The casino world is becoming saturated with talk of market “saturation.”

Every pundit, reporter, operator, investor, regulator and manicurist has an opinion on this important subject, and most tend to lead to one conclusion: the gaming market in the United States is becoming increasingly saturated. Once that observation is registered, the next question is: What should we do about it—other than complain to our manicurist?

“Saturation” is not exactly a difficult concept to grasp. It just means that there is too much supply of a product in the market. If your town has a pharmacy on every corner, and they are beating each other over the head for a share of the town’s prescription dollars, yes, that market is saturated. The concept is a factor in nearly every consumer business and profession, including the legal profession.

If your profession is TV repair, you are not going to set up shop in a small town that already has three TV repair shops, but you might find opportunity in a bigger city with a growing population, and few competitors. That is the basic concept.

Many in the gaming industry, it seems, are looking at this as if this is a new concept, and they are looking at it as if there is no solution.  Neither assumption is necessarily true or valid.

Consider a recent article in The Dayof New London, Conn., written by veteran gaming reporter Brian Hallenbeck. He refers in detail to the expansion of gaming in his home region of New England, noting that, “If everything that’s been proposed materializes—and that’s a sizable ‘if’—New England’s four gaming states could be home to 10 casinos and a slots parlor by, say, 2020. West of New England, two upstate New York casinos are scheduled to open next year in Schenectady and Thompson.

“To the south, slots-only racetrack casinos in and near New York City already cut into the Connecticut casinos’ share of the slots market. One of them, Resorts World Casino at the Aqueduct track in Queens, has been talking about expansion. And then there’s the prospect of a casino or two in northern New Jersey, if that state’s voters approve gaming outside Atlantic City in another Election Day referendum.”

Wow. Sounds like a lot of supply coming to that market. But Hallenbeck, who knows how to get all sides of an issue into his articles, also quotes veteran operators Felix Rappaport of Foxwoods and Bobby Soper of Mohegan Sun.

“A veteran of the Las Vegas gaming scene, Rappaport notes that America’s original casino market repeatedly has had to reinvent itself,” the article states. “Nongaming amenities now generate 65 percent of the Las Vegas casinos’ revenues, a model Foxwoods intends to emulate.”

“MGM, Wynn, the Mashpees—they’ll all build beautiful properties, but I don’t think they’ll ever be able to offer everything that we do,” Rappaport said in the piece. “We’re trying to build on that competitive advantage. If we do our job in the next couple of years, we’ll have the best chance. If we stick to what worked three, five, 10 years ago, we won’t.”

Well put. I tend to agree with veteran analyst Michael Pollock of Spectrum Gaming Group who has stated many times that the best way to get supply and demand in synch with each other is to increase demand.

Speaking at a recent National Council of Legislators from Gaming States (NCLGS) conference, Pollock noted that states dictate the business model that operators can offer by imposing high tax rates on their licensees. High tax rates translate into minimal amenities and convenience-driven gaming. By definition, convenience-based gaming appeals to a limited number of adults.

If states were to follow Spectrum’s advice, they would adjust their tax rates to broaden the appeal of their gaming properties. That would expand demand, and would keep that necessary balance between supply and demand.

No industry—and no profession—can face limitless expansion opportunities. Of course, there are limits. But are those limits determined by the marketplace, or are they determined by tax rates and other regulatory policies? That is a conversation worth having with your representatives, and perhaps your manicurist as well.