Atlantic City Casinos Biting the Dust

It appears the Atlantic City gambling establishment is reacting to Governor Christie's warning to shape up quickly.  As was predicted in an earlier post, how Atlantic City will deal with this warning is to retrench and close up some properties.  That is now happening.  The Atlantic Club casino closed in January and the Showboat casino will close in August.  It is reported that the Trump Plaza casino will close in September.  If the Revel casino can't find a buyer to rescue it and it closes, that would leave Atlantic City with just two-thirds of the major casino properties it started the year with.  Losing one-third in two-thirds of a year is a huge hit to the Atlantic City economy.

To save Atlantic City, a game changer is needed immediately.  Sports betting may be that game changer.  Now the raw revenues from sports betting will not be sufficient, but the fact that something new and unique to Atlantic City is in play will help draw casino patrons from competing jurisdictions like New York, Massachusetts and Pennsylvania.  It also helps New Jersey compete with sports betting that is currently underway in Delaware.

Can casino gaming in Atlantic City survive?  Time will tell.

Big Money Heavyweights Fight Over Gambling

Fighting over gambling usually isn't about gambling, it's about who gets the money from gambling.  There are a couple of recent news articles that highlight this fact very well.  The first is an article about a couple of casino heavyweights (Genting and Las Vegas Sands) fighting for expanded gambling in Florida.  That article can be found here.  Now, the opposite side is Disney, which although not exactly pro-gambling, is pro-theme park and wanting to maintain their stronghold without new competition for tourism and convention dollars from additional casino gambling venues.  This no doubt is a money fight.  The argument isn't really if gambling is good or bad as Florida does allow casino gambling (eight Indian casinos are authorized).  However, a study did purport to state that new full-service casino resorts would generate an additional $1.5 billion in spending.  You know who is really winning in this fight?  Politicians and lobbyists.  Money is coming into the political fight big time.  The saying goes, "money is the mother's milk of politics" and milk is surely flowing into Florida's gambling expansion battle.  Note that Las Vegas Sands, controlled by Sheldon Adelson, is on the pro-gambling side in Florida.

Now the same Sheldon Adelson is backing the front group Coalition to Stop Internet Gambling, which is attempting to get Washington DC politicians to stop internet gambling.  So fight for gambling in Florida, but fight against gambling in Washington DC.  I'm confused...

Now, this coalition is being opposed by the Coalition for Consumer and Online Protection, backed by MGM Resorts and the American Gaming Association.  The story on that development can be found here.  Isn't it interesting that these players construct these proxies with names that sound good, but aren't really what they are about?  What if these industry heavyweights named their front groups in a way more in line with their objectives?  What if you had groups named Group that Opposes My Competitors From Making Money That I Can't Capture Because I Didn't Grasp the Market Opportunity or Group that Opposes Anything that Might be Good for that Guy Because Perhaps I Don't Like Him and it's Personal?  Wouldn't that be refreshing?

Again, lobbyists and politicians are loving it as the money is coming in!  Do you think this fight will be over soon?  As long as the money is coming in, the politicians and lobbyists really don't have an incentive to see this issue get resolved.  Stay tuned.

Atlantic City Gets a Warning

New Jersey governor Chris Christie is laying down the law on Atlantic City's casinos.  He is giving them the year of 2014 to make strides to improve their financial health.  The Press of Atlantic City story quotes Christie:

"It's obviously a critical year because we need to begin to see progress in Atlantic City or we're going to start considering alternatives," and, "It's a year when we have to show some significant results."

Can't be much clearer than that.  So, what happens if results aren't obtained?  Well, Atlantic City's casino gambling monopoly would be at risk.  Competing interests, such as the horse racing industry, are desirous of getting casino gaming at their properties.  Another lackluster year out of Atlantic City would only fuel that fire.

How Atlantic City will intend to meet this hurdle is to consolidate - reduce the number of casinos and to an extent, reduce the number of hotel rooms.  The remaining casinos would hopefully be in better shape as they will make more money on a per property basis, even if the result would be less overall revenue, from both gaming and non-gaming sources.  If not, the competing interests will want to move casino gambling outside of Atlantic City to make their venues more competitive with increased casino gaming in adjoining states like New York, Pennsylvania and Delaware.

