There’s a big piece in today’s USA Today about penny slots:

The penny slot machine, once a joke among serious gamblers, is the hottest form of betting during this recession.

Even casinos that cater to wealthy gamblers are replacing $1 machines with video slots that accept bets one cent at a time. “You can play longer with less money on penny slots,” says Ed Feigenbaum, editor of Indiana Gaming Insight, a newsletter.

The penny machines accounted for 36% of bets at Indiana casinos in July, up from 8% in 2005.

USA TODAY examined gambling data in seven states and found penny slot revenue soaring everywhere. National numbers are not available.

Las Vegas was slow to pick up on the trend to penny slots, but it has jumped on board, too. In the past two years, Nevada casinos have added more than 7,000 penny slot machines and removed 12,000 machines that require bigger bets.

via Casinos earn coin from penny slots – USATODAY.com.

As far as playing longer with less money goes, I don’t think so. I’ve already broken this down, but apparently it hasn’t bubbled up into the public consciousness yet. Here goes:
In 2008, the average Nevada penny slot machine had a hold percentage of 10.22%

The top bet on penny machines usually runs between 100 and 500 credits, though it can go even higher.
For the sake of argument, let’s take a conservative 200 credits as the max bet. This is what most players will play, since it gives them the greatest chance of unlocking the bonus rounds.
200 credits means $2.00 bet per spin. The average slot players spins the reels ten times in a minute. That means $20 a minute is being played through.
At 10.22% hold percentage, this means that after a minute of play the casino will hold (on average) $2.04.
That’s $122.64 over an hour of continuous play. One hundred dollars–my arbitrary benchmark buy-in–will last about 48 minutes and 50 seconds.
——-
In 2008, the average Nevada quarter machine had a hold percentage of 6.11%
The top bet on most quarter games is 3 credits, or 75 cents per spin. The average slot players spins the reels ten times in a minute. That means $7.50 a minute is being played through.
At 6.11% hold percentage, this means that after a minute of play the casino will hold (on average) 46 cents.
That’s $27.60over an hour of continuous play. One hundred dollars–my arbitrary benchmark buy-in–will last about 3 hours, 47 minutes and 20 seconds

Clearly, it “costs” substantially more to play penny slots with max credits than it does to play quarters. And this was with a conservative 200 max bet plugged in. If you’re playing a 500 credit machine, you’ll be “paying” on average $306.60 for an hour’s play. Yes, if you’re dribbling in the credits and playing very slowly you could milk a penny machine for a few hours. But if you’re playing with any intent to get a jackpot that actually matters, you would be better off (from a bankroll perspective) playing a quarter or even dollar machine. From an entertainment perspective, you may do better with the pennies.

By not disclosing that penny slots typically have far worse hold percentages than higher denominations, this article suggests that the player is better off playing them. As I said, this may be true from an entertainment perspective, but it certainly isn’t if you’re using time on device as your yardstick for value. I would think that this was an important part of the equation.

And as far as penny slots being the new thing in Las Vegas, they aren’t. Here’s the breakdown of Nevada’s statewide slot mix for 2008:

Denom # of machines percentage of market
1 cent 35,842 20.87%
5 cent 10,973 6.39%
25 cent 21,633 12.59%
1 dollar 14,411 8.39%
M-Deno 83,245 48.48%
Other 5,589 3.25%

As you can see, multi-denomination machines are what’s big now. They’ve gone from about 11% market share in 2002 to nearly 50% in 2008. Penny slots have increased impressively, but according to the numbers there are more than twice as many multi-denoms out there. Granted, these machines can act as penny slots, but they are clearly the dominant presence.

My final critique involves the idea that penny slot revenue has increased despite the recession. Here’s the pith of that point from the USA Today article:

Revenue from every form of gambling has fallen in Nevada during the recession — except penny slots. Penny slot revenue was up 3% in the year ending June 30. The 32 other types of gambling tracked by Nevada regulators — from sports betting to roulette — plummeted 19%.

It is true that penny slot revenues have increased, but that’s because the installed base has increased. For example, in June 2009, for all Nevada casinos:
39,089 penny slots, winning $155,209,000 for the month, an increase of 0.51% over the previous June. However, from June to June Nevada added 3,797 penny slots, an increase of 10.53%.

When you add 10 percent more product but do a half-percent more sales, you are becoming less profitable per unit. Indeed, revenue per unit for the month of June 2008 was $4,365. In June 2009, it was $3,970. So revenue per penny slot actually fell by 9%.

That’s not as bad as some other games (craps, which had the same number of games, saw its revenue decline by 15 percent). But it’s hardly the out-of-the-park home run that is suggested by the rather narrow reading of the Nevada revenue numbers by the author. At best, you could say that the penny slots out-performed the gaming revenues at large, which lost 13.86%, though that number is tempered by fewer games and slots. All in all, “same position sales” indicate that penny slots did slightly better than all other forms of gambling in Nevada.

Posted in business of gambling on 08/31/2009 12:27 pm by Dave

Ryan Boudinot. Misconception. New York: Black Cat, 2009. 224 pages.

Misconception is a novel in the form of a memoir with a twist: we get the same story from two perspectives. But this isn’t just a case of he said, she said: it’s a thought-provoking exploration of both memoir and memory.

The memoir sections deal with a summer in the late-1980s, as 13 year-old Cedar and Kat explore a relationship. With the exception of what seems an inordinate obsession with masturbation, this reads like any other boy-meets-girl. But there is a twist (which I won’t give away), and what seems to be the truth isn’t necessarily so.

The novel starts out strong. Boudinot is a talented writer, and the book is well-written, with many memorable turns of phrase. Having one of the characters (Kat) write several chapters as a memoir in Cedar’s voice is a fascinating exercise. Boudinot definitely made her and Cedar’s voices distinct. But it doesn’t hold together quite well as a novel–there’s just the sense that something is missing. And the last twenty pages seemed mean-spirited for the sake of it. Like the pervasive masturbatory meme, this feels not like honesty or even verisimilitude, but an appeal to cheap shock value.

Bottom line: I’d definitely put this book on a reading list for a writing class, simply because of Boudinot’s sure style and innovative technique. Reading for pleasure, though, is another story.

Posted in book reviews on 08/28/2009 10:36 am by Dave

A columnist in the St. Augustine Record has a prescription for women who are dreading the return of football season: gambling!

You can bridge this gap with one of the greatest relationship problem solvers I know: gambling.

Thats right. A few interesting wagers can easily return your family from football fan and widow to weekend playmates.

Heres one: Each of you pick five games a week. College, pro, whatever. Five games, five winners. Doesnt even have to be the same games. Whoever picks the most winners each week is the champ.

Ive seen couples do this and make all kinds of wild bets. Some bet chores. Guys, wouldnt it be awesome to have a beer and watch your wife mow the lawn? Some bets get a little more creative. Girls, how nice does a foot rub from your man sound? Some even involve the bedroom. Use your imagination — this is a family column, people.

The great thing about football is that even the dorkiest expert cant accurately predict every game. So even if you dont know Peyton Manning from the Publix checkout dude, you really still have a shot.

