Mission146
Posted by Mission146
Apr 30, 2016

Disagreeing with One of Gambling's Greatest Minds (Again)

In his most recent Article, Advantage Player extraordinaire, James Grosjean, goes on a bit of a rail against the concept of Locals Casinos.  Admittedly, he does make some excellent points in there, (as well as some of the people who offered comments) but there is also a fair amount in his Article with which I disagree.  In order to give my Article context, might I suggest that you first read his:

http://beyondnumbers.lvablog.com/2016/04/05/local-casinos-economic-revival-or-black-hole/#more-437

The first thing that Grosjean does is mention that he was in the Cleveland area when the then-new Horseshoe Casino was opening and that he called into a program to talk about how pathetic the whole thing was as well as how pathetic the people playing there would be.  

While there are certainly a mix of people at the Horseshoe Casino, it very closely resembles the type of mix of people that I have seen at casinos in Downtown Las Vegas, the Boulder Highway casinos, and the Off-Strip casinos.  There is the expected mixture of affluence, youngish people there to show off (and possibly flaunt Daddy's money, in a few cases) and people who at least appear to be degenerate gamblers.  

Another statement that I have a problem with is that, "Local casinos are generally not destination resorts...an unimpressive hotel if any at all..."

While that statement is sometimes true, I find it intriguing that he opened up this Article relating his presence in the Cleveland area when the Horseshoe Casino was just about to open.  The reason that I find this to be a somewhat amusing choice is because the hotel with which that casino has an agreement and comps rooms for is one you may have heard of, namely, the Ritz-freaking-Carlton.  Most people are aware of the existence of this Four-Star hotel that, for Saturday 4/30/2016, has a rack rate of $283 for its most basic room.

In case I haven't made my point well enough, it's a pretty good hotel.  

In terms of the casino in Cleveland, which Grosjean admits that there are other things in the Downtown area but characterizes as, 'Still pathetic,' it warrants mentioning that the Horseshoe is located with an interior entrance (as has the Ritz-Carlton) in Tower City Center.  Tower City Center is essentially a mall that is home to any number of retailers, (a few upscale) eateries and office buildings.  Even prior to the addition of the casino, Tower City Center was a destination unto itself.  While Tower City Center does not have some of the extremely high-end retailers that it once had, that fact has almost nothing to do with the casino.

Grosjean also mentions that casinos can have a detrimental impact on other local businesses, such as restaurants, because the casinos have the competitive advantage of offering comped meals and making money off of visitors in other ways (i.e. the gambling) and other restaurants do not have the luxury of offering free dinners to everyone just for showing up because all they are is restaurants.  Ultimately, Grosjean states that it is difficult for local bars and restaurants to compete with the casinos as a result.

While that position seems to make sense on its face, if Grosjean really wanted to debate the point, I would find myself in a position of demanding strict numbers to back up his assertion.  I certainly do not have a problem with offering my own opinions or anyone else offering theirs, so people are obviously free to disagree with me and I will do my level best to successfully defend my assertions or concede the argument, but my Empirical experience has been either neutral or the opposite in this regard.

For example, why would Grosjean suggest that bars have difficulty competing with the casinos as a result of the ability of the casinos to offer drinks?  I think, at a minimum, that would vary greatly depending on the market.  For one thing, in the State of Ohio, casinos are not allowed to comp drinks and, as a best case scenario, the drink prices are only slightly higher at casino bars than stand-alone bars.  The casino may well attract drinkers who like to gamble, but they are not going to attract just drinkers.

Furthermore, bars are a more highly localized business than the casino.  In other words, even in smaller cities that have casinos, the casino is simply inconvenient as a destination for drinking unless someone either has a designated driver or is staying in the hotel associated with the casino in question.  Most people frequent their local watering hole because it is just that: local.  I would suggest that a high percentage of drinkers (and it should be 100%) would prefer not to drive while intoxicated, and as a result, would simply default to one of the bars closest to them that is either within walking distance or is a cheap cab fare.  

I do not have any numbers to support my experience in this area, and if Grosjean does have the statistics he did not cite them in his Article, but my Empirical experience with the way that bars and casinos relate to one another is that casinos have little to no impact on the bars.  A casino such as Wheeling Island Hotel-Casino Racetrack, for example, doesn't really have very many bars (aside from the Strip Club) within easy walking distance from it...but that's not because they closed as a result of the casino...it's because there never really were any bars right in that area.