Time may be running out on Atlantic City's casino monopoly.

Common Sense: Casino Gaming Needs to Return to Cuba...Viva Casino!

Professor Nelson Rose, an expert on gaming law, penned a recent article entitled, "Cuba Needs Casinos."  In it, he describes past and recent history and noted how when liberalization comes to Cuba (it will, just a matter of time), that casino gaming and the revenues generated therefrom, will help bring Cuba back economically.

They had gambling back before Castro, but organized crime took in the lion's share of the revenues.  Now, with regulated wagering in place, all parties will benefit.  Notice that governments, even authoritarian ones like Vietnam and China, have casino gambling.  It is become apparent that the issue with gambling from governments is not the right or wrong with gambling; it's who is getting the money.  If the government is getting enough money, in its view, gambling is fine.

That fact bodes well for Cuba.  Proper regulated gambling, coupled with the great resort venue Cuba was, and will be again, makes Cuba an excellent bet for gambling reintroduction.  I'm betting on Cuba reintroducing gambling within the next ten years.

Another venue that is a great opportunity for casino gambling is Hawaii.  Why there aren't a casino resorts on Waikiki, Kona, Maui and Kauai is a travesty.  If Macao and Singapore are enjoying great casino gambling success, just think what success a resort venue like Hawaii would enjoy?  They do well now with regard to tourism, but add casino gambling and Hawaii would rival Macao and Singapore with regard to casino revenues.  This similar resort locale profile is why there was interest in opening casino gambling in Miami a couple of years back.  Sooner or later government will see the light and make a play for that revenue.

As gambling becomes even more mainstream, gambling will be increasingly viewed as a painless tax.  If locales like Havana, Miami and Maui embrace casino gambling, Las Vegas will have even more worries.

To check out more of Professor Rose's excellent articles, go to his website.

New Tribal Casino Near San Francisco Offers Close Alternative to Nevada Casinos

Nevada casinos have been facing the threat from California tribal gaming for years.  Having a large property within an hour's drive from San Francisco ups this by a couple of notches.  The San Francisco area has around 11 million people.  Having a large gaming property within a 60-90 minute drive can not be good news to Lake Tahoe and Reno casino properties.

The Casino Journal reports "after years of planning and 16 months of construction, Graton Resort & Casino officially opened its doors to the public earlier this week. The $800‐million facility is the closest full‐service casino to the Bay Area, and ushers in a new level of sophistication and excitement to Northern California."  The property will have 3,000 slot machines and almost 150 table games, along with over a dozen restaurants.  This is a big operation and will definitely draw, in my opinion.

What is new is that with this property near San Francisco, this property might draw customers that would have traveled to other Northern California tribal casinos.  A previous post regarding a tribal property near a large metro area is here.  Do not be surprised if more tribes will attempt to build facilities as close as possible to the major population centers.  That effort might run into trouble with regard to on/off reservation regulations regarding properties, historical lands and the like, but with so much money in gambling, the trend is set.  Another post regarding tribal casino economic impact can be found here and a post highlighting the strong competition California tribal gaming is to Nevada casinos is here.

I've discussed earlier what Reno and Lake Tahoe casinos could do to combat this threat.  It is controversial in nature, but desperate threats could make controversial solutions more palatable.  To learn about what Nevada casinos could do to differentiate themselves from California casinos, read this post.

US Land-based Casino Gaming Revenue Still Not Back to Pre-recession Levels

The June issue of Casino Journal magazine included a quick story derived from the recent AGA State of the States report.  The main point stated was that commercial casino (brick and mortar) gross gaming revenue (GGR), the amount won from bettors, was almost back to pre-recession levels.  To support that, a chart showing those revenues from 2003 to 2012 was published.  At first glance, it appears correct.  However, these numbers don't take into account the impact of inflation on the value of those dollars.  If inflation eats away the value of currency, a greater dollar amount in the future may not be truly more money if compared to earlier years.