So take heart, football widows, you have hope. Summer might be drawing nigh, but you dont have to be the big loser. In fact, this year you might even come out a few foot rubs and dinners ahead.

via staugustine.com: the oldest city’s home on the Net.

I like that this considers gambling in a broader cultural context. I wonder, though, if the NFL will try to penalize people wagering foot rubs and dinners on the outcome of games. After all, the league has taken a firm stance against betting on games.

The funny thing is that if you consider the foot rubs a service, then technically this is illegal in most states: you are exchanging something of value. Otherwise, you could avoid prosecution for bookmaking by switching from a cash to a barter system. It doesn’t seem practical to me, but I’m sure there’s some financial whiz who could make it work.

Posted in gambling & culture on 08/27/2009 10:54 am by Dave

Well, it looks like the Time magazine cover story from a few weeks ago has scored some collateral damage. From the LV Sun:

A Las Vegas real estate agent who landed a prominent role in a Time magazine cover story is being scrutinized by state licensing officials because of her comments, has left her employer and is lying low.

The story by Joel Stein in the Aug. 24 issue, “Less Vegas,” is a high-spirited and high-altitude view of the troubles facing Las Vegas, which he calls both “our most American city” and “an entire city of John Dillingers.”

In the story, Brooke Boemio — “a bouncy, sweet, recently remarried 31-year-old mom” — is cast as one of the Dillingers. She helps Stein break into a foreclosed home and brags about helping clients who are underwater on their mortgages buy a second house on the cheap and stop making payments on their first mortgages, pressuring the bank into selling the houses for a loss. Everybody’s doing it, she says in the story. In fact, she said, she did it herself.

Since the story appeared, Boemio and her employer have, in the words of Coldwell Banker Wardley Real Estate President Jeff Sommers, “parted ways.”

Sommers also said his company has conducted an internal investigation and has been unable to find any cases of Boemio engaging in the behavior described in the story. The buy-and-bail tactics described in the story, he said, are serious allegations and “really just in direct opposition to everything in our policies.”

In a further statement released online, Sommers said Boemio told him she had been misquoted and misrepresented by Time.

Unflattering Time magazine story puts agent in hot water

There’s an interesting comments thread on the story, which only adds dimension to it. Naturally, there’s the CYA by the company in question, as well as all sorts of allegations about what “really goes on” in the real estate game.
In this case, the “carpet-bagger” journalist has apparently left some big trouble in his wake.
As I see it, there are 2 options:
1. The agent in question isn’t too bright, and discussed unethical practices with apparent blithe glee to a reporter.
2. The reporter greatly exaggerated what the agent said, or deliberately misquoted her.
Not knowing the agent or reporter personally, I don’t know which is the likelier scenario, and if the agent’s apparent termination is a miscarriage of justice or just deserts. But it is never a bad idea to be cautious when you’re speaking to a reporter.

Today I had a call from someone who wanted me to say, based on my comments in this story, that City Center would “destroy” every other hotel in town.

I responded that this probably won’t be the case. “There’s no need to get apocalyptic,” was my exact quote. In fact, it comes down to simple economics: you’re putting more supply on the market, and unless you can create more demand, the price will fall. I don’t think there’s any way out of that equation.

There seem to be two extremes out there: either City Center will lure millions of new customers to Las Vegas and reverse the ongoing decline, or it will cannibalize the market and force massive closures. I think those are both unrealistic and unsophisticated attempts at prognostication.

The answer is instead, well in the middle: if other hotels don’t adjust their rates accordingly, or stop delivering good service, then naturally customers will drift away–if they like what they’re getting at the new place. In the best of all worlds, this kind of competition will result in lower rates for customers and better service. That’s what competition is about, and that’s what built the casino industry in Las Vegas. When Wynn opened in 2005, for example, the execs at the Bellagio didn’t throw up their hands and concede the high-end market.

All of which is an elaborate way of saying that, with all honesty, I don’t know what’s going to happen in December. No one who’s being truthful can tell you that they do. There are simply too many other variables to solve that equation: what’s the international economic picture going to look like? What’s the cost of a gallon of gas? Will business travel pick up in 2010? These are just three of the factors largely out of the control of anyone in Las Vegas, and each of them is crucial to forecasting–even in the most crude sense–what the future brings. But it makes sense to conjecture that, if other conditions remain as they are, there will be more competition for hotel guests in a few months.

Posted in life in vegas on 08/26/2009 02:39 pm by Dave

A reminder that creating a casino industry isn’t just about waving the money wand and watching the dollars pour in. From the New Journal:

Before the first hand of blackjack, the first spin of a roulette wheel or the first wager at a craps table can happen at Delaware's casinos, an estimated 800 people need to be trained to preside over the games.

They also need to learn how to watch out for cheaters and keep an eye on the millions of dollars expected to move in and out of the gambling centers each year.

The deadline to build a qualified corps of dealers, floormen, pit managers, regulators and security officers was extended after state officials ruled out a special legislative session to approve rules for casino table games.

via Table Games 101 on the way | Delawareonline.com | The News Journal.

Interesting revelation on page 2: you don’t need good math skills to be a dealer. I have a feeling that the “tricks” the director of the Casino Career Institute mentioned are just learning the payouts for blackjack by rote. I know that’s how many people do it, and it probably covers 95% of all decisions.

Also, if you make it all the way to the third page, you’ll read a personal confession from yours truly about the relative difficulty of getting into graduate school and getting a casino job.

Posted in business of gambling on 08/24/2009 11:31 am by Dave

Frank Fertitta, Jr, whose sons currently run Station Casinos, has passed away. From the LV Sun:

Frank Fertitta Jr., the patriarch of Station Casinos, died today after heart surgery in a California hospital.

Fertitta, 70, who had been ill for some time, died at Cedars-Sinai hospital in Los Angeles, sources close to the family said.

Fertitta arrived in Las Vegas from Texas with his wife, Victoria, in 1960. He started working as a bellman at the Tropicana Hotel and Casino while he was learning to be a dealer. From 1960 to 1976 he was a dealer, pit boss, baccarat manager and general manager at properties including the Stardust, Tropicana, Circus Circus, Sahara and the Fremont in downtown Las Vegas.

He believed that Las Vegas needed a casino where locals could visit and where casino workers could come after work.

The Station Casinos empire started in 1976 when Fertitta opened The Casino off the Las Vegas Strip. The name was changed to Bingo Palace and ultimately was renamed Palace Station in 1983.

via Frank Fertitta Jr., patriarch of Station Casinos, dies – Las Vegas Sun.

Fertitta, Jr. is another one of the generation of people who came to Las Vegas when the industry was still in its rough and tumble, pioneering phase, and created the casino industry that we know today.

Outside of his abilities as a casino manager, Fertitta had the same kind of vision as Benny Binion, Sam Boyd, or Jackie Gaughan in being able to size up the market and see an opening. For Binion, it was a no-frills gambling joint. Boyd and Gaughan both had their own ideas about casinos that could attract more casual players. Fertitta recognized that Las Vegas residents were a customer base themselves. There had been casinos away from the Downtown/Strip tourist corridor for years–including Boyd’s Eldorado in Henderson–but Fertitta’s evolving casino that became Palace Station was successful enough to serve as the template for the next generation of locals properties.

