In the last issue, we
concluded with an
example of the old-time
great customer service
for gamblers. Today,
almost nothing like that
exists, and most of the
time nothing like that
is possible. Those of
you who are the
executives of the
casinos know and realize
these mistakes.
Unfortunately, many of
you are hamstrung by the
restrictions placed on
you. It is a vicious
cycle, and one that
results in the
bread-and-butter of the
casino industry being
eroded.
Only 10-15 years
ago or so, the vast
majority of casinos’
profits came from
gamblers and the casino
operations. The figures
were around 60-70%. Now,
the latest figures
indicate that barely 40%
of the casino resort’s
proceeds come from the
gamblers, from the
casino. The rest comes
from all the “other
stuff,” the frills and
the attractions, a
really distasteful word
describing the rides,
and carnival like stuff,
arcades, balloons,
roller coasters,
shopping centers, and
fancy restaurants where
you pay a thousand
dollars for a one inch
piece of meat and a pea,
and so on. This makes
many modern casinos look
like something other
than a casino. And this
also infects Midwestern
and tribal gaming,
although to a lesser
extent.
The problem sits
with the operators and
the casino executives.
They have all lost the
art of marketing to the
gamblers. They seem to
have lost interest in
the gambler. They are
shaving the casino’s
operating margins to a
point where it will
eventually kill the
goose that lays the
golden eggs. Pretty soon
they’ll have great
hotels whose rooms cost
more than the customers
can afford and great
restaurants to which
only the super-rich can
go.
What they will not
have are the gamblers.
The whales will no
longer come, because the
casino operators are
killing off their
environment. And the
burger-and-fries crowd
will eventually stop
coming as well, because
they won’t pay the $200,
$300 and even $500 or
more per night room
rates that some casino
hotels already demand.
And as the gamblers go
elsewhere, the corporate
bosses will want to know
more and more where the
profits are going. The
billion dollar debts
will require income, and
so they will have to
raise the prices, lower
the payouts on the
games, increase room
rates, reduce staff,
lower the overhead and,
soon, close their doors
and shut down, just like
what happened to
Binion’s, and to others
in recent history.
This
is happening largely
because of the owner’s
lack of knowledge of
gambling, but that is
only one of the symptoms
of the larger problem
that infects every
casino operation
today.
You ask, what has
all this to do with the
original premise of the
article? What was that
example? Well, there are
many examples to be
explored among the
situations I have shown
in this column. The one
to which I was referring
has to do with slot
operations at a very
large casino, but the
example has a point that
is more far-reaching,
and is applicable to all
the range of issues that
I have shown so far.
This
particular casino
operation was, and is,
extraordinarily
successful. It had gross
proceeds in the hundreds
of millions, and even
billions of dollars.
But, their executives
realized that there was
something wrong with
their slot drop.
Although the numbers
were very good, there
was something more that
was expected, and should
have happened. The
problem they noticed was
that while their
customers were playing
with really great
financial numbers, the
longevity of their play
was suffering. Although
this property had enough
customers to keep their
machines humming most of
the time, the executives
wanted to know why each
individual player was
playing only such a
short time. They
investigated, and
couldn’t find the
answer. So, eventually,
I was asked to find
out.
My team and I spent
about four weeks
studying this property,
and playing the games,
and observing patterns
of play, as we do during
our engagements of this
type of research.
Eventually we found the
problem.
This casino, at
the time, used primarily
coins in their machines,
although many of their
machines were also
equipped with currency
validators, and some
with early ticket
printers. The customers
liked the coins, and so
the coins were used, and
still are. The main
customer base was also
older. Women and men in
their 50s and 60s, and
even some older. Fewer
players in their 40s and
fewer still younger than
that. So why were the
casino’s results below
expectation? I will tell
you the rest of this
story in the next issue.
— Victor H. Royer is the
author of more than 20
books on casino games
and gaming. His books on
Slots, Video Slots,
Keno, and Video Poker
are consistently at the
top of the best-seller
lists. His books are
available in major
bookstores worldwide,
from the Gambler’s Book
Shop in Las Vegas
(1-800-522-1777), or
Amazon.com. For other
links, visit his web
site at:
http://hometown.aol.com/vicnvegas/myhomepage/newsletter.html
