Future of slots
| Month | Strip | Downtown | Rest of Clark C. | Strip | Downtown | Rest of Clark C. |
|---|---|---|---|---|---|---|
| Jan 2004 | 57,439 | 15,571 | 61,945 | $122 | $84 | $91 |
| Jan 2008 | 49,823 | 12,370 | 66,483 | $192 | $105 | $118 |
| Jan 2011 | 49,258 | 11,623 | 65,686 | $156 | $89 | $95 |
It seems like during the boom years, the number of slots on the strip and downtown were reduced to make more room in the casino, but the return per machine went up. That may be because of more "high concept" slot machines and because of more penny machines. The exception is "rest of Clark County" which tends to open new casinos with very large slot floors.
Since the recession slots have been slightly reduced in number, but per machine return is returning to 2004 levels.
While it is not a shock that Excalibur is now 42% penny slots (the highest ratio on the strip), the nicer casinos like Wynn and Aria still have 500 penny machines, and Venetian/Palazzo has about 1000 (almost a third of their total). Planet Hollywood is the casino that least relies on penny slots (14.5%).
I haven't seen anyone try anything very radical here except for Hard Rock Casino. They have an extremely large number of table games for such a small casino, and a relatively small number of slot machines. Since they are now bankrupt, it may be related to this decision. But Hard Rock may have not been the best place to experiment with the standard mix.The overall return from this casino is much lower than average.
Despite the poor performance of the Hard Rock, I have suggested that a slot-free casino might be in the future but on the strip. Wynn Encore added 850 to the 2100 original Wynn slots but revenue for combined Wynn/Encore slots only went up very slightly. I thought maybe the Encore might go slot free so to give the casino a different feel, and without the noise be more appealing to table game players.
Do you foresee a re-imagining of the casino floor? I presume that gambling on mobile devices will continue to increase. Do you think the number of slots will be radically reduced in favor of more table games, and possibly places where you can sit with your friends and gamble with your iPad?
Quote: NicksGamingStuffI doubt you could ever gamble on your own device in a casino for fear of hacking, yet people do gamble on the internet casinos, so maybe my idea is wrong.
I have seen billboards outside of Venetian advertising gambling on your iPhone. It seems kind of pointless to me, on a street jam packed with the real deal.
A penny slot will always be a good way to spend your last $20 before your sad cab ride back to the airport.
Quote: NicksGamingStuffI doubt you could ever gamble on your own device in a casino for fear of hacking, yet people do gamble on the internet casinos, so maybe my idea is wrong. I dont know about a slot free casino, I do enjoy video poker and low denomination slots while I am taking a break from playing the tables. I work at a casino without slots (card room in CA) and they have these video game consoles (the same ones a lot of bars have) and a lot of the staff and customers seem to love playing these games. They are a quarter each but they pay no prize, but are glued to them the way people are to slots, it is interesting how people seek machine play in a gaming environment.
Nevada is permitting sports betting on blackberries. They also permit custom portable devices around the grounds of a casino. Sports bet is very popular, but you can also play some games like blackjack. I think there are now 4 casinos that have these personal devices.
Just as a High Limit Room is populated with those who enjoy being aloof and having a more quiet and dignified experience, there will be those who enjoy sitting in an alcove somewhere having a cocktail and a quiet chat with a companion while doing their gambling. Its sort of a virtual High Limit Room.
Sure there are slots only joints. I doubt there will be table games only joints though. Too many people come with spouses they have to "park" at the slot machines while they do serious gambling elsewhere. Besides, far off slot machines are part of the ambiance.
However, I would love it if they'd segregate them. Put slots in one room and tables in another.
And/or some slots in the table game room - but make them quiet! There's an experiment I'd love to see the results of!
I agree some are way too loud, though. There were some at the Rio that would scream "Instant Spin Winner!!" so loudly my sister would jump out of her skin, and I'd bet a few blue-hairs could have irregular heart rhythms as a result. They quieted those down, but they were in the Masquerade Village section which has the simultaneous music from two or three bars plus the occasional bevertainer performance, so the cacophany wasn't dimished much.
