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Gaming Entertainment Chapter 11 John R. Walker Introduction to Hospitality, 6e and Introduction to Hospitality Management, 4e.

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Presentation on theme: "Gaming Entertainment Chapter 11 John R. Walker Introduction to Hospitality, 6e and Introduction to Hospitality Management, 4e."— Presentation transcript:

1 Gaming Entertainment Chapter 11 John R. Walker Introduction to Hospitality, 6e and Introduction to Hospitality Management, 4e

2 Introduction to Hospitality, 6e and Introduction to Hospitality Management, 4e - Walker © 2013 by Pearson Higher Education, Inc Upper Saddle River, New Jersey All Rights Reserved The Casino Resort: A Hospitality Buffet Twenty of the thirty largest hotels in the world are casino resorts on the Las Vegas Strip Today, many casino resort presidents and key executives have come up through the lodging or food and beverage side of operations

3 Introduction to Hospitality, 6e and Introduction to Hospitality Management, 4e - Walker © 2013 by Pearson Higher Education, Inc Upper Saddle River, New Jersey All Rights Reserved What is Gambling? Gambling is the act of placing stakes on an unknown outcome with the possibility of securing a gain if the bettor guesses correctly. To be considered gambling, an act must have three elements: something wagered (the bet), a randomizing event (the spin of slot reels or the flip of a card), and a payoff

4 Introduction to Hospitality, 6e and Introduction to Hospitality Management, 4e - Walker © 2013 by Pearson Higher Education, Inc Upper Saddle River, New Jersey All Rights Reserved What is Gambling? There are two basic categories of gambling: Social gambling and mercantile (or commercial) gambling. Social gambling is conducted among individuals who bet against each other In mercantile or commercial gambling, players bet against “the house,”

5 Introduction to Hospitality, 6e and Introduction to Hospitality Management, 4e - Walker © 2013 by Pearson Higher Education, Inc Upper Saddle River, New Jersey All Rights Reserved What is Gambling? The house edge is what makes casinos possible The house edge allows casinos to offer their customers honest games, fairly dealt, and still remain in business. The house edge is defined as a mathematical formula that allows the ‘house’ to keep a small percentage of every bet made by a player. The player may have some ‘luck’ in the short run but the house ‘advantage’ usually prevails over the long run.

6 Introduction to Hospitality, 6e and Introduction to Hospitality Management, 4e - Walker © 2013 by Pearson Higher Education, Inc Upper Saddle River, New Jersey All Rights Reserved What is Gambling? The handle is the total amount of money bet at a game. The win is the handle minus the money paid out on winning bets—essentially, what the casino keeps. The hold percentage is the percentage of the total handle that is retained as win.

7 Introduction to Hospitality, 6e and Introduction to Hospitality Management, 4e - Walker © 2013 by Pearson Higher Education, Inc Upper Saddle River, New Jersey All Rights Reserved What is Gambling? Just because the casino department is reporting a net loss for a shift does not necessarily mean that the department is inefficient or incompetent; it may just be an expression of volatility. Over time, gaming wins will tend towards their historical average (house advantage). Because of volatility, even a busy casino can end up in the red for a shift or even a weekend if one high-stakes player has a run of good luck.

8 Introduction to Hospitality, 6e and Introduction to Hospitality Management, 4e - Walker © 2013 by Pearson Higher Education, Inc Upper Saddle River, New Jersey All Rights Reserved Comps: A Usual Part of an Unusual Business Comps are complimentary goods and services offered to casino patrons in order to attract their business Comps are distributed as a usual part of a casino’s operation. The value of comps varies; generally speaking, higher-producing players are given higher-value comps

9 Introduction to Hospitality, 6e and Introduction to Hospitality Management, 4e - Walker © 2013 by Pearson Higher Education, Inc Upper Saddle River, New Jersey All Rights Reserved Comps: A Usual Part of an Unusual Business Casinos, with thousands of guests on any given day, rely on customer loyalty programs to track patron play Casinos use the information they gain about a player’s gambling patterns to offer him or her comps, based his or her expected levels of play. Most loyalty programs have tiered rewards structures, giving patrons an incentive to play more and unlock more rewards.

