Casino operators discuss table games strategy
A panel of table game operators discuss strategy and solutions to common problems faced by all
Casino Journal’s Cutting Edge Table Games Conference features an annual operator roundtable that gives attendees a high-level, hands-on view of the many operational issues driving the table games business at casinos around the country, and the trends that impact the business daily. This interactive session features successful table game executives across multiple markets discussing their top priorities, and the steps they are taking to defend and grow table game revenue. The 2018 edition, held last November, was moderated by Michael Hochman, vice president of casino operations, Canterbury Park. Panelists were Michael May, vice president of table operations, Pechanga Resort & Casino; Scott Hanson, corporate vice president gaming, Mille Lacs Corporate Ventures; and Kevin Parker, a Raving partner specializing in casino operations and technology. A summary of their conversation follows:
HOCHMAN: How do table game operators get a seat at the management table and ensure their slice of the pie? A lot of you work in a world where slots get all the attention from marketing, the CFO and the CEO. Given that, Scott, you just increased the number of table games at your top property from 68 to 72… how did that happen?
HANSON: It’s really about creating ROI. We have two different properties and at one we’re actually downsizing the number of table games. The other property has a little bit more volume and I was able to increase ROI to the point where there was a need for more high-limit tables. I actually think there’s a resurgence of table games today. The next generation of gamers are really into that social environment. If we continue to create those energy areas with new table games the ROI’s are going to come. That’s what we did at the one property. When you see more and more games with bonuses and the like that developers (at this event) are producing; people are gravitating to them. When you see life-changing progressives in table games, we can now compete with that slot market because our players now have the same opportunity.
PARKER: One of the big things we need to do as table game operators is to be reasonable in our expectations. I have visited casinos in very rural areas in the middle of the country with no local competition other than themselves that had 6:5 on their blackjack games. You’re going to get that customer’s money; give them a fair game. You can side bet the heck out of stuff and I think that’s a wonderful way to go. It’s a great way to raise the hold percentage on your games. It gives the dealers an opportunity because many times players will put up a bet for them on a side bet. And it creates energy on the games. But when we take our regular games in rural casinos and treat them like games that are in Detroit or even Pechanga… You have to give players a fair shot. Not to have winners, but to have players. Think of it in that mindset.
MAY: The difficulty for us as table operators is the sense of geography. You walk on the floor and you see where tables are, what percentage of the floor they occupy… how do you get that floor space? An aspect of it is relationship-driven. I’ve worked with a number of slot folks over the years where, boy, it was a battle. Even when you bring analytics to the table that say, ‘Look, you’re running at 30 percent here on a Saturday night and I’m running at 90 percent, we have to figure something out.’ I was lucky when I first got to Pechanga, working with Buddy Frank (as vice president of slots). We had the same mindset; both of us started as crap dealers so there was that advantage.
You need to force yourself to the table and not just for the gaming discussion. We did an expansion at Pechanga, another 500-plus rooms, an additional 4.5-acre pool complex; you better be in the room with everybody who is involved in the design aspect.
To Kevin’s point about being realistic, you do need to be realists about percentages. The slot guy is going to go out there and get 250 machines, and you know the square footage that something like that requires. If I can grab eight to 10 new table games in a space that might be weak for slots, it can force that ROI discussion. ROI is one thing, but you have to have a willingness as a company to take a chance, and, certainly, with Pechanga as a tribe, I’ve been very lucky. You take a chance on innovation and, ultimately, you find the things that succeed.
HANSON: I really like your comments about building relationships with the slot team. You’ve got to let them know how you can help them. Creating energy areas with table games draws people in. Table games bring in TVs, loud music and, in some places, dancers; that drives people to areas and it helps slot machines.
MAY: You have to look at the data… there is a relationship between slot players and table players. Our slot players are one of the biggest attendees when we do a double-deck blackjack tournament. Data drives everything. Ultimately, that’s what allows you to sit with your general manager and say, ‘Look, we added this and look what it did for the slot business.’
ASSESSING NEW GAMES
HOCHMAN: Kevin, when we’re talking about space on the floor and electronic table games and stadium gaming, say, with 32 terminals and one dealer, how are jurisdictions counting that? Is that one table?
PARKER: It depends on the jurisdiction. In Arizona, one seat with one random number generator will count for five seats. In California, a live dealer with a stadium set-up falls under table games. If it has a bill validator and a printer, then they consider it a slot machine.
If you go to Europe or Asia, electronic table games are five or six percent of the mix and growing. One of the problems we have here is we treat it as a slot machine and pull it out because it’s not making x amount of dollars per-unit per-day… they aren’t designed to do that; it’s a technological aid to table games. Some corporations out there are pulling out all their low-limit blackjack games; what these games do is tackle the issue of wages and benefits ratio as opposed to the revenue we bring in. That’s important. As the casino market matures, there’s more of an idea that it’s not table games revenue, slot revenue, hotel revenue—it is casino or resort revenue.
