1. 11
Gaming Entertainment

2. Chapter Objectives
After reading and studying this chapter, the student should be able to do the following:
Outline the history of modern casinos.
Describe the various components of modern casino hotels.
Explain how casinos have been integrated into larger hospitality operations.
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3. Chapter Objectives
After reading and studying this chapter, the student should be able to do the following:
Understand the basic principles of casino operations.
Discuss the different positions within the gaming industry.

4. Gaming Entertainment
While the gaming entertainment industry is a global industry, there are five types of legal gambling in the Unites States.
This includes charitable gaming, commercial casinos, lotteries, Native American gaming, and pari-mutuel gaming.
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5. Gaming Entertainment
Some form of legal gaming exists in 48 of the 50 states, with commercial casinos representing the largest part of the domestic gaming market.
While gaming revenues vary by state, the industry contributes billions of dollars in tax revenue to these local governments on an annual basis.
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6. Gaming Entertainment
The gaming entertainment industry has seen development not only in the United States, but also internationally, particularly in the Asian destinations of Macau and Singapore.
The size and scope of the global gaming industry are expected to reach $117.9 billion dollars in 2015.
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7. Gaming Entertainment
Gambling is playing a game of risk for the thrill of the action and the chance of making money.
This product, gaming entertainment, has evolved over the past decade.
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8. Gaming Entertainment
Gaming entertainment serves a customer base of social gamblers, customers who play a game of risk as a form of entertainment and social activity, thus combining gambling with other activities during their visits.
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9. Gaming Entertainment
Social gamblers, by this definition, are interested in many gaming entertainment amenities and take part in many diverse activities during a stay.
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10. Gaming Entertainment
Gaming entertainment refers to the casino gaming business and all its aspects, including hotel operations, entertainment offerings, retail shopping, recreational activities, and other types of operations, in addition to wagering on the gaming floor.
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11. Gaming Entertainment
Gaming entertainment is the business of hospitality and entertainment with its core strength in casino gaming.
According to this definition, a gaming entertainment business always has a casino floor area that offers various games of risk that serve as the focal point for marketing to and attracting guests.
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12. Gaming Entertainment
Next in importance to the guests are high-quality food and beverage (F & B) operations.
Gaming entertainment offers a place where guests can gamble (the casino floor), eat and drink, sleep and relax, and maybe do some business.
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13. Gaming Entertainment
But there is much more—the entertainment ranges from live performances by the most famous entertainers to production shows that use high-tech wizardry.
Gaming entertainment includes theme parks and thrill rides, museums, and cultural centers.
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14. Gaming Entertainment
The most popular gaming entertainment destinations are designed around a central theme that includes the hotel and the casino operations.
Nongaming revenue comes from sources that are not related to wagering on the casino floor.
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15. Gaming Entertainment
As the gaming entertainment concept continues to emphasize activities other than gambling, nongaming revenue is increasing in importance.
This is what gaming entertainment is truly about—hospitality entertainment based on the attraction of a casino.
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16. Gaming Entertainment
Casinos are also operated by Native American tribes on their reservations and tribal lands.
These are land-based casinos and are often as complex as any operations in Las Vegas. Gaming entertainment is also popular on cruise ships.
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17. Gaming Entertainment
There is strong support for gaming in the marketplace as an entertainment activity.
Patrons are required to be 21 years of age to gamble in the United States, and research shows that more than a third of Americans have visited a casino in the last 12 months, and 32% of them have actually gambled in those 12 months.
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18. Gaming Entertainment
According to the market research, more than 85% of U.S. adults say casino entertainment is acceptable for themselves or others.
86% of Americans report having gambled at least once.
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19. Gaming Entertainment
Commercial casinos account for 36% of gaming revenue. Indian casinos and state lotteries tie for second place at 26%.
The demographic makeup of the typical gaming entertainment guest has remained consistent during the past several years.
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20. Gaming Entertainment
In comparison to the average American, casino players tend to have higher levels of income and education and are more likely to hold white collar jobs.