Penny slots eat up 3 bucks a spin and pay back a lower percentage than a dollar slot taking $3, so I'd expect to see more penny slots. The bonus rounds are fun but you've got to run in a significant amount of coin to reach them so you gamble more than you planned (at least my sister does!) The new carnival table games have high house edges but the dealers have to think about all the payouts and the players have to ask about the bets and rules and all of that slows down the money. You plug in a slot machine and it's good to go.
However I like the idea of slot that remembers you as a player, and the more you play the lower the edge becomes. There could even be some sort of jackpot progressive exclusive to you, or rewards for playing x number of games on x number of different machines, or rewards for playing 7 days a week, or 10,000 spins in a limited time period. The possibilities are literally endless, and there is more scope than any type of table game. We have multiple machines here that have 8 or 9 different games built into them, and I think thats pretty cool, so as long as a machine is free, you are able to play your favourite game.
Quote: WizardofEnglandI think we need slots to exist, as the profit from them often makes casinos a viable business. And the money the casino makes helps take the hit when an AP takes them for a large wedge.
However I like the idea of slot that remembers you as a player, and the more you play the lower the edge becomes. There could even be some sort of jackpot progressive exclusive to you, or rewards for playing x number of games on x number of different machines, or rewards for playing 7 days a week, or 10,000 spins in a limited time period. The possibilities are literally endless, and there is more scope than any type of table game. We have multiple machines here that have 8 or 9 different games built into them, and I think thats pretty cool, so as long as a machine is free, you are able to play your favourite game.
I wasn't aware that table games don't provide casinos with a profit.
Off-Strip casinos could easily survive with video-poker only on their floors. Almost every local plays it (even the ones who swear they don't) and it is the most addictive casino game ever invented. Every vp machine has an edge over every player at all times, and unless the player gets lucky most visits end up losers. No AP, even one who's created a 106% or whatever play out of a machine, ever has an edge over the casino for the short amount of time they go at it with their single-denomination/optimal play only methodology. It's a strategy that sells, but the only ones who benefit are the sellers and the casinos.
Quote: RobSingerI wasn't aware that table games don't provide casinos with a profit.
Where did I say that?
Quote: WizardofEnglandWhere did I say that?
"I think we need slots to exist, as the profit from them often makes casinos a viable business."
That's why I was perplexed. The statement seems to portray that the profits (or losses) from table games are not capable of sustaining a viable business.
Quote: RobSinger"I think we need slots to exist, as the profit from them often makes casinos a viable business."
That's why I was perplexed. The statement seems to portray that the profits (or losses) from table games are not capable of sustaining a viable business.
Maybe in your head it does....
I never said that, but if you look at profit per sq metre of floor space of table to a slot machine, the slots are way ahead.
Every casino needs slots, and thats why they have them.
Are they any casinos in Vegas that do not have slots?
There are a few 'casinos' here and abroad that have only slots, but none are just table games.
Quote: WizardofEnglandMaybe in your head it does....
I never said that, but if you look at profit per sq metre of floor space of table to a slot machine, the slots are way ahead.
Every casino needs slots, and thats why they have them.
Are they any casinos in Vegas that do not have slots?
There are a few 'casinos' here and abroad that have only slots, but none are just table games.
I can't figure if you get that I understand you didn't say "table games don't profit" and how you'd possibly conclude that my statement about portrayal could have come from anywhere other than inside my head.
I know of no casinos in Nevada that do not have slots. I know of casinos in Calif. that only have poker tables. I know of casinos in Sofia, Bg. & Almaty, Kz. that only have table games.
Now I'll take you back to Macau (Balboa casino and others) before Chinese takeover. I lived in HK for a few years so I went over when I had time to kill or visitors to entertain. The floor was only table games and there were up to 7 people standing behind each seat/spot waiting their turn. I counted at most 8 slot machines in the lobbies, and I've never seen anyone playing them.
I believe slots take in more profits but I also believe table games can sustain a casino just fine.
Quote: RobSingerI can't figure if you get that I understand you didn't say "table games don't profit" and how you'd possibly conclude that my statement about portrayal could have come from anywhere other than inside my head.
For two reasons:
1) He never said table games don't turn a profit
2) He did say the profit from slots makes the casinos a viable business.
