Gambling Equilibrium?

Hi all,

After reading another thread on why people go to visit Vegas, I went ahead and did some research to find out how many people visit Vegas a year. In doing so, I came across research that was saying how more people were visiting Vegas, yet gambling revenue was declining.

This got me to thinking...

Is there some sort of equilibrium (remember Econ in college?) whereby gambling "participation" is a function or casino hold %. In other words, are people gambling less as a result of increased hold? Thinking about it anecdotally for a second, if you keep losing, your inclination to gamble will wane. However, if you win every once in a while, you're more likely to want to keep playing. Your net loss will be greater in the long run, but you won't feel guilty about putting your money into the machine.

Curious to hear your thoughts as I feel like some casinos have gotten ruthless with the holds (particularly on slots). And that's perhaps a contributing reason as to why some properties are migrating away from gambling being the primary revenue source. Almost makes me want to select a casino based on how crappy their ancillary entertainment is. The crappier it is, the more likely they'll have a lower hold so as to keep gamblers happy and coming back.

 

too many syllables in equiwhatever?

 

Gambling revenue is declining because everything else there keeps going up in cost and there are many other things to spend money on now that weren't necessarily available years ago.
Meals used to be cheap, there weren't shopping malls in every resort casino, spas, parking fees, nite clubs, pool cabanas, etc.

 

I agree, but, man, I have no idea where the line is.

I do notice just how old the average slot player is here at home.

 

I don't think you can say this without also acknowledging the proliferation of gaming across the country. Gaming is less of an attraction than it was 15-25 years ago for millions upon millions of Americans. Look at AC dying out from the growth of gaming in PA and surrounding areas.

The reality is you gotta have more than gaming to survive on the scale of Vegas. You need the conventions, the shows, the high end restaurants, the clubs and DJs, etc.

The average slot queen in America is spending most of their gaming budget at their home casinos. 25 years ago they pretty much had to go to AC or LV to play.

 

EDM has changed Vegas to be more about Clubs and DJs than gambling

I also agree that it is becoming so expensive just to go to Vegas, not even including gambling. Resort fees continue to go up, charging for parking, room prices, food prices... it used to be low price to get there and stay, then gamble all of your money away. But now it is so pricey to just be there, that the gambling budget is less, and with a smaller gambling budget it isn't as fun to go if you have to play lower stakes...

I just booked Excal for 2 nights in September... $300!!!!! for Excal!!!!! If it wasn't for the annual event I go to every year, I would never pay that much for Excalibur...

 

I've seen at least one analysis/study of this question but I don't have the doc and I don;t remember where it was online, if you poke around you might be able to find it. The conclusion was yes, less time on machine results in less satisfying experience results in less total revenue. Obviously that's just one of many things contributing to the decline though.

 

Yeah, most of my gambling money now has to go toward parking and resort fees.

 

My understanding was the op was talking about gambling in Vegas being a smaller % of the overall revenue stream for any particular property.
This wouldn't have anything to do with casinos in other states. If that was the case spending / revenue / visitors would be down across the board.

 

It's all interrelated. Absolutely it matters.

If you could fill MLife casinos with gamblers who give you $500-$1,000 per room per night of ADT, you'd do so in a heartbeat.

A big part of the investment in clubs, conventions, etc. is to lower reliance on gaming in a world where the average person can go to Harrahs Kansas City, Tulalip, Ameristar Blackhawk, Seminole Hard Rock, etc. Otherwise you end up being Atlantic City where thousands of hotel rooms have closed.

 

I believe so. The casinos don't and that's the problem. Yes people do want to spend on other things but considering the number of tourists who end up gambling part of the time even if that wasn't the focus of their trip, the odds of an enjoyable experience is greatly decreased. The suits would rather take their money quick than let them lose slowly. The more offstrip places can create a full resort experience, the more middle age gamblers will go that way. I don't think its a given the the younger set isn't into gambling. They want stuff the strip doesn't really offer. 3/2 BJ will go a lot further than skill based slots with them.

 

I think the casinos do realize it, but it's a vicious circle. The machines taking up space still have to earn their keep. They raise the hold, people spend less time, so they have to raise the hold, etc etc.

 

I started replying before running out, but I agree with Rumor. Vegas provides an entire experience you simply do not get anywhere else, but you also don't have to go to Vegas to gamble. You can drive 5, 10, 60 minutes to do that. So when the average casino patron goes, they're not spending what they did when Vegas was the main horse in a two horse race. No doubt they're playing, but where before they would bring 4K on a trip, now they make a trip a month to the local and take 2K instead and enjoy the Resort Life.

As to casino holds, do you really fly across the country to improve your odds by 5%? No, and casinos know this. Just look at the numbers. They are certainly better in Nevada than maybe anywhere else. Then look at PA. They get hit over the head with a 55% tax on slots, so that their hold is a little higher than it is on the Strip isn't surprising. But guess what? People are still going to go. Strip Vegas, on the other hand, still keeps it somewhat attractive to gamble there because they don't want to totally lose that dollar.

No matter how much smaller that stake, if gambling goes in Vegas, it's a wrap. Right now they are testing the waters as to what players will accept, and many of them are accepting it as the cost of entertainment.