Updated June Nevada gaming numbers analysis

I’ve updated the Nevada June revenue/handle analysis:

>>>Nevada Gaming Statistics: June Comparison
Statewide, Las Vegas Strip, Boulder Strip, and Washoe County figures for June, 2004-2010 read report (pdf)

This time, I added a one-page “executive summary.” The summary’s necessary because I’ve realized that while the implications of the numbers in the tables seem perfectly obvious to me, most normal people don’t get quite as intimate with the Nevada gaming statistics as I do, so a narrative summary seemed like a good idea. The “executive” part is just to make people feel more important when reading it–like if they don’t bother to look at the rest of the report, it just means they’re a busy executive with no time to waste on trivial details.

Putting these monthly analyses together requires a fair amount of work, but seeing the numbers for seven years next to each other really puts the most recent month in perspective.

This June, it was about 90% bad news–the only real positive was that baccarat handle was up considerably on the Strip. Just about everything else was down, except table handle on the Boulder Strip, so it looks like M’s getting plenty of action, even if the sub-par hold percentage meant it didn’t translate into a bigger win.

LLAP in V7

It’s Thursday, so the new Green Felt Journal is up at last:my weekend at the Star Trek convention, condensed to about 760 words, for Vegas Seven:

Anthony and Deidre Flood Jenkins are about to have the moment of a lifetime. Pavilion Room 4 at the Las Vegas Hilton might seem a funny place for this, but that’s where George Takei and Walter Koenig—who played Sulu and Chekov, respectively, in the original Star Trek—are taking pictures with fans. Anthony, who watched the show in its original run, is a bookseller; Deidre is a schoolteacher. Takei’s unmistakable baritone carries all the way through the line. The Jenkinses are about to meet their heroes.

via Trekkies teach Vegas how to live long and prosper | Vegas Seven.

Please click through and read it–this one was a lot of fun to research and very difficult to write. There were at least a dozen stories that I could have told, but this one–what we can learn from what goes on at the convention–seemed the most appropriate to the audience. Talking to Scott MacDonald and Randy Oglesby, the underlying truth of what they were saying dawned on me: this isn’t what we planned for, but this is great. It seemed that was an attitude we could use more of in Las Vegas today.

I’d like to thank everyone who talked with me over the weekend for sharing their insights and experiences. Even if they didn’t make it into the final cut, those thoughts helped me understand the convention much better.

Trying to edit this down, it occurred to me that this would make a great chapter in a book about Las Vegas–it would take five to seven thousand words to do it justice and really get into what’s going on.

I’m going to look at another facet of the convention for the Las Vegas Business Press in next-next week’s column, so keep your hailing frequencies open.

Bacc talk in LVBP, thoughts on empiricism

This week’s Las Vegas Business Press column takes a closer look at the game of baccarat, which is becoming more and more important on the Strip:

At the level of the individual casino, there are even greater swings of fortune. Unlike Nevada, New Jersey discloses separate results for each of its casinos. This allows analysts an eye into what can happen in a given month.

via Las Vegas Business Press :: David G. Schwartz : Baccarat and its wild swings crucial to Nevada.

You can read the original baccarat longitudinal microstudy here, if you want to see the numbers behind the column.

One question I sometimes get is what the value of all of these statistical studies are. The answer is that they add a very important dimension to understanding what’s happening around us, which gives us better insight into how to change it for the better. Becoming more reliant on baccarat–as its currently played in Nevada–has definite consequences for the industry and the state, some good, some bad. It’s important to talk about this as the trend is unfolding, rather than waiting until after it’sp already arrived. If everyone had been looking closer at the revenue jumps in 2005-2006, we’d probably had reacted much better in 2007 and 2008.

But numbers never tell the whole story, which is one of my issues with the “purely empirical” approach outlined by Gary Loveman in this Bloomberg profile. Gambling and tourism are hospitality industries, which start and end with customer interaction and creating an experience for the guest. Metrics are an important part of running the business, but they should support, not define, the approach. Whether you call it action, fun, or excitement, that’s what your “core message” should be.

In other words, it’s not “gamble at our casino, because we’ll offer you a competitive package of comps to get your $529 theoretical loss per trip.” It’s “come here and have fun.”

I’ve been thinking a lot about this angle because I spent much of the week at the Star Trek convention at the Hilton, where I was able to really immerse myself in fandom and talk to the people running the show. I’ll be spinning Vegas Seven and Business Press pieces out of my observations, which will also relate back to the “empiricism vs customer-centered” argument.

There were really a ton of great stories there, from both the fans and the actors.

