BACK PAGE: The old ballgame
by Charles Anderer
May 1, 2009
Financial gain is a great and healthy motivator, but watch out when it starts to compromise the core product
Mired as we are in one or another stage of the
longest economic downturn in decades, minds are inevitably turning to what the
gaming world will look like when we come out on the other side. Anecdotal
conversations with a number of longtime friends at last month’s National Indian
Gaming Association convention revealed fairly broad agreement on some basic
points, both on where the casino industry went wrong and how things might be
reconfigured to fit the needs of a changed marketplace.
The conventional wisdom revolves around some
basic points: There will be more players in the game as the bigger operators
de-leverage and/or reorganize. Prices will come down, on both the gaming and
non-gaming sides of the business. The best operators will focus on the core
product, gaming, and we will see a continuation of a trend that is already in
place: re-emphasizing service and using the non-gaming side of the business to
get gamblers through the door with low room rates and cheaper F&B. Some of
this is just fine with a lot of people who have been in this business for a
long time. There is no shortage of fondness for the gaming industry “the way it
used to be,” and even if some of the memories of the past are selective, any
conversation that revolves around how the industry offers better value to its
customers is healthy right now.
On the ground, things are already happening. Low-limit blackjack
games are no longer the distinct province
of Downtown Vegas and have found a new
life in casinos across the United
States. Conversations about the $5 game
still revolve around whether they generate enough tips for dealers, but in this
climate such concerns appear tone-deaf.
In Atlantic City, which has been
buffeted by the twin terrors of the recession and the boom of Pennsylvania gaming, Resorts Casino Hotel
converted eight of its slot machines to pay out in coins, to much media
fanfare. “You think you’re playing a real slot machine here,” said one player.
“This feels like a game; the other ones, it’s just losing
money.”
Naïve as that might sound, there’s a powerful message for
operators and suppliers alike: “I love coming here, but please don’t take my
money away so quickly.” That some of the industry’s biggest names are mired in
debt hasn’t helped matters. Humans, fickle beings that they are, lost as often
during the good times as they did in the bad times, but now it’s the greedy
operators who are to blame. No matter. If the point of consolidation in the
first place was to add value for customers, we shouldn’t be surprised when
customers turn cynical as deals go pear-shaped and companies are in the news
for their ability (or lack thereof) to meet interest payments and for employee
layoffs. Players a long time ago started to suspect they were better off when
they could play one slot club’s benefits against another’s, as opposed to a
world with fewer choices. That some of the most powerful brands are now
teetering on the edge of financial ruin only confirms for them that the game
was never set up for them in the first place.
As has been noted in this space before, the
current problems stem in no small part from overly bullish assessments of
consumer financial health, particularly at the high end. What goes up always
comes down, but 15-year economic expansions that are only interrupted
by once-in-a-lifetime terrorist attacks have a way of making people ignore
basic physics.
If it’s any consolation to the casino industry, it is not alone in
building massive projects that probably never should have seen the first
shovel-full of dirt overturned. The new Yankee Stadium, for
example.
Coming in at an unheard-of price of $1.5 billion, Yankee Stadium
is a monument to the good old days of Wall Street, with corporate luxury boxes
renting from $600,000 to $850,000 per year and individual seats behind home
plate and the dugouts going for up to $2,625 per game. That’s right, Mr. and
Mrs. Net Worth are expected to spend over $10,000 to bring their two kids to prime
seats at a single Yankee game. At least that’s what the original spreadsheets
called for. Now the good old days of Wall Street, which were peaking in 2006
when project development was in high gear, are gone, and those seats have been
largely empty since the new Stadium opened.
And there are other problems, of course. The prospect of charging
all that money for prime seats led the owners to fundamentally alter the design
of the old Yankee Stadium. The lower deck has more rows and is closer to the
action, and the upper tiers have fewer rows and seats. Result: Whereas the wind
used to swirl at the old egalitarian Stadium, with its three levels of
relatively equal depth, it now has a ski slope of seats to play off of, and
balls are flying out of the park at an alarming rate. The old cathedral has
been turned into a bandbox, and many are pointing fingers at the design.
A reminder, as if we needed it, that financial gain is a great and
healthy motivator, but watch out when it starts to compromise the core product.
Charles Anderer
is executive editor of BNP Media Gaming Group and also oversees content development, sales and marketing for the company’s trade shows and conferences, which include Bingo World, Southern Gaming Summit, Gaming Technology Summit, New York Gaming Summit and Casino Marketing. He can be contacted at andererc@bnpmedia.com.
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