I don't see how the second implies the first.
Quote: NareedFor two reasons:
1) He never said table games don't turn a profit
2) He did say the profit from slots makes the casinos a viable business.
I don't see how the second implies the first.
1) Back to the beginning for you. I said that, to me, he implied that table games don't turn a profit. I also reitterated that I understood he did not say that as fact.
2) He did say that. I added that profits from tables games make casinos a viable business. I also gave examples of ones that I know of.
1) & 2) are indeed related.
Quote: RobSinger1) & 2) are indeed related.
In what universe?
The statement "the profits from slots amke the casino a viable business" says nothing and implies nothing as far as table games go. It certainly does not imply there's no profit in table games.
As for casinos without slots, surely there are or have been some. That, again, proves nothing. Business models vary a great deal. Theaters showing live plays make more money from the box office than movie theaters. Different business models for businesses that are very similar.
Quote: NareedIn what universe?
The statement "the profits from slots amke the casino a viable business" says nothing and implies nothing as far as table games go. It certainly does not imply there's no profit in table games.
As for casinos without slots, surely there are or have been some. That, again, proves nothing. Business models vary a great deal. Theaters showing live plays make more money from the box office than movie theaters. Different business models for businesses that are very similar.
Mine. And I represent a good round healthy slice of common sense.
Do you remember WofE started his post with this: "I think we need slots to exist". It was an opinion. Saying that does imply he didn't think casinos could survive without slots, ie, casinos would cease to exist with table games only. The intent is very clear to me.
You seem irritated that I gave actual examples of casinos that survived without slots. Why? I have an opinion that differs from his. Business models vary greatly--thanks, I needed that.
Quote: RobSingerMine. And I represent a good round healthy slice of common sense.
At least you have a sense of humor.
Quote:Do you remember WofE started his post with this: "I think we need slots to exist". It was an opinion. Saying that does imply he didn't think casinos could survive without slots, ie, casinos would cease to exist with table games only. The intent is very clear to me.
Apparently it isn't. The statement says what it says. You drew the wrong inference. You know it's wrong as you've stated there are casinos that survive without slots, so you know that's possible.
Quote:You seem irritated that I gave actual examples of casinos that survived without slots. Why? I have an opinion that differs from his. Business models vary greatly--thanks, I needed that.
Apparently you did. if table games don't turn a profit, then there is no way to ahve a casino without slots, right? In fact, there's no need to have table games at all.
And please spare me the bit of disagreement being equal to anger or something like that. We've just got rid of your pal Jerry and his bff. We don't need a replacement.
This was years ago and it has probably gotten worse as slots have become even more profitable. Machine take dollars and spit out tickets, bye bye change girl, bye bye hard count team, bye bye coin wrapping machines, etc, And in smokeless environments bye bye
janitors in large numbers. To say nothing of personnel problems, vacation scheduling, etc. in the pits.
Slot machines do not belong to a union either LOL And of course the PARANOIA of counters!
Quote: buzzpaffAs a former blackjack dealer I can tell you it is always dreaded when your casino gets a new general manager. WHY ? Because the average one looks at the table games pits and started to calculate how much more profit can be generated per square foot with slots.
The thing is that even the dumbest country bumpkin can do the square footage calculation. However, the reduction in number of slot machines from 57K to 49K on the strip in 8 years indicates that you don't need one slot machine for every two visitors.
| Ceasars Properties | Slots | Tables | Rooms |
|---|---|---|---|
| Harrah’s Las Vegas | 1,410 | 100 | 2,530 |
| Flamingo Las Vegas | 1,270 | 130 | 3,460 |
| Imperial Palace | 790 | 60 | 2,640 |
| Bill’s Gamblin’ Hall & Saloon | 360 | 50 | 200 |
| Total | 3,830 | 340 | 8,830 |
A hypothetical Ceasar's manager knows that Imperial Palace and Bill's Gamblin' Hall were both bought for their land and were intended to be torn down when the company dreamed of competing with MGM Resorts. Now MGM is big money sink, and nobody is going to tear down any building. While it may be true that Bill's presently makes more money on it's 360 slots than it's 50 tables, the total take from the 3830 slots in this block has gone down dramatically in the last four years.
