AC, Vegas gamblers lose less

The revenue numbers for January are out, and they are not good, if you are in the casino business or are supported by it. From Bloomberg:

Casino gambling revenue dropped 15 percent on the Las Vegas Strip in January and tumbled 19 percent in Atlantic City last month as the U.S. recession curbed spending on travel and betting.

Casino proceeds on the Strip, the biggest U.S. gambling center, slumped to $510.4 million in January, Nevada’s Gaming Control Board said today in an e-mailed statement. That extended the worst annual decline on record, as Las Vegas began the year with thousands more hotel rooms and fewer visitors to fill them.

Betting proceeds at Atlantic City, New Jersey, the second- biggest U.S. casino center, fell to $310.3 million. Revenue from tables at the seaside town’s 11 casinos fell 20 percent to $96 million, while slot-machine play contracted 19 percent to $214.3 million, the New Jersey Casino Control Commission said today in an e-mailed statement.

Visits to Las Vegas are expected to decline 3 percent to 4 percent this year, Rossi Ralenkotter, chief executive officer of the Las Vegas Convention & Visitors Authority, said in a Feb. 4 interview. Passenger flight capacity remains almost 15 percent less than a year ago, he said. Meanwhile, developers are preparing to open more than 13,000 new hotel rooms in 2009.

Las Vegas Strip, Atlantic City Gambling Keeps Falling Update1 – Bloomberg.com.

Too bad you can’t bet the “don’t” on casino stocks. You’d be making out pretty well.

As I’ve said before, the spin that editors put on gaming revenue increases and decreases is telling. When gambling revenues go up, people are losing more money, which is usually not cause for celebration. Somewhere, people have to be cheered that their compatriots have gotten less unlucky in casinos. Many of them, it seems, are making the guaranteed break-even play and staying at home.

With visitation and airline capacity off, things are going to get quite interesting on the Strip when that extra room inventory comes online. That’s interesting, as in they’d better figure out a way to attract more people to Las Vegas, or you’ll have some big problems.

New podcast up

This morning I was lucky enough to get a few minutes to interview Dr. Bill Eadington, director of the University of Nevada Reno’s Institute for the Study of Gambling and Commercial Gaming.

The Institute has two programs that I think will be of particular interest to a wide audience. The first is the Graduate Certificate program, which provides a great, flexible educational opportunity for those who are looking to learn more about gambling.

The second is the 14th International Conference on Gambling and Risk-Taking, which is being held in Lake Tahoe this May. If you are at all interested in any aspect of gambling, you really should attend. Here’s a quick description:

This conference traces its origins back to 1974, and is recognized as the premier academic and research oriented conference in the world, bringing together international experts, representing a diverse array of disciplines, to examine and analyze gambling from many perspectives. Leading researchers from academia, research organizations, and governments, along with leaders and representatives from commercial gaming industries, regulatory agencies, and the helping services–as well as professional gamblers and the general public–have gathered at prior conferences to present and evaluate their research findings, discuss current trends and new technologies, and explore the changes and challenges created by the increased presence of commercial gaming to citizens throughout the world. In May 2009, the experts will gather again, near the shores of beautiful Lake Tahoe.

I’m thrilled to have had my presentation proposal accepted, and I look forward to seeing a lot of you at the conference.

This podcast episode is a real gem–short, but packed with good stuff.

Utah gambling ahead?

Utah is one of two states that has no legal gambling, but that might be changing–online at least. From the Salt Lake Tribune:

Prominent poker players have teamed with big Las Vegas casinos to push for a law legalizing — and heavily regulating — online gambling.

Utah Attorney General Mark Shurtleff likes the idea, as long as it doesnt lead to tribal casinos or other forms of gambling in Utah.

"It is going to happen anyway, lets put some regulation in place," he said.

Shurtleff heard a pitch from the Poker Players Alliance during the spring meeting of the National Association of Attorneys General in Washington, D.C.

Shurtleff on legalized gambling: Deal me in – Salt Lake Tribune.

The article is unclear about whether this means online gaming would be OK in Utah, or whether Utah would agree to online gaming as a state option, much as terrestrial gambling is now. If its the former, that’s quite a change from past policies.

Poker Player archive

About three years of Poker Player Newspaper are now online. There isn’t much indexing, but there are contents for some of the issues. It’s a great resource for poker history.
Poker Player Newspaper :: Back Issues.