I took the CPI data from those years and adjusted the annual gross gaming revenue to equivalent 2003 purchasing power, to see how much of the improved revenues are due to industry growth, or just the inflation of the underlying currency.  Here's the chart showing both sets of data:

Sources:  American Gaming Association, Casino Journal, US Department of Labor

So, you see that GGR is higher in either case, but when taking inflation into account, not that much higher.  In the AGA published data, GGR increases at a compound annual growth rate (CAGR) of 2.96% for the period 2003-2012.  That's not terrible given the recession.  When inflation is factored in, GGR CAGR is a measly 0.48% - much worse.  Gross gaming revenues are basically flat for the last decade.  That is not a sign of a thriving, bright industry.

Wait, there's more!

Going back to the 2004 and 2013 State of the States reports, the AGA reported 443 casino facilities in 2003 and 979 in 2012.  What that means is that in the last decade, the number of brick and mortar casino facilities in the US more than doubled, with overall GGR remaining flat in constant dollar terms.  Now do you see why the land-based casino companies are deathly afraid of more casinos and the dreaded online gaming operators?  If you have to spend tens of millions to a couple of billion dollars to construct a facility, how do you make back the money invested in an industry where profits are flat?  You have to take market share from competitors, who will not allow that to happen willingly.

In my opinion, those casino operators that have facilities the closest to major population centers will be in a much more survivable position than those located farther away.  I see this industry becoming extremely cutthroat in the future, particularly if online gaming becomes more established, further siphoning off revenues from the land-based casinos.

References:

AmericanGaming.org. (2004). 2004 State of the States, The AGA Survey of Casino Entertainment. Retrieved from: http://www.americangaming.org/industry-resources/research/state-states

AmericanGaming.org. (2013). 2013 State of the States, The AGA Survey of Casino Entertainment. Retrieved from: http://www.americangaming.org/industry-resources/research/state-states

Anonymous. (2013, June), Gaming industry revenues almost back to pre-recession levels, Casino Journal, p. 8.

US Department of Labor, Consumer Price Index 1913-2013, Retrieved from:
ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt

Can You Really Beat Craps?

There is a school of thought (albeit a minority) that thinks you can turn the house odds on craps to the player's advantage.  I won't go into the various schemes in detail, but the concepts deal with betting systems and patterns, counting the number of rolls a shooter has while still not making their point, setting the dice before throwing and how you throw the dice.

There hasn't been any solid research that proves that craps can be beaten or in other words, no research that shows how the house advantage can be swung to the player's advantage like in blackjack.  Yet these theories continue to exist.  Proponents may be able to show evidence that using their techniques, some positive results have occurred, but that is more explained by short-term variability and low number of trials observed.  These techniques will be unreliable as the long-term mathematical advantage takes over.

For example, let's say I have a craps theory that says you need to blow on the dice and say "no seven" before throwing.  I do that for five throws.  The first four throws indeed are not seven, but the fifth throw is a seven.  Can I say that my system gives an 80% chance of preventing a seven from being rolled?  Sure.  Would you be willing to risk your money at a crap table using that advice?  I certainly hope not.

What got me on this topic was an article in the October 2012 Casino Player magazine.  The article described various techniques of throwing the dice to obtain an advantage.  For a legal throw, the dice need to hit the far wall, so they hit the wall and bounce off the rubberized surface.  The wall of the crap table is lined with rows of pyramid-shaped spongy material, which when the dice hit, tend to have the dice bounce back and in a slightly different direction.  The intent is to keep the dice throws random.  If no such rule existed, players might just line up the dice the way they want and simply drop them on the table or do things that don't really qualify as a roll.  Given this rule, dice rolls are random enough that the game still keeps its mathematical house edge.

Players that desire to use dice control to help their chances try and throw the dice so that the dice get all the way to the far wall, touch it, but just barely.   Their desire is to roll the dice so that their number is up and it is up right at the far end, but not have enough energy to actually bounce off the far wall.  Ahem...  Like that happens with any regularity.  Also, at a busy table, how does the shooter avoid hitting other betting tokens on the table before hitting the far wall, thwarting their efforts?

This article goes in a different direction.  This article states you need to throw the dice so that the dice hit the tips of the rubberized pyramids in such a way that the dice bounce back directly in the line of throw.  I laughed so hard when I read that I was crying.  The author even states that it would be doubtful for even the most expert of "dice controllers" to acquire this ability with any degree of consistency.  Regardless, the author introduces the reader to such phrases of Newtonian physics such as "double point hit," "single-point pop," and "stoopball effect."