It’s also worth mentioning that I’m writing this a few hundred yards from a building on UNLV’s campus named for Frank and Vicki Fertitta that speaks to their contributions to the university and community.

Posted in business of gambling on 08/21/2009 02:27 pm by Dave

I heard an ad for this place on the radio driving to work today and started thinking about how odd it is that a nightclub on the Las Vegas Strip seems to be glamorizing mental illness. Live from Las Vegas, it’s Skizofrenia, the Nightclub:

Skizofrenia features “dark alternative music” every Friday at the Harmon Theater. I guess because it’s an alternative/industrial/goth night thing, the place is supposed to be “dark.” Well, schizophrenia’s a pretty serious medical condition that doesn’t sound like a fun night out to me. Here are some of the early symptoms of schizophrenia from schizophrenia.com:

–A blank, vacant facial expression. An inability to smile or express emotion through the face is so characteristic of the disease that it was given the name of affective flattening or a blunt affect.
–Staring, while in deep thought, with infrequent blinking.
–Clumsy, inexact motor skills
–Involuntary movements of the tongue or mouth (facial dyskinesias). Grimacing at the corners of the mouth with the facial muscles, or odd movements with the tongue.
–Parkinsonian type symptoms- rigidity, tremor, jerking arm movements, or involuntary movements of the limbs
–Appearing desireless- seeking nothing, wanting nothing
–Suicidal thoughts or suicidal ideation
–Rapidly changing mood- from happy to sad to angry for no apparent reason (called labile mood)
–Increased withdrawal, spending most of the days alone.
–Becoming lost in thoughts and not wanting to be disturbed with human contact
–Neglect in self-care- i.e. hygiene, clothing, or appearance
–Replaying or rehearsing conversations out loud- i.e. talking to yourself (very common sign)
–Overpowering, intense feeling that people are talking about you, looking at you
–Overpowering, intense feeling you are being watched, followed, and spied on (tracking devices, implants, hidden cameras)
–Thinking that someone is trying to poison your food
The First Signs of Schizophrenia

All the ingredients for a great night out on the town, huh? Why not just call the club “Leukemia” or “Emphysema” or some other debilitating disease? It’s nice to know that a life-threatening mental disease is considered “cool.”

It’s not like I’m coming at this as some kind of joyless Puritan or member of the PC brigade. They’ve got the right to call their club whatever they want to. But I also have the right to tell people how idiotic it is. Do they know exactly what schizophrenia is, outside of “something that is bad?” Like building a casino in the shape of a tomb, it’s one of those things that probably seems like a really neat idea to someone who doesn’t know much about the subject, but is, in fact, dumb.

I wonder if they have “Facial dyskinesias Fridays–display your involuntary muscle spasms and drink for half-price until 2!” If they’re raising awareness of mental illness that’s one thing, but assuming that it’s all about latex nurses and straitjackets doesn’t do anyone any good.

Posted in life in vegas on 08/20/2009 01:30 pm by Dave

The Las Vegas Sun has a graphical “snapshot” of gaming revenue numbers for the past five years:

Gaming win at Clark County casinos – Las Vegas Sun.

As far as revenue per game/slot goes, this is an interesting graphic because even if this number remains constant gaming revenues will still decrease, as there has been a definite shrinkage of both slot and table inventory, as you can see in this handy pdf that we put together a few months ago.

Posted in business of gambling on 08/18/2009 06:12 am by Dave

I want to write about something I said but (I don’t think) got on the air in the KVVU story last Friday. Since everything about Las Vegas has to run to extremes, it’s almost impossible to have a realistic discussion of its evolution as a city, both economically and socially. With doom-mongering the current rage, those who, only a few years ago, were anointing Las Vegas as the first postmodern metropolis are now asking if the city is doomed.

On the face of it, it’s not a bad question. The city of Las Vegas is built on tourism and gambling. When people have less money, they travel less and gamble less. With some fearing that happy days are not going to be here again for a while, is it possible that Las Vegas is fated to decline indefinitely? Will the 2010s be the 1990s in reverse, with a steady slide of visitation and revenue numbers?

Not unless the general economic outlook for the country (and the world) is so gloomy that we see an unprecedented erosion of the global economy. In that case, depressed room rates on the Strip will be the least of anyone’s problems.

But if we see a recovery, even if it is slow and gradual, Las Vegas is in far better shape than many other cities. The city is based on tourism, a service industry that can’t be outsourced. The rule of thumb in seeing if your job is outsource-proof is touch: if you have to physically touch the customer or client, you are safe. Call center reps and computer programmers don’t have to touch their clients, so those jobs can be done anywhere. But you can’t hire someone in Bangalore to pour drinks or change linens in Las Vegas. While casinos are getting less labor intensive, hiring fewer people as technology permits, they can’t outsource to the extent that other industries can.

The situation is even worse for Rust Belt cities with manufacturing bases. Unless they make the transition to something else, they really do face decline. If it’s cheaper to make cash registers in Taiwan–or Alabama–there won’t be too many jobs at cash register factories left in Dayton. This is an existential crisis: these cities came to be because they were at a nexus of raw materials, labor, capital, and transportation. When it becomes cost effective to relocate production, they have real problems.

Las Vegas won’t necessarily face this kind of decline. There’s no reason to think that, suddenly, people are going to stop traveling for business and pleasure. If Las Vegas operators can adjust to changing market conditions, they can stay in business.

Posted in business of gambling, life in vegas on 08/17/2009 03:16 pm by Dave

For those of you in Las Vegas, I’m (probably) going to be on KVVU-Fox 5 news at 5 this afternoon, commenting on a new Time magazine cover story about “Fabulous Less Vegas.”

Basically, it’s yet another example of what Hal Rothman called “carpetbagger journalists” blowing through town and trying to pass off their insights as a thorough plumbing of the American dream. I don’t have the cover in front of me, but it even mentioned journeying to the heart of the American dream–a pretty blatant homage rip-off of Hunter S. Thompson.

Then you’ve got self-proclaimed non-idiot David Rothkopf over at NPR, who typed up this drivel the other day:

Last week, I spent a couple days — after a beautiful trip of whitewater rafting in Colorado and hiking through the amazing Utah desert — in the idiot capital of America: Las Vegas, Nevada. While many decry Las Vegas as a fleshpot, a blight on civilization or just the tackiest place on the planet Earth, first and foremost it is the Capistrano of idiots, the place to which nature draws them all (or at least the ones who could not get full-time work in Washington or Hollywood). You can tell because even at the airport, they have games of chance that guarantee that whoever plays them will lose their money… and long lines of people waiting to play. And the airport is just the tip of the iceberg of an entire industry built on the notion that people can’t count or won’t, that they believe in magical outcomes (see earlier offensive religious reference) or are just too damn dumb to breathe.