An approach they won’t use

Sheldon Adelson’s drive to find America’s most boring city notwithstanding, most people agree that Las Vegas’ tourist strategy might need a little tweak. Should the town emphasize value, or carefree fun? It’s a serious question.

Here’s one approach that I don’t think we’ll be dusting off anytime soon: Las Vegas, home of weapons of mass destruction.
nuclear tourism

Yes, that is a real postcard dating from the 1950s, when above-ground nuclear tests were one of the top tourists attractions in town. This is not an accurate representation since the test site was north-east, not due west, but I guess a mushroom cloud blossoming over the Union Pacific depot was considered more photogenic.

Man, we were into some weird stuff fifty years ago. I shudder at what they’ll think of us fifty years from now.

What’s the Netbook of the Strip?

I got some ideas about the possible future of the Strip’s hotel inventory by reading this Wired article on Netbooks, which are ultra-cheap, low-performance laptops that are good to connect to the Internet and not do much else:

Netbooks have ended the performance wars. It used to be that when you went to an electronics store to buy a computer, you picked the most powerful one you could afford. Because, who knew? Maybe someday youd need to play a cutting-edge videogame or edit your masterpiece indie flick. For 15 years, the PC industry obliged our what-if paranoia by pushing performance. Intel and AMD tossed out blisteringly fast chips, hard drives went on a terabyte gallop, RAM exploded, and high-end graphics cards let you play Blu-ray movies on your sprawling 17-inch laptop screen. That dream machine could do almost anything.

But heres the catch: Most of the time, we do almost nothing. Our most common tasks—email, Web surfing, watching streamed videos—require very little processing power. Only a few people, like graphic designers and hardcore gamers, actually need heavy-duty hardware. For years now, without anyone really noticing, the PC industry has functioned like a car company selling SUVs: It pushed absurdly powerful machines because the profit margins were high, while customers lapped up the fantasy that they could go off-roading, even though they never did. So coders took advantage of that surplus power to write ever-bulkier applications and operating systems.

What netbook makers have done, in effect, is turn back the clock: Their machines perform the way laptops did four years ago. And it turns out that four years ago more or less is plenty. "Regular computers are so fast, you really cant tell the difference between 1.6 giga and 2 giga," says Andy Tung, vice president of US sales for MSI, the Taiwanese maker of the Wind netbook. "We can tell the difference between one second and two seconds, but not between 0.0001 and 0.0002 second." For most of todays computing tasks, the biggest performance drags arent inside the machine. They’re outside. Is your Wi-Fi signal strong? Is Twitter down again?

Netbooks are evidence that we now know what personal computers are for.Which is to say, a pretty small list of things that are conducted almost entirely online. This was Asustek’s epiphany. It got laptop prices under $300 by crafting a device that makes absolutely no sense when its not online. Consider: The Eees original flash drive was only 4 gigs. Thats so small you need to host all your pictures, videos, and files online—and install minimal native software—because theres simply no room inside your machine.

The Netbook Effect: How Cheap Little Laptops Hit the Big Time.

Let’s apply this to the Las Vegas Strip. If you look at the Strip’s hotel inventory, it’s been getting nicer, but also pricier, over the past few years. The average room now has far more amenities than it did ten years ago. It’s bigger, plusher, and much friendlier on the eyes.

The question is, how many people coming to Las Vegas want a mega-suite? Sure, a lot of people will be using these “features” of their room (the equivalent of running Photoshop on a laptop). But many of them will look at them, go “Oh, nice,” and then spend 95% of their waking time outside the room.

This was, traditionally, why Vegas hotel rooms were nothing to write home about. It was a model that served the Strip well for many years.

Of course, there are tons of people who love the new, “feature-heavy” rooms, and are willing to pay for them. It would be short-sighted to neglect this segment of the marketplace. But what about people who don’t want the hotel room equivalent of a computer to play graphics-heavy video games on? What about people who just need a room that (to use an analogy) gives them just enough to be able to check their email and surf the web?

Could upscale casinos offer no-frills rooms for significantly less than their regular ones as the hospitality equivalent of netbooks? It would be a room with no fancy tech, no designer accents, no separate tub and shower. It’s clean, but not stylish. It’s not for people on a romantic trip together–it’s just for folks who need a place to crash for a few hours.

I’m not saying that Bellagio should rip out the Tower Suites and thrown in rows of bunkbeds. But if I was running a Strip casino, I’d want to know exactly what my customers were looking for, and find out if the key to giving them what they wanted might be giving them less.