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pacomartin
pacomartin
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January 14th, 2010 at 12:44:39 PM permalink
Since October of 2007 in Las Vegas not all games crashed in the same amount.
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Blackjack plunged more than any other game, and much more than slots. For the last posting (end of November 2009), blackjack revenue in the state of Nevada was just over $1 billion for the preceding 12 months. The last time it was that low was in 1997 (almost 12 years earlier). Since 2008 baccarat has displaced blackjack as the dominant pit game. Blackjack has been on top for decades. In general gaming revenue is back to levels of 5 years ago.
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I think something happened. It is some combination of the following:
(1) baccarat players have more money
(2) baccarat appeals to foreign players (especially Asians)
(3) blackjack is not as encouraged by the casinos because they shut down a lot of tables
(4) blackjack has been debased by casinos with rules such as 6:5 payouts. Although this increases the house edge, it turns off people and they play much less.
(5) the depression has increased competition with other states, most of which offer blackjack and slots. Baccarat is only available in a few places in the country like the high end casinos on the strip, and possibly Foxwoods casino in connecticut.

Baccarat has already returned to the pre-recession levels. Everything else is still plunging. I think that this has serious long term consequences for Vegas. I don't think you can build large scale future growth on the handful of very rich players who like to play baccarat. Even today there are 14 blackjack tables for every baccarat table. Meat and potato players will still at home and go to their local club or slot parlor or Indian casino instead of flying to Vegas.

Investors who bought "The Sahara" and "The stratosphere" and "Golden Nugget" have lost tons of money. Harrah's mostly has the old casinos in vegas, with only Ceasars having high end baccarat tables. The Tropicana is just coming out of bankruptcy. Herbst gaming, and Station casinos are both in bankruptcy. Downtown vegas is now at gaming revenues not seen since 1988.

I am thinking that Vegas may never recover except for the high end. If blackjack is back 12 years, and slots are back 6 years, and most pit games are back 5 years, then it may take forever to recover. Wynn, Venetian, Ceasars, Bellagio, Mandalay Bay, and Aria will cater to the baccarat players. I think that the rest will continue to slide.

It is sort of like Reno which will probably never hit new highs again. They haven't built a new casino since 1995, and many of the old ones are being converted to other uses (like condos). Meanwhile the Indians continually build new casinos in the Sacramento area where people can go for day trips from the urban areas.

What do you think?
Last edited by: pacomartin on Feb 15, 2010
DJTeddyBear
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January 14th, 2010 at 1:19:35 PM permalink
The biggest problem Vegas faces (A.C. as well for that matter) is competition.

If you looked at NATIONWIDE gaming revenue at locations open for more than 12 months, I'm sure you'll see an increase since last year. Ditto for a any time span you choose.



Quote: pacomartin

Baccarat is only available in a few places in the country like the high end casinos on the strip, and possibly Foxwoods casino in connecticut.

It's also at Mohegan Sun, as well as at several locations in A.C. - although I'm not sure if it's just Mini Baccarat or the full size dogbone tables.
I invented a few casino games. Info: http://www.DaveMillerGaming.com/ 覧覧覧覧覧覧覧覧覧覧覧覧覧覧覧覧覧覧 Superstitions are silly, childish, irrational rituals, born out of fear of the unknown. But how much does it cost to knock on wood? 😁
pacomartin
pacomartin
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January 14th, 2010 at 1:59:03 PM permalink
I should say that really what is missing is the baccarat lifestyle. Baccarat tables on the strip make over $5 million per table (per year) in revenue. There are baccarat tables in other locations in Vegas (like Hard Rock and some of the nicer local casinos). But they pull in something like $1 million per year. Many of the smaller casinos now offer mini-baccarat.
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Hard Rock has a fancy casino with lots of table games (including 4 baccarat tables) but they only make $50 million a year on the casino. Many local casinos with a bunch of slot machines and a dozen tables make much more than that. Hard Rock just doesn't have the appeal to big time gamblers. They get a lot of kids who are happy to drop several hundred on dinner in expensive restaurants or in the bar and for concerts. They just opened an all-suite hotel tower hoping to appeal to some big time gamblers.
AZDuffman
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January 14th, 2010 at 2:29:24 PM permalink
Quote: pacomartin

As most everyone on the planet knows, gaming revenue in Vegas has crashed since October of 2007 when the depression began. However, not all games crashed in the same amount.
============
Blackjack plunged more than any other game, and much more than slots. For the last posting (end of November 2009), blackjack revenue in the state of Nevada was just over $1 billion for the preceding 12 months. The last time it was that low was in 1997 (almost 12 years earlier). Since 2008 baccarat has displaced blackjack as the dominant pit game. Blackjack has been on top for decades. In general gaming revenue is back to levels of 5 years ago.
=============
I think something happened. It is some combination of the following:
(1) baccarat players have more money
(2) baccarat appeals to foreign players (especially Asians)
(3) blackjack is not as encouraged by the casinos because they shut down a lot of tables
(4) blackjack has been debased by casinos with rules such as 6:5 payouts. Although this increases the house edge, it turns off people and they play much less.
(5) the depression has increased competition with other states, most of which offer blackjack and slots. Baccarat is only available in a few places in the country like the high end casinos on the strip, and possibly Foxwoods casino in connecticut.