The city offers shows that cater to idiot tastes (how else can one explain the long and flourishing career of Carrot Top or the fact that every other person in town seems to have a tattoo that they are certain to regret in a matter of months if not minutes?). The city even seems to think that if it doesn’t build windows into casinos that the idiots will lose track of the time and stay in them forever (much as horses will reputedly continue to eat until their stomachs explode or as right wing conservatives will continue incessantly to hammer the policies of the ’80s regardless of how outdated or discredited they have become).

In fact, it is telling that Las Vegas is so dependent on stupidity that it is one of the few cities in America where alcohol (read: stupid juice) is sold on every street corner and practically handed out free on casino floors. There is really nothing that gives you a clearer picture of what the city and much of America is about than watching a cluster of bloated conventioneers, recent excess testing the very limits of their pants’ sans-a-belt technology, weaving down the sidewalk along Las Vegas Boulevard while sucking on the twisting plastic straws in their two foot tall day-glo margherita containers.

Foreign Policy: Vegas Journal: Americans Are Stupid

This article was sent to me by my Fullerton correspondent. You’ve got to read the whole thing to believe how awful it is. Knee-jerk conservative and religion bashing, America hating, elitist horror at the hoi polloi–it’s almost like a parody of what a dyed in the wool red-stater thinks NPR is about. This isn’t like I have an axe to grind against NPR–I’ve been on several national NPR shows and am frequently on the Las Vegas NPR station, KNPR. I just don’t like smarmy, intellectually lazy, dishonest writing.

Here’s the funny thing–I’m not saying that no one’s ever allowed a mistake or two, but in an article whose crux is the stupidity of others, you might want to proof read, not just spell check, or you get a howler like this:

weaving down the sidewalk along Las Vegas Boulevard while sucking on the twisting plastic straws in their two foot tall day-glo margherita containers

I’m well acquainted with the football of beer, the plastic stein, and the over-sized daiquiri glasses, but I have never, ever seen someone walking down the Strip drinking a pizza. I have, on the other hand, seen plenty of folks drinking margaritas, which are cocktails featuring tequila.

I’m pretty pumped about Rothkopf’s discovery here, since I’m always looking for new ways to eat pizza. Hey, when I was in Singapore I had tuna pizza crepes, and they were among the best things–not the best pizza, but the best things–that I’ve ever eaten. So if I find the place on the Strip that sells this delicious, improbably liquefied blend of dough, mozzarella, garlic, tomatoes, and basil, I’m all in.

Comedy aside, this is just lousy journalism. I’m reminded of Orwell’s duckspeak, where orthodox followers of Ingsoc don’t even think about the words they’re saying, the just spontaneous form in the throat, like “as right wing conservatives will continue incessantly to hammer the policies of the ’80s regardless of how outdated or discredited they have become.” That’s certainly a close relative of “the final and utter elimination of Goldsteinism,” which Orwell highlighted as a particularly good example of duckspeak.

Finally, I think that Rothkopf lies–or at the very least embellishes–to prove a point. Here’s the fragment:

…at the airport, they have games of chance that guarantee that whoever plays them will lose their money… and long lines of people waiting to play.

While I can’t say definitely that there has never been a line to play airport slots, I will say that I have never seen a line at the slot machines at McCarran airport. In fact, most of the times that I go through there, the utilization rate at the slots is somewhere between 10 and 40 percent, depending on the time of day–not like this is the kind of thing that I notice when I’m in a gaming area or anything. Saying that there are “long lines” of people waiting to play slots sounds good, and it makes Rothkopf’s point a little better, but it’s just not true. If anyone has ever seen a line of people waiting to play slots at McCarran, go ahead and email me, because I’ve spent more time there than I can calculate and I’ve never seen it.

The whole making fun of Carrot Top (and his fans) thing is uber-lame, too. I mean, he’s Carrot Top. Maybe he’s not up there refuting The Critique of Pure Reason, but that’s not what he’s supposed to be doing. He’s an entertainer. Here’s how it works: You develop your schtick. You get an agent, who convinces a theater to give you a chance in front of an audience. If audiences hate your schtick, and stop coming, you don’t work much longer. If they like it, and keep coming, you get to play another day. Obviously, Mr. Top is in the latter category.

If Top’s show isn’t tinged with deep literary significance and philosophical meaning, does that mean that he–or those who come to his shows–are stupid? Absolutely not. He’s a high-energy prop comic: his job is to make people laugh, and apparently he does it better than many other people. Not everything in life has to be an intellectual exercise, tinged with irony and wit. Sex, for example, is pretty much brainless, but enjoying sex doesn’t mean that you’re stupid–it just means that you are secure enough about your intellect not to constantly remind yourself–and others–of how smart you are. Of course, Rothkopf might counter that he understands having good, non-intellectual fun–after all, this is a rugged man who white water rafts and hikes–but Carrot Top is just stupid. Why? Because he doesn’t like him, or Las Vegas. When teenagers say that everything they don’t like is stupid and everyone who doesn’t dote on them is a phony, we justifiably smirk at their precocious pretension. When “experts” do it, apparently, we call it journalism.

Wow, that got much more indignant and rambly than I originally intended, but pseudo-intellectuals lying about the city where I live will do that.

I googled Mr. Rothkopf, thinking that I’d find a 20-something recent j-school grad. Turns out he’s in his 50s, a former Deputy Undersecretary of Commerce, and a well-established Washington insider. It’s scary–really, really scary–that someone with that level of experience and influence is so contemptuous of his own country and has such a disregard for the facts.

Posted in life in vegas, what's new on 08/14/2009 02:16 pm by Dave

Katherine Russell Rich. Dreaming in Hindi: Coming Awake in Another Language. Boston: Houghton Mifflin Harcourt, 2009. 384 pages.

In 2001, editor and author Katherine Russell Rich decided to spend a year in India learning Hindi as a way of better understanding both India and herself. The literary result is Dreaming in Hindi, a memoir of language, culture, location, and dislocation.

Rich enrolls in an immersion program in Udaipur, a small town in Rajasthan, and gets much more than she bargained for. In the aftermath of 9/11, Rich, a New Yorker, sees the terrorist attacks through an Indian lens, facing a major irony: she left New York, but now the city is all people talk about. Her host family is polite, but not entirely accommodating, and the language study school is less than top-notch.

The book’s chief focus is on how language can change perception and even, possibly, the brain itself. Rich weaves the latest in neuro-linguistics into her memoir of India, allowing the reader to learn the science behind second language acquisition as she wades into Hindi. This is where Rich is strongest–she is able to condense complex arguments and findings into an easily understandable summary.

The trials and travails of living in Udaipur are no less interesting but seem, ironically, less immediate. Perhaps out of sensitivity to her fellow students and friends in Udaipur, it feels like the people we meet are not fully fleshed out. I had the feeling of having wandered into a conversation already underway, having missed an important bit of characterization. I simply had trouble understanding the motivations of those around Rich, of appreciating them as autonomous human beings. This might also be a result of the mental fog that surrounded Rich’s Hindi learning; she describes how, in picking up Hindi, she lost bits and pieces of English. Her dislocation and confusion certainly come through, and much of what happens to her seems slightly flat, as if translated one time too many.

On the whole, though, this is a good, interesting book, particularly for readers who are interested in travel or language.