As far as the restaurants are concerned, the comps that many casinos give are to their buffets, and I'd like to do a little bit of math for you right now, here is my equation:

Restaurant > Buffet

Other than fast food places, eating out at a restaurant is something of an experience with restaurants dishing out custom dishes, cooked-to-order, rather than a bunch of dry food that has been sitting under a heat lamp.  

Furthermore, Grosjean's assertion simply doesn't match my Empirical experience.  For example, the Rivers Casino located on the North Shore in Pittsburgh does not seem to have had an adverse impact on surrounding restaurants despite the fact that they offer one of the better casino buffets that I have been to as well as a few other eateries.  Additionally, Rivers is a mix of the affluent, the average and people on the lower end of the Socio-Economic totem pole.  In other words, it pretty much resembles most of the casinos that I have been to, including in Las Vegas.

If we take a look at the Meadows Casino in Washington, PA, the opposite of what Grosjean has suggested has occurred.  Instead, new hotels have opened in the immediate area of the casino, including a recently opened Hyatt Place that has a connecting walkway to the Meadows.  Furthermore, the immediate area continues to be home to a certain Tanger Outlets outlet mall making Racetrack Road a destination for shopping, dining and gambling.  

Did I mention bowling?  Meadows Casino also has bowling alleys.

Additionally, restaurants have OPENED in the immediate area since the Meadows Casino was opened, including a brand new and ever-popular Primanti Brothers location right near the casino.  They are also in the process of building what appears to be a somewhat upscale apartments or condo building near the casino.  
In other words, things are just fine and dandy on Racetrack Road.

With respect to Wheeling Island Hotel-Casino-Racetrack, ever since the slots and table games (the tables came much later) became fully legalized, there have been a few restaurants in the City of Wheeling to close their doors while a few of them have opened.  Interestingly enough, none of the restaurants that already existed in the area known as Wheeling Island (yes, it is an actual Island) have closed with popular staples such as Abbey's, Golden Chopsticks, KFC and Burger King still open for business and doing quite well.  The Island Coffee also serves food, but it is really more of a gambling parlor than a restaurant.

The two longest-existing restaurants to close in the Wheeling area during this time were the Italian restaurant La Bella Via (new ownership was ineffective) and Hoss's Steak & Sea, but both of those restaurants are located in the Elm Grove area which is about as far from the casino as you can get.

Speaking of places in the Wheeling area that are far from the casino, another good example is the Highlands shopping center which features a number of big name stores as well as no fewer than ten restaurants which opened in the last decade.  I do not believe that the success of the Highlands has anything to do with the casino, but I am bringing it up to emphasize the point that casinos are not necessarily detrimental to local restaurants.

To put it simply, if a casino comes into town and the free buffets from the casino result in so many fewer people coming into your restaurant than there used to be that you are forced to close, then I must conclude that your restaurant probably sucked.  The only way that I would eat at a casino buffet for a local casino (even if comped) is if I was not planning to go to a restaurant that day anyway.  I would only be eating at a casino buffet as a matter of convenience.  I suppose The Island is one exception if I have comped buffets, in that case, I would be inclined to hit a restaurant somewhere else in the Wheeling area and then go to the buffet later on for dessert...but that's because they have quite good desserts.

Finally, Grosjean suggests that gambling by the locals should be restricted in order for the money of the locals not to be sucked into the, 'Black Hole,' of the casinos coffers highlighting The Bahamas as an example.  With all due respect to Mr. Grosjean, his suggestion is patently absurd.  If there is an entertainment venue in town, and certainly a casino at least qualifies as an entertainment venue in its own right, then what right does he or anyone else have to suggest how people should spend their own money?

Personally, I would certainly be in favor of casinos somehow finding a way to take more comprehensive measures to find and eliminate problem gamblers, but to put a blanket restriction on locals playing in the casino seems, at best, Draconian.  That is basically like saying to the local population, "We believe that not a single one of you has the capacity to appreciate the casino as a source of entertainment at which you should only utilize disposable income, and as a result, we are prohibiting every single one of you from entering."

In my opinion, the casino should take even more responsibility in the arena of identifying and excluding gamblers who are likely to have a problem, but aside from that, I fail to see what authority regulatory bodies should have over what a person wishes to do with his or her own money.  Do some people get themselves in trouble as a result of problem gambling?  Absolutely.  Should we default to the conclusion that everyone living in a locality that has a casino will inevitably become a problem gambler?  Absolute nonsense.

