I figured that this day would come, just not this soon.
“What day?” you may well ask. “The day casinos start to close,” I respond.
I am not just referring to the stray, undercapitalized or poorly-run casinos. No, I am talking about the now seemingly regular occurrence of casinos closing in numerous jurisdictions across the country; a growing list that includes Atlantic City, N.J.; Tunica and Biloxi in Mississippi; Southern California, and my hometown of Reno, Nev., where, to be honest, perhaps a few more casinos should close.
I bet you’re wondering what is going on, and trying to determine why so many casinos are closing. More importantly, I hope you’re contemplating what can be done to avoid the same fate.
Well, I’m here to help with some answers and advice. For those still trying to wrap their minds around current gaming market conditions, here are some of the reasons casinos across the nation are going under:
The proliferation of casino gaming. Once rare in the U.S., casino gaming has expanded to the point where most states now have it or will soon allow it, the one remaining holdout being Utah. (Knowing Hawaiians’ love of gambling, I put Hawaii in the “soon to allow” category).
Casino cannibalization is now nationwide. The establishment of casinos in a new jurisdiction takes business and revenue away from established gaming markets in neighboring areas. Ohio gets casinos and they gnaw profits from Indiana-based gaming properties. Pennsylvania gnaws on West Virginia. Northern California tribal casinos gnaw on Reno. Massachusetts will gnaw on Foxwoods and Mohegan Sun. Every state in the east now gnaws on New Jersey.
The ongoing impact of the Great Recession. It’s well documented that the middle-class consumers feel the economic recovery has largely left them behind. As a result, the vast majority of casino players are still watching their “discretionary gambling dollars” very closely.
The gambling population has become static. Gamblers of legal age who had an interest in either sampling casino gaming or establishing a relationship with a gaming property have probably already done so. There are no existing gambler market segments left for the casino industry to exploit.
The rise of slot-only gaming facilities. In several states, high tax rates have inhibited casino reinvestment or amenity development, leaving a lot of “slot warehouses” across the landscape. These are not as interesting or as attractive as full-scale casino resorts.
The negative impact of some new gaming technologies. Over the last couple of decades, the casino industry has slowly, consistently and almost imperceptively squeezed the players’ gambling experience to where we now take players’ gambling budgets faster than at any point in history. Ticket in-ticket out (TITO), higher holding penny slot machines, increasing ATM usage fees, “6 to 5” blackjack games and numerous other “profit squeezers” have, in the short term, helped us grow revenues, cut costs and meet budgets. In the long term, I’m afraid we have created many more disenchanted, time-on-device-deprived and poorer gaming customers. Shame on us.
PATH TO SUCCESS
But therein lies the opportunity and the roadmap to keep your casino from ever closing—restore more value to your gaming customers’ playing experience.
Notice that I didn’t say give them more free play (although they will like that for a brief while). No, “more value” can mean many things, and be different for different casinos in different markets.
But providing more value is not just offering deals. It is also having truly knowledgeable employees going above and beyond to help a customer. It is saying “thank you” to your best players earnestly and often. It is your senior executives on the gaming floor on busy weekends, touching both team members, as well as players. It is all that and more.
And if you can head down your own unique road of restoring value to players, not only will you never have to worry about closing, you will actually thrive.