I have two degrees in electrical engineering, which require a certain amount of courses in physics, statistics and materials science and I've never heard of such terms.  I'll need to go back to my university and request a refund of my tuition.

So why does the author put this on paper?  Well at the end of the article, it is disclosed that the author has books which you can buy to learn all about beating craps, to include a DVD showing how to throw the dice.  Also the author has a book on how to beat slot machines...riiiiight.

Social Casino Games Win Big

Source:  (2012, September) SuperData.

VentureBeat highlights the research findings of SuperData, which shows that social casino games will earn $1.6 billion in revenues this year, climbing to $2.4 billion by 2015.  Social gaming is coming on strong.  With the transition to more casino-type gaming for social gamers, this group is a key target for those operators in jurisdictions where iGaming becomes more prevalent, or even legal for the first time.  The SuperData report focuses on slots, poker and table casino games, so other skill games like fantasy sports doesn't appear to be included, adding even more revenues to this area.

You can find earlier posts that discuss the blending of skill gaming and wagering here and here.

Casino Screws Up, Points Finger

Last April, players at a mini-baccarat game noticed the same sequence of cards being dealt.  Being smart, they started upping their bets.  When the casino finally figured out what was going on, those players had won $1.5 million.  Wow.  The casino of course thought the players were cheating.  That wasn't the case.  What happened was that the casino was putting new decks of cards into the game without shuffling them first.   HAHAHAHAHAHAHAHA  How stupid.  Casino Operations 101 - you SHUFFLE cards before you put them into the game.

The casino, the Golden Nugget Atlantic City, relied on the promise from the card manufacturer that the cards were pre-shuffled.  But when things started weird, wouldn't you think that it would take less than 41 winning hands before they would do something like shuffle cards?

To the casino's credit, they have paid out over $500,000 of the winnings, but to their discredit have not yet cashed about $1 million.  In addition, the casino has sued the gamblers stating the game wasn't "fair."  Really?  Oh, yes, the casino is also suing the card manufacturing company.

Let's say the casino is right to obtain relief from the card manufacturer.  But pay the players their winnings.  In fact, tout the big win, smile, tell the world that not all players may do this well but when players win, the casino is HAPPY FOR THEM.  That kind of good customer service and recognition is what gets customers to want to visit.  Treating customers badly and suing them for winning, due to your screwup, is bad customer service and what gets customers to not want to visit.

The full story can be found here.  What do you think?

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.

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:

"Pros

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.
   

Cons

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.

Citations:

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

References:

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

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?

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.

Harrah's Loveman Off Base in G2E Keynote Speech

Gary Loveman, the president, chairman and CEO of Harrah's (now Caesar's) Entertainment, gave one of the keynote speeches at this month's Global Gaming Expo in Las Vegas. The premise of his speech was that the casino industry is getting a bum rap and its not fair that the industry is more heavily and unfairly regulated as opposed to liquor and fast food industries. Really? I was there in person and I had a hard time not breaking out in laughter.

This wasn't the only poor reasoning expounded by the leader of the company that introduced 6-5 blackjack to Las Vegas and then whines how it's difficult to expand his business to get more people to play his chump games, but I digress...

He stated that due to regulation, casino businesses aren't that widespread. He showed a global map showing the relatively few locales around the globe that have casinos and used that to state that the industry has lots of room to grow, if not for politicians and regulators operating under unfair assumptions. Maybe there are some unfair assumptions regarding the casino industry, but the history of Las Vegas is history. Organized crime was heavily involved and therefore the casino industry due to that history will ALWAYS be heavily regulated and scrutinized. That's not going to go away.

But that's not my main criticism of this line of argument. Loveman claims that due to this regulation and restriction on casinos that people can't enjoy themselves with gambling when they want. THAT IS NOT TRUE. What these folks in the brick-and-mortar casino industry need to get through their heads is that if someone wants to play poker, a slot machine, bingo, roulette, etc., they can do that ONLINE....RIGHT NOW....FROM THEIR HOME. They don't need to come to your casino. If you have an internet connection, you can gamble - period. They don't need to travel to your facility. If your facility was someplace customers really wanted to visit, they'll come. If the games at your brick-and-mortar casino tend to nickel-and-dime your customers, regulations are the least of your worries, in my opinion.

