The cost of doing business in table games is in some cases becoming unmanageable. Payroll costs, health care benefits, technology and the inherent fees that come with technology are placing an economic hardship on operations. … Some thoughts on how operators can cope.
For table games managers the cost of doing business is of utmost concern. The key to success is keeping operational costs in line with the most successful operations. Some costs are indeed out of control, and some, like payroll, are increasingly out of our hands. Some costs, though, as in the case of technology, are touted as production enhancers. Still, their costs are placing more of an economic hardship on our operations.
Where is that “point of equilibrium,” if you will? Table games managers report to me that the costs of doing business that are not labor-related are in some cases as high as 40 percent. Add this to the cost of labor and health benefits (over 40 percent easily), and it doesn’t take a rocket scientist to figure this one out: it’s difficult to make a profit in table games.
The point of equilibrium, while being hard to define, can be looked at in a number of ways. Let’s start by looking at technology and lease fees. I don’t want to sound like the anti-technology people out there in our world. Some don’t like technology, period; it scares them. I like it and use it all the time. Frankly speaking, though, most technology does not do anything to grow your table games play. For a department that is floundering in many casinos, I cannot understand how we as managers are constantly piling up operating costs with new equipment and new games.
If I were to become a casino manager again (not in this lifetime) I would ask this question about any piece of equipment or product I contract to use: Will this cost be offset by an increase in revenue? I don’t mean an increase in productivity or better game protection but an increase in player participation (read drop). If the answer is no, save the money.
I have no knock against shuffle machines. They serve a purpose when needed (high volume of play, big betting limits, etc). They will generate more hands per hour; this is fact. But if your casino has low limits and lower average bets, if your games are not going full bore most of the time, should you be adding to the unprofitability of your department by paying a monthly fee for a machine to shuffle your cards? I know what some of you are saying here: How about shuffle trackers and false shuffles? Here’s a novel idea: Let’s have the supervisor watch the shuffle, just as they are supposed to do, without the machine.
How about all those leased games and their escalating costs? Are we paying too much for most of these products which are not adding more players but simply moving existing players off certain products and onto others? I think we are. New games, to justify their spiraling costs ($1,300 and more a month for a leased poker-style game), have to bring in new players. If you are paying for these products without seeing growth in your drop, you may be wiser to save the money.
What is the solution? Go back to basics.
I am about as old school as they get when it comes to table games operations. But in table games that is where it’s at. Table games should be fun and exciting. The emphasis should be on the social side of the product, not the technical side. Why do you think people play table games? Is it because of technology? Are they there to look at and admire the shuffle machines?
So what does the “old school” manager put into place in his or her operation? Well, sometimes it’s what the manager does not put into place.
Here are some ideas:
Have the dealers shuffle the cards. Forget the machines. Will it cost you potential hands per hour? Maybe, on full tables at peak hours. But save the lease fees.
New games with big leasing costs. Forget about it. If it isn’t free don’t put it on the floor.
Side bets and other gimmicks. Again, free is great. But to pay a fee for something that will grind out your players faster and make all good games (and seemingly decent bets) outrageously high hold games for the casino, forget about this, too.
Staffing. The only staff hired for table games should be outgoing, gregarious people who know how to handle customers in a gaming venue. If they don’t have the personality don’t put them on the games. There is a place for those people. It’s called surveillance.
A final word of advice. Look at what the successful table games operators do. Chances are the successful ones are using “old school” methods.