Posted in book reviews on 08/14/2009 01:04 pm by Dave

I’m currently hip-deep in a study of slot hold percentages for Nevada and on the Las Vegas and Boulder Strips for the period 1992-2009. Originally, it started with a question: how have casinos reacted to the recession? Have they raised or lowered their slot holds?

There’s some anecdotal evidence that casinos have tightened their slots–if you consider people complaining that slots are tighter anecdotal evidence. Were the players complaining about tighter slots right? Well, the answer (since late 2007, at least) is…yes and no. I decided to take a look at how each financial quarter since 2007 broke down for the state, the Las Vegas Strip, and the Boulder Strip. This way, I figured I’d have a good gauge of how casinos catering to tourist (LV Strip) and local (Boulder Strip) crowds responded. Here’s a chart that sums up what I found:

From the 4th quarter of 2007, slot hold statewide has bounced around slightly, with a tiny net decline, going from 6.08% to 6.02%. The Strip saw a bigger raise in hold percentage, from 6.73% to 7.01%. The Boulder Strip saw a net decline, from 5.35% to 4.96%.

Bear in mind that much of this isn’t just casino managers pulling a giant lever and making all the machines pay back more or less. The slot mix itself has changed, with higher-hold pennies becoming more popular. That complicates things, but doesn’t change the overall effect, which is that slots are paying back slightly better for locals than they were 18 months ago, and slightly worse for tourists.

What does this all mean? Well, we can theorize that locals casinos have responded to the recession by loosening the machines slightly, although nowhere near mid-1990s levels. Strip casinos don’t seem to have changed much–the hold has been fluctuating around 7 percent since 2007.

In June. slot revenue on the Strip declined 16.08 percent from the previous year. In the Boulder Strip reporting area, slot revenue declined by 17.86 percent, despite adding about 2,500 new machines with the opening of M (the Las Vegas Strip, by contrast, lost 755 machines). This is not exactly a ringing proof of the “lower slot hold–watch the customers come back in droves” theory. Of course, one might argue that the slots simply haven’t been loosened enough, or that the slight loosening of the slots prevented an even bigger decline. But then we’re getting into counter-factual arguments that are impossible to refute.

I cannot put into words the satisfaction that comes with devoting a great deal of time to an important question and arriving at an answer that basically boils down to: “Answer unclear–concentrate and try again.”

You can see the chart–with quarterly slot hold data–on a handy pdf right here.

I’m thinking of making this the first in a series of 1-page responses to statistical queries that I’ll post here and at http://gaming.unlv.edu. I’m not looking to supplant the Las Vegas Advisor’s Question of the Day or anything, but since I get a lot of questions about this sort of thing, I figured that this might be a more efficient way of answering them.

So…any statistical questions that I can answer with a little numbers-checking and eighth-grade math?

Posted in business of gambling on 08/13/2009 01:45 pm by Dave

The June numbers are in, and it’s woefully obvious that there’s no recovery in sight for Nevada’s gaming industry. From the LVRJ:

Nevadas monthly gaming revenues have sunk to levels not seen since 2004.

And analysts said theres no telling how low the bar will fall.

“Were still hearing from the casino operators that weekends are doing well, but filling rooms during the middle of the week is an issue,” Frank Streshley, chief of the Gaming Control Boards tax and license division, said Tuesday after the agency released gaming revenues for June. “People are coming, but they are just not spending.”

Nevada casinos collected $818.2 million from customers during June, a 13.8 percent decline from $949.3 million collected the same month a year ago.

The total was the lowest monthly figure since July 2004, when casinos won $813 million from gamblers. June was the 18th straight monthly decline as the gaming industry continued to be hampered by the sagging economy.

On the Strip, gaming revenues fell 14.8 percent in June to $414.5 million, compared with $486.4 million last year.

For the first six months of the year, gaming revenues are down statewide almost 13.5 percent, while the money won from gamblers on the Strip is off 14.7 percent.

June marked the end of fiscal year 2008-09 and gaming revenues for the 12 months were almost $10.8 billion statewide, a 13.7 percent decline from $12.5 billion in 2007-08. On the Strip for the fiscal year, gaming revenues declined 15.3 percent to $5.65 billion, compared with $6.67 billion in the previous fiscal year.

via NEVADA ECONOMY: Gaming revenue at 2004 level – Business – ReviewJournal.com.

A year and a half into “the decline,” and it doesn’t seem to be letting up. There were a few signs of life: despite a dismal month at the tables, both baccarat and roulette posted modest gains. This wasn’t enough to offset the tremendous decline in blackjack, craps, and everything else, but it shows that everything isn’t doom and gloom. It’s difficult to extrapolate from those two games, since they have little in common, besides the fact that they are both played in casinos and have little strategy about them. Roulette is generally a casual gambler’s game and baccarat is favored by high rollers and serious gamblers. If this was a renaissance in “real” gamblers, you’d expect to see craps and blackjack do better, instead of declining by about 15 and 20 percent, respectively.

Those are the statewide numbers. On the Strip, table revenues didn’t fall quite as much as slot revenues, assisted by an impressive 12.7% gain in roulette win. A particularly lucky high roller who favors the red and the black? An upsurge in demand for the game? Again, without more information it’s hard to say for sure, but I’d guess that it’s the former.

The nearly 50% decline in nickel win looks catastrophic. Supply has been reduced, but only about about 1/3, from 3,581 to 2,571, so it’s clear that nickel slots aren’t as popular as they once were. But players didn’t flock back to lower-hold quarter and dollar slots–instead, they moved mostly onto penny machines, which actually pay back less to the customer. Maybe the slots players who are looking for value are staying away, while those who are just into quick thrills are coming out.

Year to year, the shrinking of the Strip gaming floor continued, albeit not entirely. The Strip added a total of 18 table games and 3 poker tables from June ‘08 to June ‘09, and lost 755 slot machines. That’s with the addition of Encore, so it’s likely that “same store sales” would show a deeper decline.

Down in the Boulder Strip area, the volatility at M seems to have cooled off. For the whole reporting area, table games showed about a 10% decline, though roulette had a 14% increase. The house may have lost last month, but it won this time around.

Posted in business of gambling on 08/12/2009 12:26 pm by Dave

Casinos in Atlantic City continue to post revenue declines, as the July number prove. From the AC Press:

Casino revenue sank to its lowest level in 12 years in July, another ominous sign that there will be no summer turnaround for the troubled gaming industry.

In what is ordinarily the biggest money-making month on the casino calendar, revenue generated by slot machines and table games fell 12.7 percent compared with July 2008, according to figures released Monday by the New Jersey Casino Control Commission.

Altogether, the 11 casinos took in $383 million in winnings, the worst July since 1997. An even more dramatic comparison is this July versus July 2005, when casinos posted an all-time record of $504.8 million in revenue. The 2005 figure is 24 percent higher than this July.

Only Trump Taj Mahal Casino Resort saved the industry from the ignominy of having every gaming hall in town suffer a decline. Boosted by a 45 percent jump in table game revenue, the Taj Mahal was up 8.7 percent overall for July.

