Sunday, April 10, 2011

Not A Surprise, Las Vegas Gambling Numbers Drop in 2010

The Las Vegas Convention and Visitors Authority published its 2010 visitor profile which indicated the continued downward trend in gambling, due to the economy. From the report, "eighty percent (80%) of 2010 visitors said they gambled while in Las Vegas, down significantly from 87% in 2006, 84% in 2007, 85% in 2008, and 83% in 2009."

The report is quite extensive, and I encourage you to download and peruse as it contains information on gambling, entertainment, demographics and traveler statistics. The report can be found at this link. Although the report is focused on Las Vegas, in my opinion, the information contained should have some utility for any venue with brick and mortar casinos.

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Sunday, March 27, 2011

Wynn and Caesars Online Poker Push

In a sign that the major brick and mortar casino operators in the US are making the move toward internet gambling, both Wynn Resorts and Caesars Entertainment lock up deals with internet gaming companies. Wynn announced a partnership with PokerStars and Caesars received Nevada Gaming Commission approval of a relationship with subsidiaries of 888 Holdings.

There shouldn't be any doubt that the trend in the US is that in the not too distant future, internet poker will be legalized. From that point, only a few years will pass and I anticipate full internet gambling (with the exception of sports betting) will be legal. If New Jersey prevails in its lawsuit against the US Government over the constitutionality of PASPA, sports betting could also become legal. This won't happen overnight, but the big US players are getting ready.

The Wynn Resorts story can be found here and the Caesars Entertainment story can be found here.

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Sunday, March 20, 2011

Internet Gambling Bill Reintroduced In Congress

The blog at posted that Barney Frank has teamed up with a REPUBLICAN representative from California, John Campbell, to reintroduce the Internet Gambling Regulation, Consumer Protection, and Enforcement Act. I'll give it to Barney for persistence, but the chance to get this bill through was last year, when Democrats controlled the House. With Republicans now in charge of the House power structure, this seems like a longshot.

It will be easy to predict that this bill goes nowhere and likely that will be the outcome. But not so fast. With the economy in horrible shape, and the federal budget in even worse shape, a strange thing may happen: economics will trump "morality." If Congress needs the cash, they'll grab at anything (usually they grab at our wallets - quite well I might add). Maybe they latch onto this as it might be easier to pass this initially than a tax hike. Congress likes raising taxes too but I digress...

A recent post highlighted some of the advantages of internet gambling. You can read that post here. Maybe you can get your Representative to read it and admit that internet gambling is here to stay, so why not regulate like the UK?

A very tough hurdle for the bill will be getting past the House Financial Services Committee, which has a staunch anti-internet gambling person now at the helm, Rep. Bachus. Will budget needs outweigh personal bias? Who knows?

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Sunday, March 6, 2011

Internet Gaming Is Good For The Gambling Industry!

In the November, 2010 issue of Casino Enterprise Management, William Thompson extended his remarks made to the National Council of Legislators from Gaming States in June. He prefaced his hypothesis with the explanation of his gambling economic model and how the majority of his analyses show that gambling actually draws more money away from host communities.

With regard to internet gaming, his opinion is that "legal internet gaming will improve the value of the gambling product for the consumer, for the gaming operator and for the government." [1]

In sum, here are some of the generic reasons in favor of LEGAL internet gaming:
  1. Will stimulate business for brick-and-mortar casinos as the internet gaming can promote visits/patronage of the host brand (big brands such as Wynn, Caesar's, LV Sands likely to benefit most)
  2. Gives consumers more choice of internet gaming sites, games, odds and payouts
  3. Consumers in total control of gaming environment (smoking, dress code, alcohol). Want to gamble naked? You can on an internet gaming site (do turn off your webcam...)
  4. More visibility with regard to identification of consumer and level of play. Excellent for more control/amelioration of problem gaming.
  5. Easier for governments to precisely determine how much gambling is going on in their jurisdiction from each site, making any taxation determinations very accurate and precise.
The key is that when internet gaming is authorized and operators are allowed to obtain licenses, that the licensing regime needs to be as inclusive and non-judgmental as possible, to allow as many sites as possible to come clean and turn over a new leaf. If that happens, maximum benefit to the government will accrue. Otherwise, the operators shut out of the licensing regime may just continue to operate in "outlaw" status, with local governments gaining nothing.