Besides that, the vast majority of the States that do have legalized casino gambling also have legalized State Lotteries, so the suggestion that people should have to pass a financial, 'Means test,' of sorts just to enter a casino is also a patent absurdity.  In the casino, at least, people are playing for returns in the eighties-nineties of percents assuming they use Optimal Strategy.  

A comment by someone named Ron Reid said:

"To make the situation worse, there are few local casinos outside of Las Vegas that offer games that are consistently playable. In most places there simply isn’t enough competition to drive the casinos to compete. In places like Missouri, the wisdom of the legislature has been to actively limit competition by putting a cap on available casino licenses. Brilliant! As a result you don’t see anything playable in Kansas City."  

That is another load of complete hogwash, unless he is strictly referring to Advantage Play.  If he is not strictly referencing Advantage Play, (and some of the best opportunities in recent years have, in fact, taken place in casinos outside of Nevada) the State of Pennsylvania offers some of the best Blackjack Rules in the entire country, as a matter of State Regulation.  In terms of games with a House Edge of 2%, or under, which I would consider, 'Playable,' for someone who is playing recreationally, Craps is a playable game anywhere as long as a player sticks to the Pass/Don't Pass, Come/Don't Come and Placing the 6 & 8.  There are also other Table Games in which either the House Edge or Element of Risk is less than 2%, and furthermore, there are decent Video Poker pay schedules to be found around the country with less than a 1% House Edge.

Furthermore, since he wants to talk about casinos in the State of Missouri, and specifically, Kansas City...there is something in Kansas City that is very playable for anyone right now this minute who happens to live in the area.  That is true, at least, as of the time of this writing.

Furthermore, according to VPFree2 (which is sometimes dated, but you know that the games were at least at a given casino at one point in time):

http://www.vpfree2.com/casinos/by-region/mid-west.html

Three of the casinos in Kansas City, MO, have multiple Video Poker games that return in excess of 99% while one casino has two games that pay in excess of 98%, but 98.91% Airport Deuces is the best game at that one, the Isle of Capri Kansas City.  

When it comes to Grosjean's overall opinion of local casinos, with all due respect to an Advantage Player that I have a tremendous amount of admiration for, I think that his bias may be showing.  The guy simply hates casinos, in general, and he considers them a predatory business that garners its profits by preying on players who are weak both mentally and financially.  In my opinion, the end result of Grosjean's bias against casinos is that he is inclined to see all of the bad and none of the good.  

I want to make it clear that I do not believe that casinos are undying paragons devoted to the social good, they're absolutely not; (though some do make legitimate efforts to give back to the community)  what I do believe is that casinos are businesses that offer products/services that potential guests choose whether or not they want to avail themselves of.  Some people can get in too deep and end up in financial dire straits as a result, but I don't think that is a reason to suggest that the business model of the Locals Casino needs to cease to exist for the public good.  

To wit, there are people out there who are shopping addicts and such addiction causes them significant financial peril...should we close all of the stores?  Hell, the stores (unlike most casinos) are not forced to disseminate and have available hotline information for those that consider themselves problem shoppers.  While packs of cigarettes have had to have Surgeon General's Warnings on them for years now, I'm looking at a pack of Marlboro Blacks right now and nowhere on it do I see a, 'Quit Smoking Helpline.'  

Hell, there's even a bottle of Smirnoff Vodka (not mine) near me and nowhere on it do I see a hotline to call if the owner of the vodka feels that he or she may have a drinking problem.  I'll tell you a major difference between a casino and a bottle of vodka, someone can become inebriated off of that bottle of vodka, drive, and kill somebody as a result.  An individual may lose money that he couldn't afford to a slot machine, but I don't see anybody dying as a direct result.

Comments

mcallister3200
mcallister3200 Apr 30, 2016

You pretty much proved grosjeans point when you compared the clientele of HS cleveland to downtown and Boulder highway, those casinos bottom line is primarily pathetic degenerates as well. Your bias as an industry ball washer is just as apparent as JG's.

Mission146
Mission146 Apr 30, 2016

That's probably a fair point, I don't consider myself pro-casino, but neutral. I do think people should have the right to do whatever they like with their own money and think I made some other decent points pursuant to my overall position that casinos are not necessarily a negative for a locality.

I do hope I didn't come off like everything was all butterflies and rainbows, there are addicts and it is unfortunate. I just simply can't reach Grosjean's apparent conclusion about the net result of a casino presence.

ernestmiddle
ernestmiddle May 05, 2016

Grosjeans is a legend in his own mind.

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