Casino Enterprise Management

Do you feel as financially secure as you did five years ago? I sure don’t. Although economists say the recession ended more than two years ago, I’m still worried, and it shows. I don’t spend as freely as I used to, and now I demand greater value for my money. You can bet casino customers are doing the same. In fact, I recently polled a handful of Las Vegas visitors to see if this was true.

During a recent flight, only one of six people I spoke with planned to gamble during their Las Vegas stay. The others wanted to gamble, but they felt that their money would be better spent elsewhere. When I asked what it would take to change their minds, the consensus was greater value. One gentleman said his local casino had “tightened” its machines to the point that gambling was no longer entertaining. To make up for it, the casino offered free cookies, which he said was nice, except the cookies lasted longer than his $20 gambling budget.

While six people might not make a study, they sure left an impression. We have an aging player base, diminishing player spend and too many machines for the customers we serve. The cost to provide our players ever-increasing entertainment options has led to declining utilization as we pass on the cost of innovations to our customers. We need to take a long hard look at these problems if we ever hope to overcome them.

In today’s gaming market, “dollar value per square foot” has been replaced with “cost per square foot.” Our industry has devolved from high player demand with relatively low supply to decreased player demand with relatively high supply. We used to concentrate more on placement than content, because if a player truly wanted to gamble, they would play regardless of what type of games we offered. That mentality no longer works.

Mature gamers realize they can choose where, what and with the explosion of the Internet, how they gamble. The Internet will provide opportunities to gamble in a safe, affordable setting within the confines of their own homes or anywhere else using an Internet-capable device. Sure, that setting lacks the social aspects of casino gaming, but that just means players will choose to socialize in non-gaming venues—especially if the value-benefit ratio is far less than they get at home.

Maybe it would help if we took some cues from the Dave and Busters of the world. These adult entertainment venues offer low-cost hourly rates with incredible value, and their player base expects little more than the entertainment they receive.

Couldn’t we do the same by combining casual games with the opportunity to win cash?

I can only imagine what might happen if we offered arcade and console-style entertainment at an hourly rate with some conventional wagering added in. Operators would get meaningful play on otherwise underutilized machines, all while creating new revenue streams. Plus, we’d have the opportunity to introduce our facilities to a new generation of active gamers who currently see zero value in the products we currently offer.

The truth is, if we don’t capture the attention of Generation X and Y soon by creating products that they understand and enjoy, Internet offerings will entice them with new and unique formats that have been designed expressly for them. Without a fundamental change in our collective mindset, our industry is headed for some extremely lean times in coming years.

What will it take to accomplish this change? Manufacturers are willing and able to fill this niche market now, and several major vendors have been working on concepts for the Internet market already. Smaller vendors are even more engaged and responsive due to their size and infrastructure—and are willing and able to work on this issue now. Players are more than ready for greater entertainment value and will reward us for the ability to play longer by coming to our casinos more often. So if both the manufacturers and the gaming public are willing to evolve, what’s the problem? It lies with the executives running the casinos and the shareholders of our facilities.

These powerful decision makers are wed to our current gaming concepts. They don’t yet see the need to change to a potentially less lucrative revenue stream for an as-yet undefined future. Bonuses and incentive packages are based on today’s profits, and changing our business plans for unproven ideas is not something executives want to bring to their board of directors. Additionally, large corporate structures in the gaming industry inhibit creativity and innovation by their very nature.

Liability, dwindling customer base and escalating overhead are issues that plague too many of today’s gaming venues. For many casino executives, these same issues devour their day-to-day work and distract the financial stakeholders from innovation. Gaming has been, and continues to be, an exciting and financially viable industry that is adept at making a strong connection with its core audience. However, we must institute a new paradigm to attract the next generation of gamers before our casinos become less and less relevant and there’s simply no longer any demand for what our core products deliver. Are you ready for that reality?



Kevin Parker has been in the gaming industry since 1995 and participated in the opening of five Native American properties on the West Coast. Previous positions include Director of Gaming, Director of Slot Services and Director of Casino Operations in two different facilities. Parker recently co-founded Lynx Gaming Solutions.