For the first time, high-end restaurants were touted, not buffets. Nightclubs actually sold drinks…in an environment where almost every drink was given away. Entertainment was no longer Tom Jones and boxing — two proven draws for gamblers; you saw hip-hop artists, rock bands — namely any act that could actually sell out a venue. And then came the arenas as properties added 3,500- to 7,000-seat entertainment venues to capitalize on the new trend.
The end result? For Las Vegas the Mirage was the template mega-resort as destination, and Las Vegas itself was marketed as one mega-mega-resort. The fact is Las Vegas is the only U.S. gaming venue that is a destination in and of itself and consequently immune to the ravages of competition…at least as long as trade shows don’t go the way of Second Life (moving to a virtual world) or another 9/11 doesn’t ravage the airline industry.
But what about Atlantic City, Tunica, Gulfport, Laughlin, and other casino operations? They will be hurt — no doubt about it. Atlantic City is already feeling the heat from Empire City (a racino at Yonkers Raceway in New York) and Pennsylvania (and all the slot parlors aren’t open yet). Gaming revenue was off 2-4% (over 2006) early in 2007, and that figure jumped to over 7% in October. Wait until the first snowstorm on a Friday that effectively wipes a weekend off the calendar…15-20% year-over-year declines will be commonplace.
The industry is already gearing up to answer the problem in their usual way: they’re waiting. Why? One casino executive was quoted in the Atlantic City Press as saying, “Until we get to the point in the beginning of next year where we’re comparing ourselves to the period of time where Philadelphia racinos came online, we’re just going to continue to see these declines.” True genius…the year-over-year comparisons won’t be as bad…the numbers will still be lower…but it just won’t seem as bad. With management like this you know they’re in trouble.
What can they do? The answer is easy but difficult to achieve. They must reinvent themselves as destinations. The reality is that it will be done on a property-by-property basis because no gambling venue can ever become Las Vegas. Every property must think outside the box to provide exclusive offers that cannot be delivered anywhere else by anyone else.
But for an industry whose solution has usually been to lower room rates (look at Laughlin, NV, in the early 90s when December room rates dropped to $5 per night midweek at some properties; it was $15 at the “high-end” Flamingo Hilton), that case study proves there needs to be another way out.
What can a property do? Technology offers a number of viable possibilities. I wonder how long it will be before any of the following are even tried…let alone adopted by everyone in the industry:
- To promote player loyalty (and stave off having its best players go to another property — especially when the weather is bad), I propose that a casino allow its players to use the points on their Player Reward Cards to activate online slot machines. Since no money changes hands, I believe a test case could be made that this is a legal venture.
- New electronic poker tables are used at Mohegun Sun, the Seminole Hard Rock properties in Florida, and other properties. Since no cards or chips are used, it would be incredibly easy for a venue to create outdoor poker parlors to take advantage of weather and create a new playing environment.
- Slot machines are moving to server-based technology. With the “guts” of a slot machine on a hard drive, rather than inside the machine, the games can be changed at will. But I believe the real benefit is that it will allow a forward-thinking casino an opportunity to go Wi-Fi and provide players with hand-held slot machines that can be played anywhere — on the beach, in the restaurants...even in the rooms.
For more techniques and strategies, please write to Wayne Schaffel, President, Public Relations Network, 4 Martine Avenue, Suite 417, White Plains, NY, 10606; call
917-903-0309; or email waynehschaffel@aol.com.