The other off-base argument I'll mention is that he tried to equate gambling with constitutional rights such as freedom of speech and freedom of religion. Hey, Loveman, last I checked there's no "Lucky 7th Amendment" in the US Constitution prohibiting Congress from infringing the right of the people to bear the handle of a slot machine. This was a really stupid argument. Again I had a hard time not laughing. To be fair to the audience, they were well behaved and didn't laugh either...or they agreed with Mr. Loveman, which means the land-based casino folks are in really deep trouble when online gambling finally becomes legal in the US. When? Don't know, but it's only a matter of time.

The Las Vegas Sun has an article on Mr. Loveman's address, which you can find here if interested.

Tribal Casino Lowers Gambling Age

UpperMichiganSource.com reports that the Little Traverse Bay Band of Odawa Indians has lowered the minimum gambling age at its Odawa Casino from 21 to 19. The change should be implemented by the end of the year.

It is apparent that there was no restriction from the State in order for the tribe to make this operational change to the casino on its tribal lands. However, the change did have to go through the tribal council. The Little Traverse Bay Band of Odawa Indians Tribal Council passed the bill and it was signed into law by Tribal Chairman Ken Harrington.

Since legal age of adulthood is 18, it may be only a matter of time for minimum gambling ages to be lowered to 18. In several jurisdictions, you can play the state lottery at 18, but not in a casino until 21. So, the age restriction for casinos may not be as much in order to protect innocent youth as opposed to the providing the state lottery the best chance to grab as much money out of a young adult's wallet.

It would be expected that tribes that have this latitude to change the minimum age to gamble to eliminate this state advantage, but not to lower the age below 18. Generally, the minimum age to gamble is in the 18 to 21 range, although in Missouri, a person as young as 16 can play charity bingo.

Singapore Casinos Not Content Limited To Asia

The new casinos in Singapore are doing quite well. You can see my previous posts on the Singapore casinos here and here. The UK Independent has an article that states that Singapore is doing so well they already the 2nd largest casino market behind Macau after barely 6 months in operation.

What is amazing is that they may actually surpass Las Vegas as the 2nd largest casino market behind Macau in the next few years. This is great news for Singapore and bad news for Las Vegas. Las Vegas is getting losing business that formerly came from Asia, making its current economic slump even worse.

To put numbers behind the popularity, Resorts World Sentosa is quoted as guest numbers are now exceeding 1 million per month, with an expectation of 13 million visitors per year. Great news for Singapore. I've said before Singapore is a great locale.

Las Vegas needs to be concerned.

California Tribal Casino Opens Hotel Putting Further Pressure on Northern Nevada Gaming

The Sacramento Bee reports on the opening of a 300-room hotel, spa and amphitheater at the Thunder Valley Casino, north of Sacramento. This is bad news for gaming properties in northern Nevada. Northern Nevada has definitely been hit by the recession as well as the explosion of tribal gaming in California. By adding lodging to their property, Thunder Valley is even that much more of a draw for gamblers that want to spend the night at a property, but not drive all the way to Nevada. This is a good move for Thunder Valley and bad for Northern Nevada.

I had a post last year that discussed a radical approach to helping Lake Tahoe and Reno hotel casinos compete - putting legal brothels in the properties. That idea was discussed in a Casino Operations class at UNLV last spring and it was not rejected out of hand by the students. What should be noted is that I'm not the first to pose the idea. The mayor of Las Vegas, Oscar Goodman, posited the same idea for Sin City back in 2007. He took some heat for his position, but an opinion piece in the Las Vegas Review Journal supported him. I do too. It makes sense for Las Vegas but makes even more sense for Northern Nevada gaming properties. In fact, it might be a matter of survival.

First Casino in Singapore Opens

February 14th marked the opening day of the first full-blown casino resort on Sentosa Island. Resorts World Sentosa, operated by the Genting Group, beat the Marina Bay Sands for the honors of being the first integrated casino resort open. The Marina Bay Sands should be open in the May timeframe. Perusing the website, the resort is not done. The resort will also be home to Universal Studios Singapore, opening on March 18th. Singapore is a great locale and this casino does nothing but enhance the attractiveness of Singapore.

