startups have been readier to invent. At the Global Gaming Expo in Las Vegas in September, crowds lined up at the booth of Gamblit Gaming, a California startup, to try out its wager-ready version of The Brookhaven Experiment, a virtual-reality first-person shooter game. Players can bet on such outcomes as their accuracy in shooting down monsters. The game should be ready for casinos in a year’s time. GameCo, a New York startup, is expected to be the first to market with such a “skill-based” game this month, when Caesars installs a small number of so-called “Danger Arena” slots at its three casinos in Atlantic City. The video-game gambling machine, as GameCo calls it, is another first-person shooter (with no VR headset), in which the enemies are vicious robots.

Inside the industry, some executives look askance at what Caesars and MGM are planning. Video-arcade-style games might appeal to the young, they say, but not in large enough numbers to keep casino revenues high. One argument that traditionalists make is that once millennials have some money in their pocket, a bit later on, they will come and gamble at a conventional casino just like their parents did. Mr Frissora says he’ll be taking the other side of that bet.