[1] Thompson, W., (2010, November), Value Added: Internet Gaming, Casino Enterprise Management, 149.


Thompson, W., (2010, November), Value Added: Internet Gaming, Casino Enterprise Management, 148-150.

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Saturday, February 26, 2011

Singapore Casinos Post Solid 1st Year Numbers

AsiaOne News reports that for the first year of operation, the two licensed casinos in Singapore, Resorts World Sentosa and Marina Bay Sands have done quite well. Although specific casino revenue isn't directly reported by the Sentosa resort, estimates for combined casino revenue likely exceed $2 billion US dollars. This is a very nice result for just the first year of operation.

From the article, "PricewaterhouseCoopers predicted that Singapore would overtake South Korea and Australia this year to become the second-largest Asia-Pacific casino market behind traditional leader Macau." If accurate, Singapore is becoming a big Asia-Pacific casino player at breakneck speed.

Out of curiosity, I wanted to see how Singapore casino revenue compares to Nevada. I reference an article in the Las Vegas Sun, which states that Nevada gaming revenue to recover to pre-recession levels by 2014. From the numbers in the article, Nevada gaming revenues for 2010 are likely in the $10 billion to $11 billion range. Singapore, with just two properties, is already about one-fifth of Nevada's gaming revenue. Singapore has done quite well.

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Sunday, February 13, 2011

Should Dealers Keep Their Tips? Yes!

Casino Enterprise Management is a good trade magazine. It is one I read cover to cover each issue. One of the regular contributors is Bill Zender, a gaming consultant and former Nevada Gaming Control agent.

He penned a recent article making the case that casinos should allow dealers to keep their tips. As of now, the vast majority of properties do not do this, but have dealers pool their tips. Of the casinos that do allow dealers to keep their own tips, Native American casinos are the trendsetters.

The article has a list of pros and cons. They are:

  1. Increases levels of customer service, which keeps the customer playing longer and motivates the players to return in the future. Also decreases the effect of player desertion based on gambling loss.
  2. Increases game pace which increases decisions and revenue.
  3. Gives dealer a sense of ownership. Ownership increases morale, attendance, job longevity and positive work conduct.
  4. Helps to retain and attract better employees.
  5. Allows the operator to increase each dealer's time on table which lowers payroll expense.
  1. Increases the possibility for theft and illicit dealer help.
  2. Increases the chance dealers might deviate from procedures with players who tip well.
  3. May result in money layoff between the dealers and the person responsible for doing the scheduling.
  4. If the tips aren't reported by the dealer accurately, this failure to report could result in a number of employees getting into serious trouble with the IRS.
  5. If under the present tip pooling agreement the dealers receive vacation tips, allow adequate time for vacations before rolling into the new tip procedure." [1]
I don't have a beef with any of the pros. With regard to the cons, I think there are ameliorating factors that can lessen the impact or probability. As casino security and accounting measures have improved (CCTV cameras, RFID cheques, etc.), the risk to dealers of being quickly detected if stealing tokens or assisting players is much higher. If a fair and formulaic staffing procedure is implemented, that will help eliminate the ability for dealers to "tip" a staffing supervisor.

The last two con arguments are still valid. However, those cons still apply regardless of tip scheme. All of us need to accurately report income. With regard to vacation tips, implementing a bit of a runway before changing the tip procedure should take care of that issue.

Overall, Mr. Zender's argument is sound. With the increasing popularity of online gambling, brick and mortar casinos need to sell the experience. Great dealers are part of that experience.


[1] Zender, B., (2010, December), Motivating Your Dealers: Letting Them Keep Their Own Tips, Casino Enterprise Management, 103.


Zender, B., (2010, December), Motivating Your Dealers: Letting Them Keep Their Own Tips, Casino Enterprise Management, 100-103.