Atlantic City has stumbled through 11 straight months of declining revenue and is heading for its third straight down year – a stunning slide considering that the first 28 years of casino gambling were consecutively higher.

Atlantic City casino revenue takes 12-year tumble, July figures show

Not good at all, and I don’t see any signs of this getting better any time soon. The institutional response seems to be “Batten down the hatches, ride out the storm.” That would be a great approach if things weren’t changing, but it’s obvious that the gaming landscape of the Northeast has changed considerably in the past two years, and will consider to do so. Further down in the article, there’s a statement that the hotel rooms are full, but day-trippers are staying away. Given that slot parlors have opened across Pennsylvania, one of the city’s primary day-tripper markets, that should be surprising. So maybe it’s time to build more hotel rooms?

Things just look bad. It doesn’t help that the UAW has put up billboards reading “EVERYONE LOSES” in giant type, with smaller type saying “At Bally’s and Caesars,” with a tiny, nearly invisible header that says “When workers are treated unfairly.” Seriously, I didn’t see that header until maybe the tenth time I saw one of those billboards. And they’re everywhere, from US 95 just north of the Philly airport to up and down the Expressway. If that’s not enough, they even had it on a banner plane, flying over the ocean for all of the beach-goers to enjoy. I’m not exaggerating at all when I say that, from a distance and at high speeds, you can only catch “EVERYONE LOSES” before you’ve driven past.

I’m not saying dealer unionization is good or bad–that’s for dealers and only dealers to decide. This just seems like the UAW is just poisoning the waters down in Atlantic City. I can’t think of too many things that are more demoralizing to potential visitors than a big sign saying EVERYONE LOSES. I guess this is the approach that’s brought prosperity and success to the American auto industry, so it should work wonders for Atlantic City casinos.

About the only bright spot for the city is the opening of Revel, which should bring in multi-day visitors who aren’t going to settle for a few hours at a Pennsylvania slot parlor instead. If it’s successful, it’s possible that other operators will finally embrace the “resort model” and join Borgata and Harrah’s. The key, I think, will be doing this in a way that’s not too upscale for the market. There are plenty of people who want to have a few days vacation and don’t mind gambling a bit, but don’t want to pay $200/night for a room or $100 for dinner. Atlantic City could position itself as a mid- to high-market destination resort, with some amenities for high rollers but the bulk of its room and f&b inventory geared at a slightly less affluent demographic. For the foreseeable future, it looks like everyone’s going to be slightly less affluent, anyway.

Posted in atlantic city, business of gambling on 08/11/2009 05:45 am by Dave

The Las Vegas UFL team finally has a name that draws on the city’ history. Check out the press release:

At a press conference today, United Football League Commissioner Michael Huyghue announced the Las Vegas franchise will be named the Locomotives and unveiled innovative team uniforms showcasing the Locomotives’ “Premiere” season colors of silver, blue and white. The name “Locomotives” was selected after reviewing more than thirty thousand fan entries and receiving interpretation from industry experts and an in-house creative team on what attributes the fans were seeking with their submissions. Las Vegas Locomotives Head Coach Jim Fassel was also in attendance at the press event.

“It was critical for us to select team names that we felt best reflected the local community while simultaneously defining the personality of the team,” said Commissioner Huyghue. “Las Vegas was originally established in 1905 with the opening of the Salt Lake, San Pedro and Los Angeles Railroads. We wanted to honor the vast history of the city and the intrinsic benefits that this innovation provided to the community.”

Previously, the UFL announced Miami-based GameWear Team Sports as the League’s official uniform supplier. GameWear Team Sports is one of the leading athletic uniform outfitters in the country and has worked extensively in growing the sport of football on the grassroots level. Award-winning designer Ron Caruso of Purepartner created all the teams’ uniforms using derivatives of the official League logo for all the designs while making each one distinctive.

“The inspiration for the ‘Premiere’ season uniform design comes directly from the UFL shield and its foundation colors which represent ‘green grass’, ‘blue sky’ and silver for innovation,” said Caruso. “Throughout the uniforms, we used the dimensional ‘arc’ of the shield on the chest and supporting ‘arcs’ on the sleeves and pants. The unique font of the numbers reinforces the shield’s classic bold typeface with angles and dimensional treatments conveying depth and motion. The four uniform designs work together in a unified branded system, providing manufacturing efficiencies while allowing each team to retain its own unique and differentiated character.”

United Football League Introduces Las Vegas Locomotives as Team Name & Unveils Uniforms

Hmmm. It does reflect the history of Las Vegas, but would have been more appropriate in an age when the city really was a railroad town–let’s say before the UPRR moved the repair shops out of town in 1922. Most people probably don’t say “trains” when you ask them to say the first thing that comes to mind when you say “Las Vegas.” Considering we don’t even have passenger train service here anymore, I’m not sure this was such a good idea in 2009.

The nickname, “Locos,” is a little too close to “Lobos” for me. I’m seeing University of New Mexico basketball, not pro football. “Locomotives” sounds much more like a college team nickname than a professional team’s one. It really would be perfect for an engineering school, even if they don’t graduate the engineers who run trains.

And good God, does that description of the “premiere” season uniforms sound pretentious or what? It’s like they’re talking about a Cirque show or something. It’s a sport that involves men hitting each other, very hard, while people drink beer and bet on the outcome. I’ve never watched a football game–nor have I known anyone else to watch a football game–and comment on the “dimensional arc” of the uniforms.

Here’s a few names I came up with that aren’t already used by any other pro sports team that I know of and, I think, work better:

Las Vegas Land Sharks (or Loan Sharks–there could be some synergy with the Mob Museum)
Las Vegas Pit Bosses
Las Vegas Godfathers (hey, if we’re going to do the Mob thing, we might as well go all in)
Las Vegas Dons (it plays on the Spanish heritage and is a more subtle way of saying “Godfathers”
Las Vegas Vagabonds
Las Vegas Bandits (the players would have two arms, but they could have a slot machine in the logo)
Las Vegas Hangovers (Most football team names represent something brutal and intimidating, and a hangover is both. Many people leave Vegas with hangovers, as well.)

I welcome further suggestions in the comments. I say, we should remember who we are and how we are perceived in 2009. Let’s have some fun with this.

Posted in life in vegas on 08/10/2009 11:25 am by Dave

Howard J. Morris and Jenny Lee. Women Are Crazy, Men Are Stupid: The Simple Truth to a Complicated Relationship. New York: Simon Spotlight Entertainment, 2009. 240 pages.

Relationship books are always popular, and since a flood of books by purported experts hasn’t stopped couples from breaking up, why not a book by a boyfriend/girlfriend pair of comedy writers? This book’s basic premise is its title: women are crazy, but men are stupid. Put less bluntly, women can act irrationally, while men are often incapable of seeing more than the latest sports highlights.

It’s not a novel, or nuanced, view, but Morris and Lee put a new spin on it with their he said/she said style–each chapter by Morris is followed by a rebuttal from Lee. Both writers have some genuinely funny material that you could easily see turning up on a sit-com, as well as some insightful thoughts, like Lee’s epiphany, which came while watching a New England Patriots football game on Morris’s high-end television, that romance is “those moments in life that are in HD.” That’s certainly a language that Morris, and any other empathy-challenged, TV-loving male should be able to understand.