Singapore licensed two large casinos in order to satisfy the growing gaming market, but only two in order to balance the benefits of gaming with the potential for abuse. An interesting wrinkle is the selective cover charge levied on Singapore citizens and permanent residents. Singaporeans and permanent residents pay a $100 Singapore dollar cover charge to enter the casino. No charge for visitors/tourists naturally.

In addition, a previous post discussed how Singapore is going to the extent of excluding patrons from the casinos that are on public assistance or have unresolved bankruptcies. That post is here. Overall, Singapore is entering the gaming market in a very measured, but well thought out manner. With Singapore's excellent central location in Asia (few major cities longer than a 7 hour flight) and excellent economy and business focus, I expect the casinos to be a success.

Should People on Welfare Be Allowed To Gamble?

Channel News Asia has a very interesting story regarding Singapore's upcoming casinos. There will be very strict regulations in place regarding the admission of prohibited persons. What will happen is that casinos will face penalties for admission of barred persons that could be as much as $1 million Singapore dollars or even the loss of the casino license. Other jurisdictions have policies and regulations regarding problem gamblers, forbidden persons and the like. Singapore is breaking new ground with what is called "third party exclusion orders."

What this means is that an outside party (like a government) is mandating certain persons to be excluded. Obviously known cheats or criminals would be normal persons subjected to a third party exclusion. In Singapore's case, the National Council on Problem Gambling is excluding people that don't fall in these obvious categories. They are excluding those that have undischarged bankruptcies and those on public assistance. This is a great idea. Why should deadbeats and welfare recipients be allowed to patronize casinos? They should be either paying their debts or getting a job, respectively.

This is something that should be implemented in the US but won't. Casinos want business and will scream if the states pushed this regulation on them but exempted state lotteries. Lotteries typically are played by lower income groups, many of which are on public assistance. People on welfare or disability really shouldn't be spending the money they get from taxpayers on gambling. Singapore, even though they are a small country, have a whole lot of common sense.

How Far Off-Reservation Should Off-Reservation Indian Casinos Be?

The Associated Press reports on the cases of Indian tribes looking to off-reservation locales for new tribal casino properties. There have been some of these off-reservation locales applications in the past, usually involving tribes that have recently obtained federal recognition and needed to acquire lands for a reservation. Some of these locations could be located near lucrative population centers.

However, there are instances of tribes with reservations located great distances from population centers attempting to locate casino properties within close proximity to those sources of customers (i.e. you and me). The story discloses that the Bush administration decided that these off-reservation casinos could only be within commuting distance of the reservation. That seems like a reasonable restriction. The Bush administration, for example, rejected 20 applications for off-reservation casinos, one an astounding 1,400 miles from the reservation. Fourteen hundred miles? Well, you can't blame the tribe for trying!

Well there's a new administration in Washington, and the Bureau of Indian Affairs is reconsidering the commuting distance rule. If the rule is overturned, and tribes can extend their casino properties far from their reservations, tribal casinos could be even more of a threat to non-tribal casino properties. What if tribes could have off-reservation casinos on Fisherman's Wharf in San Francisco, the Gaslamp District in San Diego or Times Square in NYC?

There are two options in case this rule is amended. The first deals with the recently recognized tribes and tribes with no casinos yet established. The former will of course try and locate their new reservations as close to population centers as possible, but that wouldn't be required. The latter would be tribes with reservations in very sparsely populated, remote areas. It doesn't make sense to locate a casino on those lands as there is no customer base. They will be able to locate their new casino wherever they can obtain land.

The second option deals with tribes that have smaller, and perhaps not optimally located casinos. Those tribes might want to relocate their casino to a better location, closer to larger population centers. Why keep a location when a better location might be feasible? A recent post discussed the closing of a tribal casino, one not located in a prime locale.

If this change occurs, non-tribal casinos will be in even more peril. As discussed in a previous post, Nevada casinos have been suffering due to competition from California-based Indian casinos. Ceasar's Palace can't move from the Las Vegas Strip to LA, but tribal casinos might be able to do just that. This rule, if liberally modified, could open the door to Nevada casinos getting hurt to a much greater degree than what is happening now.