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Sunday, February 6, 2011

Hawaii Again Considers Gambling

KITV reports that the Hawaii legislature is considering legal gambling. Specifically, the current proposal is to allow slot machines and video poker machines in hotel and resort properties. It is a good start, but not really the best. Hawaii should allow full casino gambling in their hotel properties. Slot machines and video poker will generate good revenue to be sure, but the addition of table games would be the attractant to pull the full measure of gambling visitors, particularly Asian patrons, who enjoy Baccarat.

I posted about this topic last year, which you can read here. Casino gambling is a great fit for resort properties. The patrons will enjoy outdoor activities during the day, and enjoy gaming during the evening. The property will garner great revenues both day and night.

The time for this has come. Hawaii, you have the chance to become THE gaming/resort destination in the US. If you added top-notch entertainment, you may beat Las Vegas at its own game. I don't think Las Vegas would want you legalizing gambling. If they don't, does that tell you something?

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Sunday, January 30, 2011

Evidence of Consolidation in the Fantasy Sports Industry

The fantasy sports industry is moving to a maturing stage. The large growth numbers seen just a few years ago are gone. The current recession/depression has done its share of impact but also needs to be acknowledged is the fact that the large fantasy sports sites are taking over the lion's share of the industry.

Sports leagues and sites like CBS Sports, Yahoo and ESPN are becoming the top-tier/dominant players. See the previous post on the fantasy sports business. The site has a recent post regarding consolidation in another area - reporting. As the winners of the game sites are becoming clear, so also the winners of the content/news regarding fantasy sports.

The net of the story is that the freelance writers who were the more of the "pioneers" are being moved out when the big boys realized there was something here that had interest (and viewers/clicks/etc), and not just a bunch of loser geeks talking to themselves (like this blogger!).

Quoting from the article, "There are no plans for Sporting News to retain our freelance fantasy writers, sadly. I hope other sites strongly consider taking a look at these guys’ work."

This doesn't mean that fantasy sports is failing or becoming stale. Far from it. However, the early days are over and the teenage/adult years are upon us. The large operations, whether providing, games, news, analysis, decision support, will be the main drivers of the fantasy sports industry moving forward unless new entrants can provide some innovative spark that the big players can't match. That will likely have to be something that contains some kind of intellectual property as opposed to just content and opinion, which the big players can emulate.

Are there new kind of fantasy innovations on the horizon? Perhaps, but I won't say more at this time. Stay tuned.

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Thursday, January 13, 2011

Australian Gambling Snapshot

Casino Journal magazine in its November edition published a synopsis of the Australia Productivity Commission's "Report on Gambling." This organization focuses on problem gambling, so the findings are used to help this agency and the Australian government to help ameliorate the harm. From my perspective, the findings just highlight just what a big gambling environment exists in Australia.

"The report found that 70 percent of Australians participate in some form of gambling. In 2008-09, total expenditure (losses) reached just over A$19 billion, an average of $1,500 per adult who gambled." [1] Seventy percent of a tier 1 economy that gamble? Awesome! Gamble enough such that per adult revenue to gaming purveyors is A$1,500 per year? Bonus! Australia is a great gaming market. I don't mean to make light of problem gambling and the devastation that accrues to the individual and their families. These numbers regarding how many gamble and how much is striking.

The report mentioned a few trends which are of note. The first is that real spending per gaming device player has risen over the years. In one jurisdiction, the rise in a ten-year period was over A$1,000 per player. Next, Australian casinos are facing competition for high-value customers due to increased Asian casino competitors. This isn't necessarily news as Las Vegas is likely facing the same threat from Macao and now Singapore properties. The final trends mentioned were that sports wagering has been growing and so has online gambling. With regard to online gambling, the estimate is that online gambling win in 2008-09 was in the A$800 million range. Compared to overall gaming win of A$19 billion, that is only about 4 percent, but the potential for online gambling to grow is there.

Overall, Australia is a strong and thriving gambling market.


[1] Rutherford, J., et. al. (Editors) (2010, November), The Problem With Australia, Casino Journal, 10.


Rutherford, J., et. al. (Editors) (2010, November), The Problem With Australia, Casino Journal, 10.

