Gaming Entertainment Chapter 11

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Gaming Entertainment Chapter 11

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Presentations text content in Gaming Entertainment Chapter 11


Gaming Entertainment

Chapter 11

John R. Walker

Introduction to Hospitality, 6e


Introduction to Hospitality Management, 4e


The Casino Resort: A Hospitality BuffetTwenty of the thirty largest hotels in the world are casino resorts on the Las Vegas Strip

Today, many casino resort presidents and key executives have come up through the lodging or food and beverage side of operations


What is Gambling?Gambling is the act of placing stakes on an unknown outcome with the possibility of securing a gain if the bettor guesses correctly.

To be considered gambling, an act must have three elements: something wagered (the bet), a randomizing event (the spin of slot reels or the flip of a card), and a



What is Gambling?There are two basic categories of gambling: Social gambling and

mercantile (or commercial) gambling. Social gambling is conducted among individuals who bet against each otherIn mercantile or commercial gambling, players bet against “the house,”


What is Gambling?The house edge is what makes casinos possibleThe house edge allows casinos to offer their customers honest games, fairly dealt, and still remain in business.

The house edge is defined as a mathematical formula that allows the ‘house’ to keep a small percentage of every bet made by a player. The player may have some ‘luck’ in the short run but the house ‘advantage’ usually prevails over the long run.


What is Gambling?The handle is the total amount of money bet at a game.

The win is the handle minus the money paid out on winning bets—essentially, what the casino keeps. The

hold percentage is the percentage of the total handle that is retained as win.


What is Gambling?Just because the casino department is reporting a net loss for a shift does not necessarily mean that the department is inefficient or incompetent; it may just be an expression of

volatility. Over time, gaming wins will tend towards their historical average (house advantage).Because of volatility, even a busy casino can end up in the red for a shift or even a weekend if one high-stakes player has a run of good luck.


Comps: A Usual Part of an Unusual Business

Comps are complimentary goods and services offered to casino patrons in order to attract their business

Comps are distributed as a usual part of a casino’s operation.The value of comps varies; generally speaking, higher-producing players are given higher-value comps


Comps: A Usual Part of an Unusual Business

Casinos, with thousands of guests on any given day, rely on customer loyalty programs to track patron playCasinos use the information they gain about a player’s gambling patterns to offer him or her comps, based his or her expected levels of play. Most loyalty programs have tiered rewards structures, giving patrons an incentive to play more and unlock more rewards.


Types of Casino OperationsNevada-style gaming tavern, which is a typical bar and restaurant that has less than sixteen electronic gaming devices

Stand-alone casinos usually consist of only slot machinesIndian reservation may be bingo parlors in prefabricated buildings to fully functional casino resortsRiverboats are usually permanently moored casinos with F&B facilities, and a hotel


Components of Casino ResortsDestination resorts, such as those found in Las Vegas, are centered on casinos that have several types of games available:

SlotsTable games (21, craps, roulette, baccarat, etc.)Race and sports booksPoker rooms


Components of Casino ResortsIn most parts of the United States, slot machines produce the bulk of the revenue

Among table games, blackjack is most popular nationallyCasino resorts also include the following components:Lodging

F&BEntertainmentRetail shoppingConvention facilities



Evolution of Gambling and CasinosGambling is among the oldest of human behaviors Purpose-built dice have been discovered at sites dating back to 7,000 years ago

Casino resorts, as they are currently operated, are much younger, dating back only to 1941


Evolution of Gambling and CasinosBy 1910 gambling had been outlawed in the United StatesIn the midst of the Great Depression, in 1931, Nevada legalized gambling in order to increase tourism

The El Rancho Vegas, was the first casino resort on what would become the Las Vegas Strip


Evolution of Gambling and CasinosIn the 1970’s casinos were being purchased by corporations, integrating them into the national economy and initiating new regulatory scrutiny

In 1976, New Jersey voters legalized casino gambling in Atlantic CityRiverboat gambling debuted on the Mississippi in 1991


Evolution of Gambling and CasinosIn the 1987 Cabazon decision, the Supreme Court affirmed that if a state allowed betting on bingo or card games, Indian tribes could offer these games without limits imposed by state regulators

Today, there are more than 200 Native American tribes operating casinos in more than 30 states with revenues of more than $25 billion


Evolution of Gambling and CasinosAmerican-run casino operators have found that Asia is an even more lucrative market for casinos than the United States.

Both Macau (2004) and Singapore (2010) have become casino powerhouses Since 2008, Macau’s casino industry has become a world-wide leading gaming center with increasing revenues surpassing Las Vegas by nearly 400%


Working in a Casino ResortHotel operations

:Much like the career opportunities in the full-service hotel industry, with the exception that food and beverage can be a division of its own and not part of hotel operations

Food and beverage operations: High-quality food and beverage service in a wide variety of styles and concepts

Some of the best foodservice operations in the hospitality industry are found in gaming entertainment operations


Working in a Casino ResortCasino operations:Gaming operations

Casino serviceMarketingHuman resources

Finance and administration


Working in a Casino ResortRetail operations:

Increased emphasis on nongaming sources of revenuesGaming entertainment business demands an expertise in all phases of retail operationsFrom store design and layout to product selection, merchandising, and sales control


Working in a Casino ResortEntertainment operations:

Because of the increased competition, gaming entertainment companies are creating bigger and better production shows to turn their properties into destination attractionsProduction shows have climbed into the multi-million dollar range, with special entertainment venues built for superstars


The Mirage EffectSince the 1990s rooms have become a major revenue centerGourmet cuisine was introduced in 1992 when Wolfgang Puck opened Spago in Caesar’s Palace

The quality and cost of entertainment has skyrocketedFull-fledged malls inside casinos have seen retail spending climb


Sustainability in Gaming EntertainmentGaming entertainment companies continue adapting their operations and practices to fit “green” standards.

Many well-known companies in gaming entertainment are leading the way to establish sustainable initiativesHarrah’s Entertainment Inc. has undertaken a sustainable initiative in several areas of operation, including energy, waste and water conservation, as well as climate control


Career InformationThe growth of the gaming industry has resulted in a variety of new job openings.People choose to work in the industry because it is known to place people first, whether they are employees or customers

Most careers include impressive benefits packages and offer many career advancement opportunities


Trends in the Gaming Entertainment Industry

Gaming entertainment dependent less on casino revenue and more on room, F&B, retail, and entertainmentGaming and lodging are convergingContinued scrutiny by government

Exceptional service will drive the entire industryContinued improvement in management career opportunities


The End

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