Monthly Archives: April 2010

AC needs more than mini-casinos

April 7, 2010 3:53 pm

This isn’t the popular thing to say right now, but I’ve got real doubts about the AC mini-casino proposal. Here are my thoughts from the LV Business Press:

Both Atlantic City and Las Vegas have had a difficult recession of course, by definition no recession is easy. Atlantic City, however, has suffered much more due to increasing regional competition and that's triggered a not-so-profound re-evaluation of that city's casino industry.Atlantic City's casinos find themselves in a tough spot. Their regional monopoly, which once extended to the Mississippi River, now barely touches the Delaware. Pennsylvania will soon add table games and New York and Delaware are both considering expanding their casino industries. Gamblers, it would seem, are driving past more and more casinos on their way “down the shore.”

But in increasing numbers, they're not, which is the problem. The city's gaming revenues have fallen to 1997 numbers. Las Vegas, by comparison, has retreated only to 2004

via Las Vegas Business Press :: David G. Schwartz : Smaller casinos won’t fix what ails Atlantic City.

It’s worth saying that the most successful casinos in Atlantic City right now are the biggest ones (Borgata, Harrah’s). I’m just not seeing the ROI for something one-tenth of their size.

The article’s punch line makes it clear just how unrealistic I think the mini-casino=revival talk is.

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Tough times in AC

April 6, 2010 10:33 am

More news from Atlantic City, none of it good. From NJ.com:

Resorts Atlantic City, the nation's first casino outside Nevada, says it may not survive; another Atlantic City casino hasn't made a loan payment since last summer; and three others are in bankruptcy court.

Atlantic City's 11 casinos have been struggling for more than three years. Financial documents filed with the state this week show just how bad things have gotten.

The news was worst for the two casinos believed to be the most endangered: Resorts Atlantic City, which was taken over by its lenders in December, and the Atlantic City Hilton Casino Resort, which defaulted on its mortgage in July and could be headed for the same fate.

Resorts, formerly owned by hedge fund Colony Capital, based in Los Angeles, told New Jersey officials in a quarterly tax return that its financial challenges “raise substantial doubt about the company's ability to continue as a going concern.” It said three major storms this winter made even its projections from November look too optimistic, and “the company will be subject to severe cash shortages.”

via Atlantic City casinos struggle against tough economy | – NJ.com.

As the 2009 numbers come out, it’s clear that things are, in fact, going very badly for the city’s casinos. Casino profits fell by more than a fifth in 2009.

We’re getting close to the point where nothing will turn the ship around, so to speak, in the near future. I’ve said it before, and I’m saying it now: somebody in the city had better find a way to get more people to visit and spend money. The Borgata’s doing well, all things considered–they actually boosted their profits by cutting expenses. But there’s a very real possibility that three casinos could close outright.

I’m working on a report about historical AC slot machine performance today, and have found some interesting trends. When the casinos opened, the machines were outrageously tight–14.4% hold for mostly quarters and dollars. The hold has come down a great deal, though, and since 1990 has actually fallen by nearly 2 points, while Nevada’s has increased by about a point. Nevada slots are still looser, though.

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Nevada’s Gaming Footprint

April 5, 2010 9:59 am

I’ve got a not-so-new and probably not very exciting report up over at gaming.unlv.edu. It contains an accurate count of the numbers of slot machines, table games, and card games (mostly poker) in Nevada since 1963:

Nevada's Gaming Footprint, 1963-2009 (pdf)

A breakdown of total licenses and numbers of games, tables, and slots from 1963 to the present–restricted and non-restricted locations.

via UNLV Center for Gaming Research: Reports.

This report came out of an information request I had for the total number of slots for a few dates before online sources are available. Since the Nevada Gaming Commission’s Quarterly Report has this info, I figured that was the best place to look for it historically. Fortunately, we’ve got a run of the reports going back to 1955. Unfortunately, for the report’s first eight years no one thought to include the numbers of machines or tables being taxed.

It’s possible to back out the number of machines,etc, by dividing the total tax by the annual taxes paid, but I tried this with a few years that I had the correct info for and found that they didn’t match. In this case, no data is better than bad data.

This report includes both restricted and non-restricted locations, so we have a total count of all slots rather than just those in casinos. Basically, this report will tell you, for any given year between 1963 and 2009, how many places in Nevada were licensed to conduct gaming and how many slots, games (BJ, craps, et al), and tables (poker and pan) they had.

Some interesting facts:
From 1963 to 2009, the total number of locations increased by about 3 times, from 966 to 2,872. The number of games increased at about twice that rate, from 1,296 to 6,024. The number of slots grew by nearly 9 times, from 22,178 to 193,944. There are about 5.5 times as many poker tables in the state in 2009 than there were in 1963.

Since 2001, the total number of slot machines has declined from 217,221 to 193,944–almost 11%.

From the 1960s through 1990s, the number of slots roughly doubled ever ten years. Since then, the growth rate slowed and is now in a 9-year sustained decline.

From 2007 to 2009, the state lost 112 gaming locations.

There’s a lot that this report doesn’t cover that is in the source documents, including breakdowns on specific games. I could see doing a few more reports linking the data in the Quarterly Reports to the Gaming Revenue Reports, getting a complete picture of how many games there are, where they are located (by county), how much they make, and what percentage they hold. The biggest problem is that the Revenue Reports don’t start until the 1980s, so it’s going to be more limited than I’d like.