10 Introduction to Hospitality, 6e and Introduction to Hospitality Management, 4e - Walker © 2013 by Pearson Higher Education, Inc Upper Saddle River, New Jersey All Rights Reserved Types of Casino Operations Nevada-style gaming tavern, which is a typical bar and restaurant that has less than sixteen electronic gaming devices Stand-alone casinos usually consist of only slot machines Indian reservation may be bingo parlors in prefabricated buildings to fully functional casino resorts Riverboats are usually permanently moored casinos with F&B facilities, and a hotel

11 Introduction to Hospitality, 6e and Introduction to Hospitality Management, 4e - Walker © 2013 by Pearson Higher Education, Inc Upper Saddle River, New Jersey All Rights Reserved Components of Casino Resorts Destination resorts, such as those found in Las Vegas, are centered on casinos that have several types of games available: –Slots –Table games (21, craps, roulette, baccarat, etc.) –Race and sports books –Poker rooms

12 Introduction to Hospitality, 6e and Introduction to Hospitality Management, 4e - Walker © 2013 by Pearson Higher Education, Inc Upper Saddle River, New Jersey All Rights Reserved Components of Casino Resorts In most parts of the United States, slot machines produce the bulk of the revenue Among table games, blackjack is most popular nationally Casino resorts also include the following components: –Lodging –F&B –Entertainment –Retail shopping –Convention facilities –Nightclubs

13 Introduction to Hospitality, 6e and Introduction to Hospitality Management, 4e - Walker © 2013 by Pearson Higher Education, Inc Upper Saddle River, New Jersey All Rights Reserved Evolution of Gambling and Casinos Gambling is among the oldest of human behaviors Purpose-built dice have been discovered at sites dating back to 7,000 years ago Casino resorts, as they are currently operated, are much younger, dating back only to 1941

14 Introduction to Hospitality, 6e and Introduction to Hospitality Management, 4e - Walker © 2013 by Pearson Higher Education, Inc Upper Saddle River, New Jersey All Rights Reserved Evolution of Gambling and Casinos By 1910 gambling had been outlawed in the United States In the midst of the Great Depression, in 1931, Nevada legalized gambling in order to increase tourism The El Rancho Vegas, was the first casino resort on what would become the Las Vegas Strip

15 Introduction to Hospitality, 6e and Introduction to Hospitality Management, 4e - Walker © 2013 by Pearson Higher Education, Inc Upper Saddle River, New Jersey All Rights Reserved Evolution of Gambling and Casinos In the 1970’s casinos were being purchased by corporations, integrating them into the national economy and initiating new regulatory scrutiny In 1976, New Jersey voters legalized casino gambling in Atlantic City Riverboat gambling debuted on the Mississippi in 1991

16 Introduction to Hospitality, 6e and Introduction to Hospitality Management, 4e - Walker © 2013 by Pearson Higher Education, Inc Upper Saddle River, New Jersey All Rights Reserved Evolution of Gambling and Casinos In the 1987 Cabazon decision, the Supreme Court affirmed that if a state allowed betting on bingo or card games, Indian tribes could offer these games without limits imposed by state regulators Today, there are more than 200 Native American tribes operating casinos in more than 30 states with revenues of more than $25 billion

17 Introduction to Hospitality, 6e and Introduction to Hospitality Management, 4e - Walker © 2013 by Pearson Higher Education, Inc Upper Saddle River, New Jersey All Rights Reserved Evolution of Gambling and Casinos American-run casino operators have found that Asia is an even more lucrative market for casinos than the United States. Both Macau (2004) and Singapore (2010) have become casino powerhouses Since 2008, Macau’s casino industry has become a world-wide leading gaming center with increasing revenues surpassing Las Vegas by nearly 400%