Baccarat has already returned to the pre-recession levels. Everything else is still plunging. I think that this has serious long term consequences for Vegas. I don't think you can build large scale future growth on the handful of very rich players who like to play baccarat. Even today there are 14 blackjack tables for every baccarat table. Meat and potato players will still at home and go to their local club or slot parlor or Indian casino instead of flying to Vegas.

Investors who bought "The Sahara" and "The stratosphere" and "Golden Nugget" have lost tons of money. Harrah's mostly has the old casinos in vegas, with only Ceasars having high end baccarat tables. The Tropicana is just coming out of bankruptcy. Herbst gaming, and Station casinos are both in bankruptcy. Downtown vegas is now at gaming revenues not seen since 1988.

I am thinking that Vegas may never recover except for the high end. If blackjack is back 12 years, and slots are back 6 years, and most pit games are back 5 years, then it may take forever to recover. Wynn, Venetian, Ceasars, Bellagio, Mandalay Bay, and Aria will cater to the baccarat players. I think that the rest will continue to slide.

It is sort of like Reno which will probably never hit new highs again. They haven't built a new casino since 1995, and many of the old ones are being converted to other uses (like condos). Meanwhile the Indians continually build new casinos in the Sacramento area where people can go for day trips from the urban areas.

What do you think?




I think BJ will recover at some point as not every casino can survive by chasing the high-end Asian Player. Put me in charge of a property and I'll double the BJ drop in 18 months. How would I do this?

1. Open tables at reasonable limits. A $10 player is more profitable than 2 $5 players but ZERO $25 players are less profitable than a $3 player. We probably can't go back to $1 tables but I'd open as many tables as I could and at limits that keep them full.

2. More fair rules. Out with the 6:5 nonsense. If you hire me there will be a sign outside and every billboard I can buy saying, "IF IT DOESN'T PAY 3:2 IT SHOULDN'T BE CALLED BLACKJACK!" Today's gambler is not totally stupid as years ago. They read books and websites. They know.

3. Friendly and helpful dealers. Get off the "hands per hour" and get dealers who make it fun. And if you hear "WINNER WINNER CHICKEN DINNER" so much the better. Heck, maybe even give a chicken dinner for a suited BJ? People go to a casino for FUN, give them what they want.

4. Add a "progressive" side bet. You win a hand you put the unit on a side bet (think "lucky ladies" type side bets.) eg: you start at $10 and win, so you put the $10 winnings on the side bet. Then you win $10 + 10 and put a second $10 side bet for $30 in play. Give a 2:1 bonus for if you get to 10 hands in a row. Thus $110 in play you get $220 in winnings. All that action will get some takers you can bet (no pun intended.)

5. Let dealers choose to "go for their own" tips. That will bump the service level.

6. Realize that Vegas was built on the $10 player and not the whale who will kill you on comps and "rebates." Encourage pit bosses to give a "discretionary" comp, heck even require a few. Have the attitude "ANYTHING CAN HAPPEN" like on the "Las Vegas" TV Show. Not cars, but a free dinner for someone who has been playing an hour or so (and is up, preferably.) "Hello sir, I'm a pit-boss. I like your play? Can I offer you a dinner?"

Note almost everything here follows the cardinal rule: "Keep them playing and keep them coming back. The more they play the more they lose. In the end we get it all."
All animals are equal, but some are more equal than others
pacomartin
pacomartin
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January 14th, 2010 at 3:12:23 PM permalink
See I think that there might be something to what you say. Tony Marnell III just opened up the "M resort" in Vegas. Two decades ago his father opened the Rio before he sold it to Harrah's. Harrah's is the king of 6:5 blackjack. Tony is going to offer some small food comps at M resort even if the player doesn't ask for them (and without charging a player's card). He is trying to re-create the "high touch" atmosphere of decades ago.
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They tell me that in the early 90's you could play table games downtown for a quarter. When they let you play table games for a quarter the revenue was much higher than it is today. There was a type of whale that used to like to wade into a crowded game of small players and throw down huge bets. But people liked the crowded atmosphere. Nowadays those whales are all off by themselves playing with other whales or alone.
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I am surprised by the depth of the drop in blackjack. They were pulling in almost $1.5 billion in October 2007, and now it's dropped to $1 billion only two years later (1997 levels). That is far worse than other games. There is stuff happening that is over and above the recession. It's almost like the casinos would rather you play slots so they don't have to worry about payroll.
gambler
gambler
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January 14th, 2010 at 3:19:06 PM permalink
How much does it cost to keep a blackjack table open per hour?