Would it work for Bill's to simply remove it's 360 slot machines and add more tables and have a property on the strip that offers something different? A place to play where you don't hear the artificial noise of slot machines all day.
You dodged the next part rather visibly. "I think we need slots to exist" absolutely implies that casinos would not exist, as opined by WofE, with table games only. And I believe that is wrong.
I gave examples of casinos that survived without slots. There are also plenty of examples across the US of casinos, ie bars, that do fine with just slots. Slots make more money but either scenario survives.
Quote: RobSingerNareed, I don't know what role you played in the Jerry thing,
I like to think I did my part.
Quote:I can only imagine you're doing that because you've resorted to obfuscating the meaning of what was actually communicated, and based upon what I really said, you're having trouble with it. And if you are interpreting a bit of disagreement being equivalent to anger of some sort while equating my verbage to something Jerry may have said, then that's in direct conflict to your opening statement advising that I have a sense of humor.
Wow. Do you know what projection means?
Look. All I said was you pulled the statement "table games make no profit" out of thin air, not by anything the Wizard of England said. That's it. If there's any obfuscation, anger at disagreements and whatever else it was you tried to say, it's all on your part.
I will repeat the advice I agve you before: we're glad to be free of your pal Jerry and his bff (that would be mkl whatver number he used), and we don't want someone to replace either of them. You've been posting reasonably until this point. Now you're insisting on re-writting the past, re-interpreting your interpretations, and all for a comment that is the opinion of one man.
If you want to do all that, go right ahead. I could care less.
Quote: pacomartinWould it work for Bill's to simply remove it's 360 slot machines and add more tables and have a property on the strip that offers something different? A place to play where you don't hear the artificial noise of slot machines all day.
Slots are attractive to a certain segment of the gambling population. Non-table game players who want to accompany their table game playing significant other, need a place to sit and play. Having a LV casino devoid of slots would make that property less attractive compared to the joints offering both slots and table games next door and across the street.
I suspect the places that do not have slots in the U.S. would add them if they could. The Native American gaming establishments are pulling billions from slots. Perhaps this has more to do with the decline in L.V. than any other factor (Well maybe the expansion of Dotty's too)?
Quote: Nareed
Look. All I said was you pulled the statement "table games make no profit" out of thin air, not by anything the Wizard of England said. That's it. If there's any obfuscation, anger at disagreements and whatever else it was you tried to say, it's all on your part.
I will repeat the advice I agve you before: we're glad to be free of your pal Jerry and his bff (that would be mkl whatver number he used), and we don't want someone to replace either of them. You've been posting reasonably until this point. Now you're insisting on re-writting the past, re-interpreting your interpretations, and all for a comment that is the opinion of one man.
If you want to do all that, go right ahead. I could care less.
When someone says we need slots to exist, what's that mean to you? To me he's implying that since table games are not needed to exist, you have to make a profit somewhere, and that's slots. It's the exact same thing as saying you need -EV vp machines to exist because +EV vp machines aren't. I know +EV vp machines actually do make good profits for casinos--less percentagewise but good dollarwise. I also know table games make a good profit for casinos. And that's why I questioned if he meant table games are not profitable.
As for Jerry, it seems to be you who are invoking him, not me, and all because I felt you were irritated by me providing solid examples of casinos that operate fine without slots. I don't consider you my advisor, and your opinion on how I've been posting is so noted. I do, however, have a professional background in writing, and I would like to point out to you, in what I've seen is the fine tradition of your pal and bff MKL, that it's "I COULDN'T care less".
You may enjoy the last input on this issue-within-a-thread if you so choose.
Quote: RobSingerI do, however, have a professional background in writing, and I would like to point out to you, in what I've seen is the fine tradition of your pal and bff MKL, that it's "I COULDN'T care less".
No, it isn't. I could care less. Not much less, but less. If I coudn't care less, I wouldn't post about it.
Here's some more advice: sometimes people say what they mean. I always do.
Quote: pacomartinWould it work for Bill's to simply remove it's 360 slot machines and add more tables and have a property on the strip that offers something different? A place to play where you don't hear the artificial noise of slot machines all day.