21. Historical Review of Gaming Entertainment
The precise origin of gambling is still unknown today.
However, according to Chinese records, the first official account of the practice dates back to as far as 2300 B.C.
The Romans were also gamblers: they placed bets on chariot races, cockfights, and dice throwing.
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22. Historical Review of Gaming Entertainment
Since the state of Nevada legalized gambling in 1931, Las Vegas has been transformed into one of the most elaborate cities in the world and one of the hottest vacation spots.
From the early 1940s until 1976, Nevada, and predominantly Las Vegas, had a monopoly on the gaming entertainment business.
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23. Historical Review of Gaming Entertainment
Casinos had no hotel rooms, entertainment, or other amenities.
The hotels that existed were just places to sleep when guests were not on the casino floor.
Las Vegas is rich with tales of Benjamin Hymen Siegelbaum, better known as Bugsy Siegel.
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24. Historical Review of Gaming Entertainment
After developing criminal associations his entire life, Siegel moved on to build the well-known Flamingo Hotel and Casino in Las Vegas.
During the 1970s, Atlantic City was in an impoverished state, with high rates of crime and poverty.
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25. Historical Review of Gaming Entertainment
In an effort to revitalize the city, New Jersey voters, in 1976, approved casino gambling in Atlantic City.
Later casino gambling was legalized in the state of New Jersey by the Casino Control Act.

26. Native American Gaming
In California v. Cabazon Band of Mission Indians, et al. (1987), the Supreme Court decided 6 to 3 that once a state has legalized any form of gambling, the Native Americans in that state have the right to offer and self-regulate the same games without government restrictions.
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27. Native American Gaming
Congress responded to these court decisions by passing the Indian Gaming Regulatory Act of 1988 (IGRA).
The IGRA provides a framework by which games are conducted in a way that protects both tribes and the general public.
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28. Native American Gaming
There are over 400 gaming facilities on reservation lands in 28 states, and Native American gaming has been one of the fastest growing sectors of gaming in the United States.

29. The Casino Resort: A Hospitality Buffet
Twenty of the 30 largest hotels in the world are casino resorts on the Las Vegas Strip.
The size and scope of the global gaming industry is expected to reach $117.9 billion dollars in 2015.
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30. The Casino Resort: A Hospitality Buffet
Today, many casino resort presidents and key executives have come up through the lodging or F & B side of operations.

31. What is Gambling?
In its broadest definition, gambling is the act of placing stakes on an unknown outcome with the possibility of securing a gain if the bettor guesses correctly.
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32. What is Gambling?
To be considered gambling, an act must have three elements: something wagered (the bet); a randomizing event (e.g., the spin of slot reels or the flip of a card); and a payoff.
Some of the best-known games, poker, blackjack, and baccarat, are played with cards, and craps with dice.
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33. What is Gambling?
Slot machines, which were originally mechanical (but now are electronic) devices, award prizes based on the random stopping of reels, are also popular, and are typically the most-played games in most casinos today.
There are two basic categories of gambling: social gambling and mercantile (or commercial) gambling.
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34. What is Gambling?
Social gambling is conducted among individuals who bet against each other; mathematically, each player has the same chance of winning.
In mercantile, or commercial gambling, players bet against “the house,” a professional gambler or an organization that accepts wagers from the general public.
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35. What is Gambling?
Mercantile games have a mathematical advantage for the casino, or a house edge, that lets professionals profit from them while still offering fair games.
The house edge is what makes casinos possible; without it, the only way to offer games of chance to the public that can generate an income would be to cheat.
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36. What is Gambling?
The house edge allows casinos to offer their customers honest games that are fairly dealt, and still remain in business.
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.
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37. What is Gambling?
The “hold percentage” is the percentage of the total handle that is retained as win.
As a manager of a casino resort, it is important that you have an appreciation of the nature of volatility.
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38. 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 toward their historical average.