AC aeronautical history

I’ve got a pretty interesting Atlantic City History article this month–it’s about the original Atlantic City Airshow, circa 1910. From Casino Connection:

The Atlantic City Airshow, “Thunder Over the Boardwalk,” has become a city tradition. Since 2003, the spectacle of U.S. Air Force Thunderbirds and scores of other military aircraft buzzing over the Atlantic Ocean has drawn hundreds of thousands of spectators to the city each year. Fittingly, this summer’s edition is the biggest yet. It’s the 100th anniversary of the extravaganza that put Atlantic City on the aeronautical map.

via High-Flying History | High-Flying History | Casino Connection Atlantic City.

I always learn something when I write these columns.

Book review: The Rational Optimist

Matt Ridley. The Rational Optimist: How Prosperity Evolves. New York: HarperCollins, 2010. 448 pages.

It seems like there’s always a market for doom and gloom, even though, for the most part, things have gotten much, much better for humanity over the past few centuries and even the past few decades. In THE RATIONAL OPTIMIST, Matt Ridley seeks to correct the record and point out that, hey, things are getting better, mostly because we’re good at working together.

Ridley, who’s written extensively about evolution, argues that innovation happens–and people become better off–when ideas have sex, that is, when people are allowed to trade technical, social, and philosophical concepts with each other. Like organism that use sexual reproduction, the ideas that result have a bit of each of their “parents” and are able to adapt to changing conditions. It’s a thought-provoking metaphor, to say the least.

Based on the title and what little I’d read of the blurb, I expected something pretty narrowly focused on the last 50 years or so. Instead, the book takes the reader far, far back to the dawn of human history, drawing on archaeological and anthropological evidence in support of Ridley’s thesis, that cooperation and specialization are what creates prosperity. Ridley’s clearly in the Hayek mold, stressing the importance of spontaneous order rather than top-down dictates in innovation and the creation of wealth. Sometimes, he over-reaches–I can’t join in his admiration for the Phoenicians after learning that they practiced infanticide–and he too often pauses the narrative to take gratuitous potshots at government and religion–the latter is particularly unfortunate, because I’d guess that a creed that teaches “don’t do unto your neighbor what is hateful to you” would be a pre-requisite for or at least a boon to the cooperation that builds specialization and therefore prosperity.

On the whole, though, there’s a great deal in THE RATIONAL OPTIMIST to like. The idea that trade, rather than war, has spurred innovation and human development, sounds too good to be true, but Ridley marshals strong evidence to prove his thesis. He makes some valid points about the desirability of urban life–even urban poverty–over rural poverty, and insists that a return to “self-sufficiency” would be disastrous for humanity, particularly the poorer segments of it. Advocates of the hundred-mile diet might think twice about limiting their options to locally-grown produce when they read that trade in agricultural products is essential to raising the standard of living in developing countries.

In short, THE RATIONAL OPTIMIST argues that we are all better off when we cooperate, and that things are likely to keep getting better if we keep working together–a feel-good idea, maybe, but one that we can’t afford to ignore.

New podcast: Jack Harpster talks about Si Redd

There’s a new podcast up, available on iTunes and on the UNLV Gaming Podcast page:

23-August 5, 2010
Jack Harpster, Author, King of the Slots: William “Si” Redd
In this interview, Harpster discusses his background and his new book about IGT founder Si Redd.

Listen to the audio file (mp3)

Buy the book (Amazon.com)
UNLV Gaming Podcasts

Fun interview to do–I really like talking to authors about their books. If you haven’t seen it, I reviewed the book a few days ago.

If my voice sounds a little shot, it’s because it is. I spent a few hours down at the Star Trek Convention at the Hilton interviewing fans, vendors, and several others over the din of the vendors’ room. I met some really nice people there, though, and learned about a Las Vegas-based start up, The Intergalactic Bartender. They’ve got a particularly interesting story that I’m hoping to write more about. If you’re a Trek fan or just want to see people having a lot of fun (and maybe join in yourself), head down to the Hilton this weekend.

The Burger King Revolution

It’s a happy day in UNLV gaming-land. An article I wrote a while back about how Las Vegas bounced back from the 1980s recession is out in Gaming Law Review and Economics:

MOST WHO HAVE CONSIDERED Las Vegas history have concluded that not much happened in
Las Vegas gaming between the openings of the original MGM Grand (1973) and Mirage (1989). In fact, several structural changes during the 1980s had already reversed a declining appeal. Responding to three crises—competition from Atlantic City, a national economic downturn, and the MGM Grand fire—Las Vegas casino operators began to draw more extensively on a middle-class mass market. Capitalizing on the “Burger King Revolution,” Strip casinos drew more gamblers who, on average, played less, and slot machines displaced table games as the industry’s leading revenue producer. This successful strategy broadened the city’s visitor pool and created a base for later expansion.
The Burger King Revolution: How Las Vegas Bounced Back, 1983–1989

Enjoy reading it while you can–I think that the article’s only available to non-subscribers for 2 weeks. If you’re a casino professional, you should definitely consider a subscription to GLRE, since it’s packed with informative articles.