I would go there and try it out. The idea sounds quite refreshing, actually.
Quote: kpI would go there and try it out. The idea sounds quite refreshing, actually.
A good idea but probably not good for revenue. What they could try is turning all the volumes on the machines off.
Quote: RobSingerA good idea but probably not good for revenue. What they could try is turning all the volumes on the machines off.
Wheel of Fortune without the "WHEEL... OF... FORTUNE" crowd chant when someone hits the bonus spin?? Eerie. Casinos are not libraries. The clanging coins dropping in the "STEEL" bowls, flashing lights, and go go music, are all designed to excite the senses. Take away the audio from the machines, and people will think, "dead" which equals "unlucky", a close cousin of "tight". If anything, machines are getting louder to compensate for the lack of sound generated by coins dropping into steel bowls.
Quote: WizardofEnglandI think we need slots to exist, as the profit from them often makes casinos a viable business.
If the profit from slot machines makes casinos a "viable business", then the lack of slot machines would mean that casinos would not be "viable businesses" I don't usually agree with RobSinger, but logically the statement makes no sense if not interpreted it the way he did.
RobSinger wins this argument.
I think we need slots to exist, as the profit from them often makes casinos a viable business.
I agree. If you disagree name one casino that has the opinion of slots and tables games and offers only table games.
This is a plethera of casino' that are slots only !
Does that mean table games are not profitable? Of course not. They turn a GROSS profit. However, without additional GROSS profit from the slots, there may be no NET profit - particularly these days.
I think that's what Wiz of England was trying to say.
For the record, slots, originally, were something of a novelty. Placed there to be played in passing. The original concept was not to turn people into zombies, constantly feeding the machines.
Heck, it wasn't too long ago that casinos didn't even provide chairs for slots!
Quote: buzzpaffIf you disagree name one casino that has the opinion of slots and tables games and offers only table games.
This is a plethera of casino' that are slots only !
There are none that I know about. It is very clear that slots are the dominant form of gaming in America.
In Nevada outside of the strip 83% of gaming revenue comes from slots. But inside the strip in the 23 top casinos that percentage is down to 46%. The machines are only going to get more visual, with better and better sound systems.
In 1975, on the Strip, 80% of the gaming revenue came from the pit, 18% from slots, and 2% came from poker. The invention of virtual reels and patenting in 1982 that allowed slot machines to make high payouts changed the balance in favor of the slot machine. With real dice, balls and cards you know how hard it is to get boxcars and get a 30:1 payout. Now slot machines could regularly payout hundreds of times and the player is wrapped up in his delusion because he can't see the mechanism .
We are unlikely to go back to that ratio, but the recession and the plethora of slots around the country has returned pit revenue to the majority position on the Vegas strip.
The question was are we ready to see a single casino offer something different and leave out the slot machine entirely. The example of Bill's Gaming Hall was chosen because the same company owns all the other casinos surrounding that property. If the players choose to leave to play slots, they will still end up in a Ceasar's property. But would players appreciate having some place to go without slots.
I know that I have been playing craps, and I wanted to turn around and pull the irritating slot machine behind me out of the wall.
I actually had to teach fellow bus passengers, usually Polish ladies from Dundalk Maryland how to play $1 blackjack so they could spend some time off their feet from playing slots. For first few years AC was open, you had to be at table games to get free drinks.
Now plush chairs, bells and whistles, drinks , better comps, etc at slots. BJ SD pays 6-5, dealer hits S17, 7 players crammed at tighter tables, rude dealers ( not you Dan OK ), and comps almost nonexistent at lower limits.
OH HOW THE MIGHTY HAVE FALLEN The answer : THIRD BASE
Yes. Its the image thing. A TV comic might say "roll the bones" and many people would know what he meant, he might say "hit me" or "split 8s" and many would know what he was talking about, but One Armed Bandit is a universally understood term even though the machines no longer have any arms at all.Quote: pacomartin]It is very clear that slots are the dominant form of gaming in America.