In the book, Morris and Lee tackle many of the major issues in relationships, including the difficulty of maintaining romance and the crippling effect of “grating expectations.” One of the most interesting chapters revolves around Morris’s brave decision to sit though the extended-version DVD of the Sex in the City movie with Lee, in an effort to prove his commitment and willingness to learn.

The tension and interplay between Morris and Lee is the best part of the book, particularly when they both share their perspective on the same incident. In a book like this, the characterizations are pretty broad: any author who reduces an entire gender to a single, over-riding quality (and a negative one at that) isn’t writing a psychology dissertation. Humor is inherently idiosyncratic, so not everyone may find this to their liking. The low point for me might have been Lee’s 12-page monologue about buying a pair of boots. This just didn’t work for me, although your mileage may vary.

On the whole, however, Morris and Lee come across as a likable couple. The reader wants them to be happy, and as we follow them through the conception and writing of the book, we really hope they work out the kinks in their relationship and find a happy medium. For couple who want a humorous way to start a serious discussion about how to make their relationship work better, this is a fun, provocative read.

Posted in book reviews on 08/07/2009 07:35 am by Dave

Earlier this week over at gaming.unlv.edu we rolled out our latest project: the 2009 Las Vegas Casino/Hotel Impact Survey. It’s a new start for the center but also a return to the past. Let me explain…

In 1980, accounting firm Laventhal and Horwath conducted a “Recession Impact Study” that polled executives at Las Vegas casinos about the nature of the ongoing economic decline. I happened across this study while I was doing research for the paper about how Las Vegas reacted to the early 1980s recession that I gave at the 14th International Conference on Gambling and Risk-Taking. I found it very useful, and wondered, “Hmmm. Someday historians might be curious about how Las Vegas casinos reacted to the 2008-? recession.”

That was the genesis of the idea. Borrowing a few questions from the 1980 survey, I quickly had a list of 20 questions that, with some help from people in the industry and at UNLV, I later boiled down to ten.

The 1980 survey’s methodology is a bit mysterious–the study only says that a large sample of casino executives were polled. I decided to be a bit more methodical in my approach, so I developed a distribution system that, given the limitations of resources, seemed feasible to me: I decided to find a contact person in each of the 70 or so Las Vegas hotel casinos and convince this contact to forward an email with information about the survey (including how to access it) to 5-10 fellow executives. That should theoretically generate about 500 respondents, which is a big enough pool to get a sense for how the industry feels.

I decided to define “executive” as anyone working at a Las Vegas casino/hotel at the director level or above. I also decided to confine this study to Las Vegas because the logistics of getting in touch with 70 people seem much less daunting than getting in touch with 500, which I’d have to do if I expected to have any kind of national sample. Also, as a resort destination Las Vegas is facing issues in the recession that are markedly different from those facing regional markets.

So far, I’ve gotten in touch with a few contacts and gotten several responses. I’m cautiously optimistic about the prospects of getting support from the various properties across town, though this isn’t an easy job. Everyone is busy, of course, and many don’t see the value in taking the time to answer a few questions with no immediate payoff.

There is, however, a payoff. Right now, I think that many executives are flying blind–they don’t have much of a feel for what lies ahead, and their only impression of what others are doing is based on rumor and hearsay. What we’re doing at UNLV is conducting a systematic study of what executives think is exacerbating the recession’s impact, and what can ameliorate it.

The simple answer is, “It’s the economy, stupid.” Obviously, the overall downturn has lowered visitation and gambling spend. When the national economy picks up, the gaming/tourist economy will as well. Maybe. Or maybe not. What impressed me about the industry’s reaction to the early 1980s recession was that there was an understanding that something wasn’t working, and a well-conceived plan to change course. Because of new competition, a weakened global economy, and rising energy prices, the high roller market diminished. Casinos responded by pursuing the middle-market gambler and families. This worked–Las Vegas was in the doldrums from 1979 to 1982, but with new attractions and new strategies rebounded in the later part of the decade, far more so than if casino operators had simply dug in and waited for the storm to pass. You didn’t see a return to 1977. You saw an expansion of the market.

The survey is an attempt to learn how executives are planning to weather this recession, and come out improved. Will they ditch amenities and focus on no-frills gambling, or add amenities and again court the non-gambling luxury market? Will they focus on improving the quality of food and beverage, or increasing the perception of value?

My sales pitch to the executives who I’m asking to take the survey is: you’ve got some difficult choices ahead of you. Every department is going to be arguing for scarce resources in the coming months. If we can get a large group of executives to answer the survey, you’ll have something to take in front of your executive committee when you’ve got to make those decisions. For example, you want money to open a new restaurant. If the survey shows that most executives think they should spruce up their f&b options, that’s some good support. Or maybe you’ll be able to see something that no one else does, and find a niche that’s going to be underserved.

Ultimately, it comes down to the idea that knowledge is power. With the city’s casino industry facing its deepest and possibly longest economic downturn yet, it only makes sense that those who will make the decisions that will shape the industry for years to come would want access to as much information as possible.

And, from my perspective, historians will be able to write a much truer interpretation of what’s happened, when the dust has settled.

If the survey is a success, I hope to run a few of these a year, on various issues facing operators.

If you are a director-and-above executive at a Las Vegas casino and want to participate, or if you want to volunteer as a contact person (or can recommend one), please email me.

To visit the survey page, go here, but you’ll need to contact me and get a password before you can take the survey.

Posted in what's new on 08/06/2009 01:27 pm by Dave

Not much time to write because of a big project I’m working on, but I’ve posted the latest UNLV Gaming Podcast: it’s an interview done at the Casino Marketing Conference with Nichole Barker and Hetty Fore, who share their expertise about casinos using the “new media” to talk to patrons and potential customers.

You can subscribe in iTunes here, visit the podcast page, or just listen to the mp3 here.

I’ve had reports of troubles with iTunes that I’ve hopefully ironed out, so if you subscribe to the UNLV Gaming Podcast and there aren’t 13 episodes available, please let me know.

Also, this episode marks the debut of opening and closing music and narration. It’s still a work in progress, so I’m open to any and all thoughts on the content and audio quality. Ditto for the interview itself. They were breaking down the room as we started it, so there is some background noise for the first five minutes or so, but it quiets down after that.

And if you’re curious about what I’m working on that’s got me too busy to share my thoughts on Episode V: The Donald Strikes Back, it involves the big project references above and cold-calling several casinos where I don’t have a contact to get some distribution. Since cold-calling is about my least favorite thing to do, I give it another hour or so before I retreat back to analyzing sold hold numbers.

By the way, I don’t recall reading this anywhere, but as far as the Trump stuff goes, there is a connection between Beal Bank and gambling. Andy Beal, the guy who owns Beal Bank Nevada, is a big poker player whose exploits in a famous series of games against some of Vegas’ best players were chronicled in Michael Craig’s The Professor, the Banker, and the Suicide King.