39. Comps: A Usual Part of an Unusual Business
Comps are complimentary goods and services offered to casino patrons in order to attract their business.
The value of comps varies; generally speaking, higher-producing players are given higher value comps.
Casinos, with thousands of guests on any given day, rely on customer loyalty programs to track patron play.
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40. Comps: A Usual Part of an Unusual Business
Patrons who wish to receive comps and other offers join the casino’s player loyalty club.
Casinos use the information they gain about a player’s gambling patterns to offer him/her comps, based both on theoretical wins by the player and his/her expected levels of play.
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41. Comps: A Usual Part of an Unusual Business
Loyalty programs are an essential part of casino marketing; many guests base the money they spend gaming around where they receive the best comps, so good casino managers know they must send out good offers to qualified players.
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42. Comps: A Usual Part of an Unusual Business
Recently, some casinos have begun tracking and rewarding nongaming spending as well, a reflection of the broadening of the casino resort revenue stream.

43. Types of Casino Operations
At one end of the spectrum is the Nevada-style gaming tavern, which is a typical bar and restaurant that has less than sixteen electronic gaming devices.
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44. Types of Casino Operations
At the other is a fully-developed casino resort, with (on average) a 100,000-square-foot casino featuring thousands of slot machines and dozens of table games, approximately 3,000 hotel rooms, at least a dozen bars and restaurants, meeting and convention facilities, entertainment venues, retail shopping, and pool and spa facilities.
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45. Types of Casino Operations
Stand-alone casinos are not very common in the United States or elsewhere in the world.
Where they are found, they usually consist of only slot machines; this type operation might be called a slot parlor.
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46. Types of Casino Operations
In the United States, casinos on Indian reservation can take many forms, from bingo parlors in prefabricated buildings to fully functional casino resorts with lodging, dining, and entertainment that are indistinguishable from resorts on the Las Vegas Strip.
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47. Types of Casino Operations
Some states allow gambling only on riverboats; other states allow slot machines at racetracks (called “racinos”); and finally, many cruise lines have casinos as part of the amenities for guests on their ships.

48. Components of Casino Resorts
Destination resorts in Las Vegas are centered on casinos that have several types of games available: slot machines, table games, race and sports books, poker rooms, and live keno games.
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49. Components of Casino Resorts
In most parts of the United States, slot machines produce the bulk of the revenue; on the Las Vegas Strip, it is closer to a 50/50 split.
Among table games, blackjack is most popular nationally, while on the Strip baccarat has recently become a favorite.
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50. Components of Casino Resorts
In Macau casinos, nearly all revenue comes from high-stakes baccarat.
Casino resorts also include lodging, F&B, entertainment venues, retail shopping, convention facilities, nightclubs, pools, and spas.

51. Evolution of Gambling and Casinos
Gambling is among the oldest of human behaviors; archaeological evidence of gambling stretches back into prehistory, and purpose-built dice have been discovered at sites dating back to 7,000 years before the present.
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52. Evolution of Gambling and Casinos
Gambling developed in nearly every ancient civilization of consequence and has been part of Western life since the days of Ancient Greece.
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53. Evolution of Gambling and Casinos
Casino resorts, as they are currently operated, are much younger, dating back only to 1941, though the casino industry has its antecedents in several earlier developments, both legal and illegal.
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54. Evolution of Gambling and Casinos
Legal public gambling in casinos dates back to 1638, when the Grand Council of Venice awarded a franchise or a single legal casino in that city.
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55. Evolution of Gambling and Casinos
In the United States, public gambling at cards and dice was legal intermittently during the nineteenth century in several states, including Louisiana, California, and Nevada, but by 1910 this kind of gambling—and playing at slot machines—had been outlawed everywhere in the United States.
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56. Evolution of Gambling and Casinos
Yet the tide soon turned toward legalization, at least in Nevada.
When legislators authorized “wide open” commercial gambling there in 1931, the state was in the throes of the Great Depression.
By allowing taverns and hotels to conduct games of chance, they hoped to increase tourism slightly.
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57. Evolution of Gambling and Casinos
The real creation of the modern casino came in 1941, with the opening of the El Rancho Vegas, the first casino resort on what would become the Las Vegas Strip.
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58. Evolution of Gambling and Casinos
These casinos were superior to gambling halls because, with rooms and a full range of amenities, they offered a diverse set of options for travelers—gamblers and non-gamblers alike.
By the mid-1950s, the casino resorts of the Las Vegas Strip had changed Nevada.
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59. Evolution of Gambling and Casinos
Now numbering more than a dozen, they became an integral part of the state’s economy.
The industry grew, and with the entrance of publicly traded corporations in the 1970s, it became more integrated into the national economic mainstream.
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60. Evolution of Gambling and Casinos
As a result, by 2000, Las Vegas Strip casinos accounted for well over half of all state gambling revenues.
In 1976, New Jersey voters legalized casino gambling in Atlantic City by referendum, and two years later the first legal casino on the East Coast opened.
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61. Evolution of Gambling and Casinos
Riverboat gaming, which permitted games of chance on boats, debuted in Iowa and Illinois in 1991, and soon spread throughout the Midwest and South, with a robust presence in Mississippi.
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62. 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.
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63. Evolution of Gambling and Casinos
The following year, the Indian Gaming Regulatory Act codified the rules under which Indian tribes could open “Las Vegas-style” casinos with slot machines and bank games.
To do so, the tribes needed to sign a compact, or treaty, with the state in whose land the reservation sat.
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64. Evolution of Gambling and Casinos
As of 2010, over 200 tribes in more than thirty states have some form of gambling operation, with combined annual revenues of more than $25 billion.