Ideally, I’d like to produce a compendium of table game mix for the state going back to 1931. I don’t know if that’s possible given the paucity of data from the period 1931-1955 (when there was no Gaming Control Board to centralize data collection). But we all have our challenges, I suppose.

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New UNLV Podcast: Keith Whyte

April 2, 2010 12:36 pm

From an interview recorded last week comes this week’s UNLV Gaming Podcast:

This podcast features an interview with the Executive Director of the National Council on Problem Gambling recorded March 25, 2010 at the Nevada State Conference on Problem Gambling, held at the Orleans Hotel in Las Vegas, Nevada.. Whyte talks about how he become interested in problem gambling treatment and advocacy and the current state of problem gambling research.

Listen to the audio file (mp3)

National Councl on Problem Gambling website

Quick self-test: Pathological Gambling Criteria

The interview was a real eye-opening (or ear-opener in this case), particularly when Keith talked about how the field’s changed and its current emphasis on neuroscience.

Always, you can subscribe to the UNLV Gaming Podcast on iTunes or visit the podcast page.

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Social media is cheap and effective, but…

April 2, 2010 8:31 am

Interesting story about the Las Vegas Hilton’s Twitter initiative, though the timing couldn’t be worse, coming on the heels of yesterday’s LV Sun article about the Hilton’s abysmal 4Q earnings. From hotelsmag.com:

The marketing budget for Las Vegas Hilton is miniscule when compared to multi-property powerhouse rivals like MGM Mirage, Harrah's Entertainment and Wynn Resorts. And despite being relatively late to the social media party, the hotel has picked up enough incremental business from Twitter and Facebook to convince once-skeptical executive management to fund a full-time social media coordinator position.

The Hilton’s first “tweet-up” last year drew 130 participants to the hotel—the vast majority of them as first-time guests. “It caught the attention of our executives—they said, 'Wow, you did this with nothing?’” says Peter Arceo, executive director of casino marketing. “These have become loyal customers spending money at the bar, talking about the hotel. That was the buy-in [the executive team] needed to fund this.”

Monthly tweet-ups keep growing in size.In less than a year, @LasVegasHilton has accumulated more than 23,000 Twitter followers. While other properties in Vegas complement social media marketing with heavily promoted contests, viral videos and even digital Twitter billboards, the Hilton has no social media budget, so it instead focuses on building personal relationships with brand advocates that extend beyond the computer screen into real life. “We’re trying to build solid, loyal fans and followers—people who want to come here,” Arceo says.

via Hotel Social Media On A Shoestring Budget – 2010-04-01 07:00:00 | Hotels.

Here’s the Las Vegas Hilton Twitter stream. Seems like an awful lot of #hash #tags to me. Here’s a sample post:

Have you tried #Benihana? One of The Most Popular #LasVegas #Japanese #Restaurants around. http://bit.ly/2pAF0F

If Twitter is reaping such benefits for the hotel, that’s great, since this is likely the most challenging year the property’s ever faced, including the aftermath of the 1981 fire. Clearly, though, this isn’t enough to compensate for the bigger economic problems that are to blame for the Hilton’s poor performance over the last year.

I can see Twitter helping draw a few more FIT people in, but the Hilton will rise or fall based on its convention business.

Speaking of drawing incrementally more business, it’s worth saying that the September 2008 closing of Star Trek: The Experience has left a huge hole at the Hilton. With the new movie coming out last year, I can only imagine what kind of traffic it would be drawing right now.

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Madder, leaner, Vegas

April 1, 2010 11:02 am

Since it’s Thursday, I’ve got a new Green Felt Journal for you to read in Vegas Seven magazine. This week, I talk about March Madness on the Strip:

The basketball-mad crowd covers all ages, from cigar-chomping sharp bettors in their 60s to still-in-school rowdies wearing their college colors. It skews young, however, with 20- to 30-somethings dominating in most casinos. The audience in most sports books is about 97 percent male.

The NCAA Tournament, particularly the first weekend, has become an unofficial cross-country college reunion getaway. Although many fans have moved on from the frat house or dorm television lounge and might live thousands of miles apart, they return to Las Vegas in groups of varying sizes each spring to watch the games, drink beer and enjoy what’s become the ultimate guy trip.

The tournament has become one of the biggest draws in town. While it’s impossible to directly assess its total economic impact (no one fills out a survey saying they came to town for the games), it’s acknowledged as a huge draw.

via March Madness offers peek at leaner Vegas vacation | Vegas Seven.

I used the word “crowd” three times in the story, and might have used it more, because gathering information for this story really brought to mind Charles Mackay’s Extraordinary Popular Delusions and the Madness of Crowds. Not that I’m saying that the guys betting on March Madness are deluded, but it is March “Madness,” and there are big crowds, so I guess my brain filled in the blanks.

And there was something very compelling, but very exhausting, about the atmosphere in the books. I can’t see how anyone has enough energy to do anything but crash for 12 hours, beer and other depressants of choice notwithstanding, after a day of March Madness Vegas action. It must be all the oxygen they pump into the casino.

That last sentence, my friends, is the closest I’m getting to an April Fool’s joke this year.

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