HOCHMAN: We have a finite number of tables competing for limited floor space. There are a bunch of new table games out there and we find one that we’d like to evaluate. In some cases, if I want to put a game on the floor, I have to take a game off the floor. How do we figure this out? And how long do we evaluate the game before we decide to keep it or not?
MAY: This is an example of what we’re able to do at Pechanga because it’s so big. There’s a game developer here named Mark Jones who came to me with a roulette idea. In California, we have no roulette; you can’t use the ball. His idea was the carded wheel, which is basically a roulette game without the ball. That was nine years ago and I started out with a couple. We have 13 now and I’ll probably add more.
For me at a big property, the value is having multiple game types at a property. The challenge for game inventors is to come up with something that is not just one game. If I put one table on the floor at Pechanga with all the tables I have, where is the value for my customer base? If I’ve got 13 of these roulette tables that are full every Saturday night and I’m able to add more, that’s where that relationship with the game developer and with a new game type really adds value for a big property.
PARKER: I’m going to offer a gentle dissenting opinion. The properties I’ve opened up on the slots and table games sides in rural areas… in those markets with limited budgets, you’re going to try anything you can to get the best product on your floor. So one of the things that I would do is work with new game vendors to dial in a game that worked for me. I could put something out there that I think my customers are going to like and if it fails, it fails cheaply. But if I’m going to make that investment and put a new game in at a small property, I have got to give it time. There are some trials that I’ve put out for 120 days when I had 90 days free, just to make sure that I had done everything that I could to make it successful.
HANSON: For me, the easy answer is to keep an eye on the competition and see what’s working well. We have a finite number of games that we can have on that floor. When you’re very tight on games, you’re looking at hands-per-hour, how much time you’re going to spend teaching your players how to play that game and what the game can deliver. When your utilization is running 85 to 90 percent all the time, you don’t have much time to teach people how to play; you’re hoping they learned that game somewhere else before they came to your property. Also, we’re a tribal casino where we have compacted Class III blackjack and that really prevents us from doing anything but Class II versions of the carnival games.
TECHNOLOGY & ITS IMPACTS
[Audience question:] When we started out we did pencil-and-paper player tracking—you counted your own rack at night and didn’t have to worry about chips. How much information do you use from these table game management systems, because in slots it’s about 10 percent…?
HANSON: We’re just now taking data science into table games and utilizing it. What are the influencers bringing people in; what are their behaviors; analyzing game performance… there’s so much to that and it will play an incredible role in the future of table games.
MAY: It’s this cart-before-the-horse problem. RFID, optical scanners… all of these things that we as operators have not been able to invest in. At Pechanga, we use all the data. We sit with Scientific Games, the people who have our management system, and we develop analytics that are important to us. But in the end, you still have a person doing your ratings. Until we, as an industry, put the money behind all these technologies, we’re always going to lag significantly behind the slot systems.
Data science is something different. We have a bunch of folks at Pechanga now who are not from the gaming world. They’re coming in and looking at our business very differently. The head guy came in to me the other day and said to me, ‘I have this group of players who all follow this one player all the time, and he’s a gold-level guy. What do you think about that?’ That’s understanding influencers on your floor. We always think internally, right? There are influencers on your floor who have an effect on the people around them. I think we’re just neophytes at finally understanding this. We made a mistake with our bus program a number of years ago where we really drilled into the analytics and removed a number of people. Well, it turns out one of the players was somebody’s grandmother. Though she was a very small average bet customer, three or four of the kids who came with her were all top-line customers and we lost them.
PARKER: With all the tools that we have, the other thing we need to do is not forget where we came from. We need to teach floor supervisors, shift supervisors and managers how we come to these equations and how to work a table. But we don’t want them to lose that special thing that makes us table games folks; to be able to run down racks, make judgment calls and things like that. More and more I go to properties and I’ll see a lack of floor supervisors who can’t figure out bets on the fly anymore. There are some gifted ones out there, but I think what happens is technology moves so quickly that we can forget our roots. We need to keep those traditions up and remember why we did things the way we did in the first place.
HANSON: I agree with that. Talking about old school, I try to take in as many games as I can when I come out here, but it all comes down to one thing: it’s the dealer who’s selling that game. I can sit on any game out there and have fun and the next dealer comes in and I’m just miserable. If the dealer is not interested, doesn’t sell the game or sell the bonuses. I had one dealer who didn’t tell me about a bonus or the advantages and disadvantages of playing it. The next dealer sold it to me and I played that bonus. Dealers make and break your games. That takes a lot of training, but they’re the ones who are going to draw players and get them to play those games.