65. Working in a Casino Hotel Operations
The career opportunities in gaming entertainment hotel operations are much like the career opportunities in the full-service hotel industry, with the exception that F & B can be a division of its own and not part of hotel operations.
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66. Working in a Casino F & B Operations
Gaming entertainment has a foundation of high-quality F & B 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.
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67. Working in a Casino Casino Operations
Casino operations jobs fall into five functional areas; gaming operations, casino service, marketing, human resources, and finance and administration.
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68. Working in a Casino Retail Operations
The increased emphasis on nongaming sources of revenues in gaming entertainment demands an expertise in all phases of retail operations, from store design and layout to product selection, merchandising, and sales control.
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69. Working in a Casino Entertainment Operations
Because of the increased competition, gaming entertainment companies are creating bigger and better production shows to turn their properties into destination attractions.
Some production shows have climbed into the millions-of-dollars range and require professional entertainment staffs to produce and manage them.

70. The Mirage Effect
Since the 1990s, rooms have become a major revenue center.
In 1992, Wolfgang Puck opened Spago in the Forum Shops at Caesars Palace—leading to an explosion of both gourmet-dining opportunities for patrons and an increase in restaurant revenues for casinos.
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71. The Mirage Effect
Headliner concerts and installed shows (Cirque du Soleil alone has five) raised their production values and their prices.
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72. The Mirage Effect
And with the growth of full-fledged shopping malls inside casinos, ranging from the Canal Shops at the Venetian to the Miracle Mile at Planet Hollywood, retail spending has climbed—as well as the ascendancy of nightclubs, ultra-lounges, and day clubs.

73. Sustainability in Gaming Entertainment
Gaming entertainment companies continue adapting their operations and practices to fit “green” standards.
Caesar’s Entertainment Corporation has undertaken a sustainable initiative in several areas of operation, including energy, waste and water conservation, as well as climate control.
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74. Sustainability in Gaming Entertainment
Hospitality Green LLC, an environmental consulting firm, has taken on the task of creating a model for “green” standards that will set a precedent for which existing and future initiatives will be measured.

75. Career Information
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.
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76. Career Information
Knowledge of all areas of the industry is essential for advancement.
To get a job in the gaming industry, one must have very thorough knowledge of the legal, regulatory, and compliance issues related to daily operations in the casino.

77. Trends in the Gaming Entertainment Industry
Gaming entertainment is depending less on casino revenue and more on rooms, F & B, retail, and entertainment. Other trends include; an emphasis on loyalty player smartcards, universal gaming machines, a new generation of gamblers (including Millennials and Generation X), Candid Sky Camera technology, and more emerging markets around the world.