Casinos offer free lessons for craps and other table games. I've never heard of free lessons for learning how to play a slot machine. Its the introductory gamble for zillions and it is for many a permanent "hook". You can have alot of cutesy definitions. A slot machine is a device for putting your pension check into someone else's pocket. Or whatever. Its unlikely the casino will ever have a bus disgorge a zillion craps players, but daily buses disgorge all these slot players. Slots and Bingo. Mindless and simple. So yes, of course its the dominant form of gambling. It used to be Faro, then craps, then ... who knows, but it sure is "slots" now.
>I wanted to turn around and pull the irritating slot machine behind me out of the wall.
Yeah, slot machines and organ music. Two of the worst things in a casino.
A long time ago my 1st sargent from Biloxi Mississippi told me all I needed to know about slots.
" never mess with somebody who will put his back to a wall and take one the world with just
one arm "
Quote: DJTeddyBearSlots are not needed, but they are highly profitable. And the profits from the slots may have helped some casinos stay afloat during hard economic times.
Does that mean table games are not profitable? Of course not. They turn a GROSS profit. However, without additional GROSS profit from the slots, there may be no NET profit - particularly these days.
I think that's what Wiz of England was trying to say.
That was exactly my point! I think Jerry, sorry I mean Rob just misunderstood it in his typical Jerry way.
Oops I mean Rob. Sorry about that, I have no idea why I confuse the two of you....
Oh wait...
Quote: WizardofEnglandThat was exactly my point! I think Jerry, sorry I mean Rob just misunderstood it in his typical Jerry way.
Oops I mean Rob. Sorry about that, I have no idea why I confuse the two of you....
Oh wait...
I believe if you had answered my original question instead of acting guilty and basically admitting that you were unclear, you wouldn't have had Nareed come on doing his injured Steve Nash portrayal, and then DJTeddyBear wouldn't have had to restructure your post in a way that makes sense. As a result, instead of trying to finalize this and end it, you choose to attack me with Jerry accusations. Am I supposed to now feel bad?
Quote: RobSingerI believe if you had answered my original question instead of acting guilty and basically admitting that you were unclear, you wouldn't have had Nareed come on doing his injured Steve Nash portrayal, and then DJTeddyBear wouldn't have had to restructure your post in a way that makes sense. As a result, instead of trying to finalize this and end it, you choose to attack me with Jerry accusations. Am I supposed to now feel bad?
If you hadn't of commented at all, none of this would of happened. Everything happens for a reason Jerry.
You just like an argument.
Quote: WizardofEnglandIf you hadn't of commented at all, none of this would of happened. Everything happens for a reason Jerry.
You just like an argument.
Guess what--you're not clear in what you write 100% of the time everywhere, and since I've written several columns on the profitability of slots vs. tables games in the past decade, there was nothing wrong with my making a comment. And "this" isn't the end of the world either. If you want to think of me as Jerry, who is about 1/5 intelligent as am I, be my guest. I'm just surprised you didn't say anything to Nareed when he tried so hard to spin his excuse of why he made a grammar error.
Quote: RobSingerGuess what--you're not clear in what you write 100% of the time everywhere, and since I've written several columns on the profitability of slots vs. tables games in the past decade, there was nothing wrong with my making a comment. And "this" isn't the end of the world either. If you want to think of me as Jerry, who is about 1/5 intelligent as am I, be my guest. I'm just surprised you didn't say anything to Nareed when he tried so hard to spin his excuse of why he made a grammar error.
I couldn't give a flying monkeys about someone's grammar error. Guess what? there are more important things in life Jerry.
Quote: WizardofEnglandI couldn't give a flying monkeys about someone's grammar error. Guess what? there are more important things in life Jerry.
If you want to continue to insult me by calling me Jerry when my pen name & real name is Rob, from what I've read about forum policy, that's cause for suspension. It's rather silly, sure. But I have not been disrespectful at any time towards you so I would expect the same in return.
Rob has a point.
While I too feel that Jerry is still here, I don't think he's Rob. And even if he is, so what?
This is how flame wars start, and flame wars are the detriment of an otherwise great forum. It's been great here since JL was banished. Let's try to keep it that way.
Quote: RobSingerIf you want to continue to insult me by calling me Jerry when my pen name & real name is Rob, from what I've read about forum policy, that's cause for suspension. It's rather silly, sure. But I have not been disrespectful at any time towards you so I would expect the same in return.