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Thursday, January 6, 2011

Conventional Wisdom Now Figuring Out Las Vegas Needs To Do Something

The Las Vegas Sun had a recent article discussing how Las Vegas had to "reinvent the wheel" in order to adapt to the current economic and demographic reality. Here's the key quote from Bill Eadington of the University of Nevada, Reno:

“Newness, which has long driven Las Vegas growth, will not be part of the immediate future,” said Bill Eadington, director of UNR’s Institute for the Study of Gambling and Commercial Gaming. “Las Vegas may become yesterday’s news unless it can figure out a new way to reinvent itself.”

Let's take a peek at a few of the issues facing Las Vegas:

1. Beaucoup hotel rooms built during the boom added to a large existing base
2. Economic recession/depression (depending on if you have a job or not)
3. Competition for US casino patrons from tribal and other casinos closer to home
4. Competition for Asian casino patrons from newer, closer venues in Macau and Singapore
5. Vegas prices aren't all that inexpensive anymore like the old days

Other than that, what's the problem, right? We won't even mention the competition from online gambling.

With regard to the number of hotel rooms, I found this document on the Las Vegas Convention and Visitors Authority website. In Las Vegas, the current estimated number of hotel rooms is 150,732. That is a LOT of rooms. How many? Here's how many... If the hotel rooms in Las Vegas were its own city, it would be the 158th largest city in the United States, just ahead of Alexandria, Virginia (based on 2009 Census data). As another reference point, there are 276 cities in the United States with populations over 100,000. This is just assuming one person per room. Assuming 1.5 people per room, Las Vegas hotel rooms would be the 87th largest city in the US, just ahead of Lubbock, Texas. Assuming that a hotel needs 70% occupancy to break even, Las Vegas needs on average over 105,500 of those rooms to be filled every night. That is a tall order.

I've posted quite a bit on Nevada, the impact of the economic downturn and increased competition. For those interested, you can read the most recent of the related posts, here, here, here and here.

The article discusses in very general terms what Las Vegas needs to do. The aforementioned Las Vegas Convention and Visitors Authority conducted a survey. The findings? Customers want transparency, value and variety. Forgive me for being obtuse but what the heck does that mean? Quoting again from the Sun article, "research indicated Las Vegas should focus its scarce marketing dollars on people who need an excuse to travel here and those interested in the city who don’t know much about it and need more details to be persuaded..." Who doesn't know about what Las Vegas is about? Go ask people at random, "what's Las Vegas all about?" You really think they'll say, "gee, I don't know anything about Las Vegas?"

Las Vegas needs to get back to fundamentals. What is Las Vegas' nickname? Yep, Sin City. The three B's - Booze (lots of it and low or no cost), Babes (see link to post below) and Bucks (good games, low takeout/don't nickel and dime your gambling patrons). That's what Las Vegas needs to get back to in order to survive, in my opinion. Unlike the experts, I give you concrete and thought out recommendations! I posted about this type of approach with regard to how the Reno and Lake Tahoe markets could combat increased competition from tribal casinos in Northern California. It may be time Las Vegas considers something similar.

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Saturday, January 1, 2011

Fantasy Sports Maturing as Lawyers Now Involved

I suppose a sign of the maturity of any industry is the appearance of lawyers. In this case, the appearance fills a unique need - the disputes that can arise in fantasy sports leagues. Until now, if a trade appeared unfair, players added/dropped possibly outside alloted time windows, collusion by league participants, etc., the disputes had to be handled by the league commissioner, who more likely than not was also a league participant and in some cases was one of the parties to the dispute.

Now there is a venue for impartial hearing of these disputes - For a fee of $15 per dispute or $100 for a season package (since when were lawyers this cheap), you can get your dispute heard. Not happy that your rival traded for Michael Vick for a case of beer, pizza and a date with his sister right before he played you in a crucial game and your commissioner is a wimp? Take them to fantasy court!

The concept is so new and interesting, even the magazine of the American Bar Association did an article on the site. The article can be found here. With fantasy sports having potential to deal with very large prize monies (see previous post on high-stakes prizes in fantasy sports), the potential for disputes to arise that have very large economic consequences. Right now, this is an informal forum, but the time may come where a high-stakes fantasy dispute ends up in a real court.

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