18 Introduction to Hospitality, 6e and Introduction to Hospitality Management, 4e - Walker © 2013 by Pearson Higher Education, Inc Upper Saddle River, New Jersey All Rights Reserved Working in a Casino Resort Hotel operations: –Much like the career opportunities in the full-service hotel industry, with the exception that food and beverage can be a division of its own and not part of hotel operations Food and beverage operations: –High-quality food and beverage service in a wide variety of styles and concepts –Some of the best foodservice operations in the hospitality industry are found in gaming entertainment operations

19 Introduction to Hospitality, 6e and Introduction to Hospitality Management, 4e - Walker © 2013 by Pearson Higher Education, Inc Upper Saddle River, New Jersey All Rights Reserved Working in a Casino Resort Casino operations: –Gaming operations –Casino service –Marketing –Human resources –Finance and administration

20 Introduction to Hospitality, 6e and Introduction to Hospitality Management, 4e - Walker © 2013 by Pearson Higher Education, Inc Upper Saddle River, New Jersey All Rights Reserved Working in a Casino Resort Retail operations: –Increased emphasis on nongaming sources of revenues –Gaming entertainment business demands an expertise in all phases of retail operations From store design and layout to product selection, merchandising, and sales control

21 Introduction to Hospitality, 6e and Introduction to Hospitality Management, 4e - Walker © 2013 by Pearson Higher Education, Inc Upper Saddle River, New Jersey All Rights Reserved Working in a Casino Resort Entertainment operations: –Because of the increased competition, gaming entertainment companies are creating bigger and better production shows to turn their properties into destination attractions –Production shows have climbed into the multi- million dollar range, with special entertainment venues built for superstars

22 Introduction to Hospitality, 6e and Introduction to Hospitality Management, 4e - Walker © 2013 by Pearson Higher Education, Inc Upper Saddle River, New Jersey All Rights Reserved The Mirage Effect Since the 1990s rooms have become a major revenue center Gourmet cuisine was introduced in 1992 when Wolfgang Puck opened Spago in Caesar’s Palace The quality and cost of entertainment has skyrocketed Full-fledged malls inside casinos have seen retail spending climb

23 Introduction to Hospitality, 6e and Introduction to Hospitality Management, 4e - Walker © 2013 by Pearson Higher Education, Inc Upper Saddle River, New Jersey All Rights Reserved Sustainability in Gaming Entertainment Gaming entertainment companies continue adapting their operations and practices to fit “green” standards. Many well-known companies in gaming entertainment are leading the way to establish sustainable initiatives Harrah’s Entertainment Inc. has undertaken a sustainable initiative in several areas of operation, including energy, waste and water conservation, as well as climate control

24 Introduction to Hospitality, 6e and Introduction to Hospitality Management, 4e - Walker © 2013 by Pearson Higher Education, Inc Upper Saddle River, New Jersey All Rights Reserved Career Information The growth of the gaming industry has resulted in a variety of new job openings. People choose to work in the industry because it is known to place people first, whether they are employees or customers Most careers include impressive benefits packages and offer many career advancement opportunities

25 Introduction to Hospitality, 6e and Introduction to Hospitality Management, 4e - Walker © 2013 by Pearson Higher Education, Inc Upper Saddle River, New Jersey All Rights Reserved Trends in the Gaming Entertainment Industry Gaming entertainment dependent less on casino revenue and more on room, F&B, retail, and entertainment Gaming and lodging are converging Continued scrutiny by government Exceptional service will drive the entire industry Continued improvement in management career opportunities

26 Introduction to Hospitality, 6e and Introduction to Hospitality Management, 4e - Walker © 2013 by Pearson Higher Education, Inc Upper Saddle River, New Jersey All Rights Reserved The End


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