Posted in what's new on 08/05/2009 01:50 pm by Dave

The gaming industry lost another pioneer this week, Jeanne Hood, who led downtown Las Vegas’ Four Queens for many years. From the LVRJ:

Hood took over as president and chief executive officer of the Four Queens upon the death of her husband, David Hood, in 1977. In 1985, she became president and chief executive officer at Elsinore, a publicly traded gaming subsidiary of the Hyatt hotel chain that owned the Four Queens.

She remained president of the Four Queens until 1993.

The unassuming Hood rarely gave interviews and tried to downplay her role as a woman in the casino industry.

Hood told the Review-Journal in 1985, when she and Claudine Williams were the only women running Las Vegas resorts, that she was not a “womans libber” and steered away from questions that went that direction.

“I just feel that people have to be qualified,” she told the newspaper. “I don’t care whether they’re a woman or a man, or what color or race they belong to. I think they need to know what they are doing in order to have the job. Because I’m qualified, I’m here.”

While she didn’t talk about her place in casino history often, her influence is undeniable.

“She is part of too small a group that proved a woman could do a job that is most associated with men,” said Michael Green, a history professor at College of Southern Nevada.

Hoods death comes less than three months after the death of Williams. The first woman to run a Strip property at the Holiday Inn-Holiday Casino, Williams died May 13 at the age of 88.

“It is ironic Claudine Williams died not too long ago,” Green said. “Here are really two women who set a standard in their industry.”

While at the Four Queens and afterward, Hood was active in efforts to redevelop downtown Las Vegas with other big-name casino executives.

via Gaming pioneer Jeanne Hood dies – News – ReviewJournal.com.

Dr. Green really said it all right there.

Hood was born on May 21, 1926 in St. Paul, Minnesota. The University of Nevada Oral History Program published a 340-page oral history of Jeanne titled Whatever Will Help! A Woman’s Rise to the Top in the Gaming Industry. I’ve been reading it and it’s very interesting During the course of the interviews, Hood relates much of the history of Hyatt hotels, the Four Queens, the Hyatt Lake Tahoe/Kings Castle, and the Atlantis in Atlantic City.

You can order a copy of Hood’s oral history here, if you wish.

Posted in business of gambling on 08/04/2009 12:05 pm by Dave

A story in the Las Vegas Sun on Friday gives me a jumping-off point for a somewhat-extended discussion of slot hold:

Longtime gamblers have been saying it for months: If you want people to play in your casino during the recession, reduce the hold on your slot machines.

A panel of marketing experts validated that strategy at last week’s Casino Marketing Conference and Player Development Summit, sponsored by Raving Consulting Co. at Paris Las Vegas.

About 200 casino marketing executives, mostly from tribal casinos and commercial properties outside Nevada, attended the event. Organizers called it “the recession edition” of the annual show, and many of the panels and presentations dealt with how to draw crowds in tough economic times.

In a session on what a casino’s best players are saying and doing during the recession, panelists concurred that many of them are staying home. But panelists said one strategy to get people in the door is to drop their traditional hold percentages to keep gamblers playing.

“Casinos have become far more interested in getting the money as quickly as possible to satisfy Wall Street,” said panelist Michael Meczka, president of Los Angeles-based MM/R/C Inc., and a 30-year member of the American Marketing Association and the Marketing Research Association. “Casinos no longer care about providing a great time, every time.”

via Marketers: Reduce slot hold to attract more customers – Las Vegas Sun.

It’s an easy point to make, and one that’s hard to argue against. All the same, let’s take a closer look at the actual numbers here.

I’m in the middle of a study on slot hold percentages and slot mix, 1992-2008, and it’s quite an education. I’m comparing statewide, Strip, and Boulder Strip stats to get a sense of how the numbers for high-margin tourist-oriented casinos and lower-margin locals-oriented ones have changed, and there are some definite patterns. For now, I’ll stick to the statewide averages.

Back in 1996 the state of Nevada recorded its lower average slot hold from 1992 to the present: 4.91%. The average “cost” of $100 in play was a little less than five dollars. That’s an average for all denominations, so while it has value as a comparative tool, it doesn’t do the real situation justice. So let’s try to put ourselves in the shoes of the average Nevada slot player, circa 1996.

Considering quarter machines were the most common slot then, consider this: the average person playing three quarters on a Double Diamonds machine (this was one of the most popular games abck then, IIRC), would be betting 75 cents a spin. They’re probably averaging ten spins a minute, which means that, each minute they play, they are betting $7.50. An hour of plays means $450 cycled through the machine. In that year, the average quarter machine had a hold of 5.18%. An hour of slot play, then, would cost the player $23.31.

A hundred dollars could give them about 3.5 to 4 hours of time on device, on average. Factoring in a less-than-robotic ten spins/minute pace and time out for bathroom breaks or waiting for slot attendants to fill empty hoppers or handpay a big jackpot, you get an even longer time on device.

Fast forward to 2008. The average hold for all Nevada casino slots is 6.16%. Big deal, you might think. That’s only a 1.25% increase. That’s the total arithmetic increase, true, but proportionally, it’s a 25% increase. With the growing prevalence of lower-denom, higher-hold, higher-bet games, the change is quite apparent. There are more penny machines (35,842) than any other denom, besides multi-denom games, which can be anything from a penny to dollar, or more, so we’ll use pennies for our new typical slot experience.

There’s no standard on a max bet for a penny machine, since they can have dozens of paylines with dozens of credits bet on each. For the purposes of a quick demonstration, we’ll take a machine with an average max bet of 200 credits.

Each spin, then, costs $2.00. That’s $20.00 a minute cycling through the machine, and $1,200 an hour. The average statewide hold for pennies was 10.22% in 2008, so the average “cost” per hour of penny slot play is $122.64.

The same hundred dollars that could buy a player, on average, about four hours of entertainment in 1996 would get them barely 45 minutes of time on device in 2008. Factoring in less down time because of ticket-in ticket out technologies (no hopper fills), and quicker play because of push-buttons probably would give the player even less time with that $100 bill.

That’s a major change, to say the least. Of course, the players are choosing to play machines with higher hold. This seems counter-intuitive, but there’s no other explanation. In 2003, there were so few penny machines in the state that the Nevada Gaming Revenue Report just lumped them into the “other” category. Five years later, one in five slots in Nevada casinos was a penny slot. Casinos wouldn’t replace 20% of their slot inventory with pennies unless people were playing them.

Why are they so popular, if they pay back worse than old-fashioned quarter machines? Probably because they are more fun–a game like WMS’s Star Trek line that offers numerous bonus rounds, video clips, and “sensory immersion” just blows Double Diamonds out of the water, particularly for novice or occasional gamblers.

The solution won’t be to throw out all the multi-line video reels and go back to mechanical steppers, but to offer games that combine the excitement of the new slots with superior time on device.

I’m not trying to tell anyone how to spend their gambling dollars or run their business. I’m just saying that, looking at the numbers and drawing a few very reasonable inferences, it is clear that players, on average, get much less time for their slot dollar today.

Posted in business of gambling on 08/03/2009 11:17 am by Dave