ATTORNEY AT LARGE: Meaning what you say
When it comes to winning the battle for the hearts and minds of politicians and the public, the gaming industry should recognize that words and numbers count. Sometimes, they count for a great deal.
Is there a technical difference between a slot machine and a video lottery terminal? Of course, there is. But those who oppose the expansion of VLTs will often refer to them as “slot machines,” under the theory that there is less public support for a slot than there is for a VLT. Words clearly count, according to such theories.
Numbers also count (literalists will say, “of course they do; that is why they are called numbers.”) But we are not talking about “counting” in the accounting sense. No, this discussion is purely political-and politics drives public perception, which drives the economics of gaming.
I would like to address three distinct areas in which the numbers, as publicly reported, simply do not add up.
One is that “drop” or “handle” refer to the actual number of dollars brought in to a casino by customers, who leave with most of that money in their pockets. That is not correct. A slot’s handle refers to the amount wagered, and such dollars are continually recycled as they flow through a casino. The same dollar can be counted multiple times as players cash out, get a ticket, and then place that ticket in another slot. To put it correctly, gaming is often referred to correctly as a $60 billion industry in the United States, which is a rough estimation of its overall revenue. It is not a $600 billion or $700 billion industry.
That brings me to the second point that needs clarification. You can compare markets to markets, but you cannot compare markets to states. This has happened recently when the media reported that Pennsylvania was about to pass Atlantic City in total gaming revenue. That is the equivalent of saying the National League Eastern Division is about to pass the New York Yankees in wins. Pennsylvania is comprised of multiple markets, arguably four or five distinct markets. Pittsburgh and Bethlehem are not parts of the same gaming market.
Atlantic City-all 48 blocks of it-is one gaming market, and such comparisons do nothing to enlighten anyone, either voters, players or politicians. It is essentially meaningless.
Consider also how California is viewed. It is a $7 billion gaming market, thanks to its Indian casinos, but few lists of the world’s most successful gaming markets include California, largely because everyone knows it is so large and diverse.
Another area where numbers are misconstrued is when comparisons are made between the number of casinos in markets, when they are really referring to the number of licenses. Singapore, for example, has two licensees, but multiple brands at different price points. When the Claridge in Atlantic City became part of Bally’s, it did not close up. It just wrapped two licenses into one.
How do such misconceptions proliferate? One can blame the media, which perpetuates them, but I think that such criticisms are misplaced. The general media often do not understand-nor can you reasonably expect them to understand-the differences we are talking about here.
Most reporters are eager and willing to be educated, but they need to be taught. If you want to change minds, you must address the media. In a world where words and numbers count, reporters still count for a great deal.