Table game operators ponder the expensive costs of high-end play
October 3, 2012
No Comments
The
volatile and globally ultra-competitive high-end table game player market is an
essential part of the Las Vegas Strip, but the segment is not for everyone.
That was among the key points made at a table games marketing and operations session Tuesday at G2E. “High end is very expensive,” said London Swinney, vice president, casino operations, MGM Grand. “We now compete with Macau and Singapore; the customers are more demanding in terms of discounts, promo chips and comps; a more expensive customer than you would have at a regional property. We’ve seen our margins in table games decline as a result.”
Las Vegas started incentivizing high-end international table game players about 15 years ago, said Debra Nutton, senior vice president, casino operations, Bellagio. “It can be very difficult to collect on a debt; it really comes down to the relationship between the host and the customer. You have to believe your host when he says a player with $3 million in credit is going to pay.” Nutton said a high-end player with $1.5 million in cash might be offered $1.5 million in credit. If he paid the $1.5 million in so many days, he’d get 3 percent quick-pay break. Additionally, the player could receive 20 percent on his losses, $50,000 to $75,000 in promo chips, and 40 percent of all theoretical losses in comps.
“If you’re all gaming people and you do the math, there’s nothing left,” said Nutton. “We all got so competitive in Las Vegas between the MGM and Caesars properties, Wynn and Venetian for the same pool of limited business; we went after it like gangbusters to our own demise. Nowadays they don’t have to fly for 20 hours; they can go to amazing properties in Singapore and Macau. The only incentive we could really give them to leave their neck of the woods was more and more.”
At Thunder Valley Casino, table game margins are much higher, said Dawn Clayton, assistant general manager, in no small part because the property avoids the top of the high-end table game market. “We answer to the tribal council of the United Auburn Indian Community and they opted not to book that high-end business,” she said. “We have tribal distributions that we are committed to each and every month, so the volatility and the swings of this market is not the business that they’re after. They like to know exactly what their margins are going to be each month.”
Clayton added that the $1 million-$3 million customer is extremely educated about how far they can go with deals. “When you look at the bottom line, it’s really not worth it.”
That was among the key points made at a table games marketing and operations session Tuesday at G2E. “High end is very expensive,” said London Swinney, vice president, casino operations, MGM Grand. “We now compete with Macau and Singapore; the customers are more demanding in terms of discounts, promo chips and comps; a more expensive customer than you would have at a regional property. We’ve seen our margins in table games decline as a result.”
Las Vegas started incentivizing high-end international table game players about 15 years ago, said Debra Nutton, senior vice president, casino operations, Bellagio. “It can be very difficult to collect on a debt; it really comes down to the relationship between the host and the customer. You have to believe your host when he says a player with $3 million in credit is going to pay.” Nutton said a high-end player with $1.5 million in cash might be offered $1.5 million in credit. If he paid the $1.5 million in so many days, he’d get 3 percent quick-pay break. Additionally, the player could receive 20 percent on his losses, $50,000 to $75,000 in promo chips, and 40 percent of all theoretical losses in comps.
“If you’re all gaming people and you do the math, there’s nothing left,” said Nutton. “We all got so competitive in Las Vegas between the MGM and Caesars properties, Wynn and Venetian for the same pool of limited business; we went after it like gangbusters to our own demise. Nowadays they don’t have to fly for 20 hours; they can go to amazing properties in Singapore and Macau. The only incentive we could really give them to leave their neck of the woods was more and more.”
At Thunder Valley Casino, table game margins are much higher, said Dawn Clayton, assistant general manager, in no small part because the property avoids the top of the high-end table game market. “We answer to the tribal council of the United Auburn Indian Community and they opted not to book that high-end business,” she said. “We have tribal distributions that we are committed to each and every month, so the volatility and the swings of this market is not the business that they’re after. They like to know exactly what their margins are going to be each month.”
Clayton added that the $1 million-$3 million customer is extremely educated about how far they can go with deals. “When you look at the bottom line, it’s really not worth it.”