I didn’t do too many interviews for this article–I mostly used documents–but I’ve got to say that Jeffery Silver was great to talk to. He was not only an expert on the subject, but has a keen sense of humor and was remarkably generous with his time.

Book Review: What’s Luck Got to Do with It?

Joseph Mazur. What’s Luck Got to Do With It? The History, Mathematics, and Psychology of the Gambler’s Illusion. Princeton: Princeton University Press, 2010. 277 pages.

I’m on a real book-reviewing tear. I’ve got five more in the hopper, including two for academic journals that I’ll only post synopses of here. Today I’m sharing my thoughts on a book that’s not about gambling per se, but luck.

Joseph Mazur is a mathematics professor who’s written books about math for the popular audience, and his writing style is wonderfully suited to discussing a complex subject in a friendly way. Maybe the greatest compliment I can pay Mazur is that he doesn’t come across like a professor in his writing–he’s more like a very interesting guy sitting next to you on a plane ride out to Las Vegas, who’s got several hours worth of anecdotes and an occasional mathematical proof to back them up.

What’s Luck Got to Do With It? tackles what might be the million-dollar question when it comes to gambling: why do people consistently bet against the odds? Demonstrating that he’s not approaching his subject from too great a distance, Mazur treats the reader to a debate between his uncles–two of whom are racetrack devotees, one of whom insists that gambling is a sure path to ruin and warns against feeling to sure that luck is on your side. The book essentially seeks to identify just what luck is, and reconcile it with the dry mechanics of probability and the law of large numbers. Involving history, psychology, and several examples from popular culture,the book uses its mathematical backbone to ask and answer some key questions about gambling and luck.

The book is divided into three parts. The first is an outstanding brief history of gambling from the dawn of time to about 2008. No matter what you’ve read about the topic, you’ll probably still learn something new here. Then Mazur looks into the math of gambling and luck, and relates the underlying theoretical truths that make gambling work the way it does. Along the way Mazur works in several personal anecdotes that keep the reading lively. After laying down the mathematical foundation, Mazur explains “the analysis,” or why people continue to gamble against the odds. He incorporates research about problem gambling, but also addresses non-problem gamblers, who make up the great bulk of the gambling public.

Because Mazur’s not judgmental about luck and gambling, but is analytical, the book is a winner. It’s not just a mathematician telling us that we’ll never hit a million-dollar jackpot–it’s a mathematician looking at why we continue to hope to hit that jackpot. This book should be required reading for anyone in the casino business, and anyone who spends more than a fraction of their disposable income on gambling should find it informative, if nothing else. It’s a reasoned, but also passionate, search for the meaning of luck that may change the way you look at a pair of dice–or your mortgage.

Book Review: King of the Slots

Jack Harpster. King of the Slots: William “Si” Redd. Santa Barbara: Praeger, 2010. 273 pages.

Si Redd might have had a bigger impact on American casino gambling than anyone else in the years 1960 to 1990. He’s got some big competition–Jay Sarno, Steve Wynn, and Kirk Kerkorian are a few names that spring to mind. But those three, for the most part, changed the way casino in Las Vegas look. Redd helped change the blueprint of casinos around the country, and possibly the world.

Redd was a distributor for Bally’s in the years when the slot-maker pioneered in the electro-mechanical market, creating machines with more entertainment value and higher jackpots. Without these machines, slots would likely have not eclipsed table games in revenue, as they did in the 1980s. Later, he founded International Game Technology (IGT), and did more to bring video poker and wide-area progressives to wide popularity on the casino floor than anyone else. Redd wasn’t an engineer–he was a salesman. This doesn’t diminish his important to the development of new slot technologies; casino managers needed to be convinced to give the new machines a chance, and Redd had few rivals as a salesman. He also had the vision to encourage innovation and invest in developing new ideas that others might have turned down.

In King of the Slots, Jack Harpster traces Redd’s career, from his childhood as a sharecropper’s son in rural Mississippi, to his start in the coin-operated amusement business with pinball machines and later jukeboxes, to a successful career as a machine route operator and distributor, to a second career in Nevada as a slot salesman and, eventually, manufacturer. Harpster packs an incredible amount of detail–based on exhaustive research–into this biography, giving the reader a surprisingly vivid portrait of Redd. He is to be commended for drawing on a range of sources and melding them into a readable story.

Despite his renowned philanthropy, Redd wasn’t all sweetness and light–as a hard-headed negotiator, he didn’t always make those he did business with happy. Towards the end of his life, he had a series of regulatory reverses that may have tarnished his legacy. Similarly, Redd didn’t always have the Midas touch when it came to business. It’s to Harpster’s credit that he doesn’t minimize these negatives, and they make his biography of Redd feel more balanced and more accurate for their inclusion.

Even Las Vegas and casino history buffs will learn quite a bit from King of the Slots. It’s a well-researched look into the life of an important, but undeservedly lesser-known, gaming pioneer. It deserves a place in everyone’s Nevada/gambling library.