Follow up question, can a casino afford to keep open a $5 minimum table with good player value (i.e. 0.26% house edge with perfect basic strategy). After all, most players don't play perfectly, but I would think that a full table at the $5 level would make more money then an empty $100 table.
pacomartin
pacomartin
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January 14th, 2010 at 3:50:51 PM permalink
I don't know how much it costs to keep a table open. I am sure it is a closely guarded secret. The new thing in Vegas is to having dancing girls by the blackjack tables, which has to cost something. I know that there are fewer blackjack tables now then there used to be because the casinos prefer newer games with higher edges. But the problem is every game (except blackjack) is going downhill. If blackjack were going down but slots were going up I would think the casinos would be making more money.
Last edited by: pacomartin on Feb 6, 2010
DorothyGale
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January 14th, 2010 at 4:26:25 PM permalink
Quote: pacomartin

gaming revenue in Vegas has crashed since October of 2007 when the depression began. However, not all games crashed in the same amount.

Blackjack plunged more than any other game, and much more than slots. For the last posting (end of November 2009), blackjack revenue in the state of Nevada was just over $1 billion for the preceding 12 months. The last time it was that low was in 1997 (almost 12 years earlier). Since 2008 baccarat has displaced blackjack as the dominant pit game. Blackjack has been on top for decades. In general gaming revenue is back to levels of 5 years ago.



First of all, could you decrease the size of your image so that this page is not distorted? Thanks.

Good job collecting data, but it isn't the right data to draw your conclusions. You need to look at all the historical data that's available and normalize it. Here's a bit.

There were 187 carnival (non-traditional) game tables in 1990, 617 in 1999 and 955 in 2009. Carnival games are games like Pai Gow Poker, Caribbean Stud and so on. In the same time blackjack went from 3470 tables in 1990 to 3778 tables in 1999, to 3144 in 2009. To say blackjack has been on top for decades overlooks the lack of competition by non-traditional games.

Baccarat went from 71 tables in 1990 to 115 tables in 1999 to 231 tables in 2009. It's still a small player as far as the total number of tables. Three Card Poker currently has more tables in Nevada than baccarat. Also, agressive marketing to Asia has driven the growth of both bacarrat and Pai Gow Poker.

People are not leaving blackjack because of 6/5. People are playing more blackjack because of 6/5. The game of 6/5 is offering a price-point that allows casinos to offer low-limit games, drawing in players who can't afford a $25 minimum, for example. Harrah's, in particular, offers 6/5 specifically because of its broad ability to attract players, and develop them to play at higher limits. Without 6/5, there would be much less blackjack in Nevada.

Revenue is not a good indicator of market movement. It is driven by too many intabibles that can't be normalized out. Total tables (or percent tables) is a much better indicator of the growth or decline of market segements. In 1990, 3.85% of tables were carnival games. In 1999, 10.89% of tables were carnival games. In 2009, 17.36% of tables were carnival games. Now, that's a trend!

Another trend is seen through these numbers: there were 5667 tables for table games in 1999 and 5501 tables in 2009. That's a decrease in total tables for table games, in spite of the incredible growth of gaming space in Nevada during that period. The easy conclusion here is that the trend is for there to be fewer table games per casino (the space is being allocated to slots), and for more of these games to be carnival games. The market has spoken.

--Dorothy
"Who would have thought a good little girl like you could destroy my beautiful wickedness!"
pacomartin
pacomartin
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January 14th, 2010 at 4:58:21 PM permalink
I'm not sure how to decrease the size of the image. I made it in excel, used Gimp to turn it into PNG file, and uploaded into Wikimedia Commons. For this forum I used the IMG to refer to the location in Wikimedia. Perhaps the administrator could help me out here,

======================

Dorothy, I respect your analysis. But I was trying to figure out where the decreases are coming. Part of the decrease in BJ revenue is the elimination of BJ tables. We've known for some time that the casinos would like to de-emphasize blackjack since it has such a low house edge and it is expensive to operate. Roulette and Craps have higher house edges (depending on how you play) and most carnival games have much higher edges.

But the per machine or per table analysis sometimes loses the big picture. Penny machines have very high house edges, but who is to say how many people are being lured from machines where they will play more. While revenue from penny slots keeps going up and up, the total revenue from slots is plummeting.
Wizard
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Wizard
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January 14th, 2010 at 7:22:15 PM permalink
In my opinion, the market share of blackjack will continue to go down. I would attribute the decline to:

1. Hard times in Vegas overall.
2. Players are making fewer mistakes.
3. Popularity of new poker-based games.
4. Every game has a lifespan, and I put blackjack's age at about 55.

On another topic, I find financial charts that don't start at zero on the vertical axis to be a bit dishonest. The one posted makes the blackjack and "rest of pit" drops to look more catastrophic that they really are.
It's not whether you win or lose; it's whether or not you had a good bet.

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