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.”
Table game operators ponder the expensive costs of high-end play
October 3, 2012
No Comments