Whatever
Quote: RobSingerI believe if you had answered my original question instead of acting guilty [etc, etc, etc]
I guess you're one of those poeple who will play with matches until he gets burned, then turn to the first available person and say "Look what you made me do!"
Or is it inconceivable to ask for clarification when you don't quite udnerstand something?
Ok, I do have a question.
If something makes a gross profit, but not a net profit, doesn't that mean it's not actually making the business money. I'm not a financial wizard, so can someone please explain it to me.
Does it mean like "This blackjack table makes us $5 an hour. However, the dealer makes $3 an hour, and it needs supervision and electricity and cards and other expenses to work. So actually the costs to operate the table is $8 an hour." Because that would mean that table is losing money. Am I interpreting this incorrectly?
Quote: FinsRuleStop attacking Rob. Just because his name is RobSinger, doesn't mean that everything he does/says means he's being a jerk.
Ok, I do have a question.
If something makes a gross profit, but not a net profit, doesn't that mean it's not actually making the business money. I'm not a financial wizard, so can someone please explain it to me.
Does it mean like "This blackjack table makes us $5 an hour. However, the dealer makes $3 an hour, and it needs supervision and electricity and cards and other expenses to work. So actually the costs to operate the table is $8 an hour." Because that would mean that table is losing money. Am I interpreting this incorrectly?
That's the difference between revenues (a.k.a. "win" in the gaming world) and operating profits (a.k.a. "EBIT" in the gaming world). Gross profit would be in the middle, between revenue and operating profit, but there aren't any costs of goods sold (COGS) in gaming -- they aren't selling goods at all.
Actually, most casinos use "EBITDA", or "Earnings before Interest, Taxes, Depreciation, and Amortization". There are a lot of accounting factors in there, but the big ones Profits are after subtracting expenses like overhead and labor.
You can find the most recent revenue (win) numbers on the NGCB website. I did a ballpark and estimated that the average gaming table in NV makes about $64k/month. That's revenue. And that includes games like Bingo, which make no money (in Nevada, anyway). So if the average cost to operate a gaming table is less than $64k/month, including labor and maintenance costs, then the table has an operating profit.
The real question is whether the operating profit or EBITDA from tables can sustain a modern casino. I think that will depend on the casino floor, the player base, the number of rooms, the debt load, etc. It may not be possible to run a profitable casino by *removing* 2000 slot cabinets and turning the rest of the gaming floor into a nightclub, but that's a different calculus than designing a new casino's operating model and architecture by planning on just table games. I have a book in my library called simply "Casinos" (Vendome press) which shows historical pictures of European casinos and gaming halls, and there were plenty of profitable casinos long before the invention of slot machines. WizardOfEngland's comment was directed toward whether table games are sufficiently profitable to do that now.
All of that is an entirely different question than whether traditional table games like blackjack or baccarat are profitable at all. Of course they are. To my knowledge, the only game in Nevada that's not independently profitable is bingo (which is classed under table games), and a primary reason that's offered is to get players in the door so they'll play slots between bingo sessions.
You ARE interpreting it correctly. However, if things were so bad that the bean counters could show that individual tables were running at a loss, the casino wouldn't have the table, or they'd change the hours, or odds, or something.
The reality is, when the table is running, the table does make a gross profit. By that I mean it takes in more than it pays out. It should even make a net profit once you factor in the salaries for the dealer and part of the pit boss. But once you start to factor in all the other stuff, like it's portion of everything from the mortgage down to the electricity for the sign out front, then it becomes questionable.
And maybe on that grand scale the table doesn't make a profit. But would there be as many slot players if there were no tables? Probably not, therefore, the tables stay.
For what it's worth, a financial wizard (aka Spin Doctor) can make a business on the verge of bankruptcy sound like a Fortune 500 joint.
I also believe that the ratio of slot revenue to table revenue is much lower on the strip compared to the rest of the nation because of the high rollers it attracts (and the high rollers are playing table games). The rest of the nation attracts fleas. Those with money go to Vegas, AC, Foxwoods/Mohegan Sun or Macau/Singapore/MonteCarlo.
When it comes to Gross Profit, it is simply Sales less cost of goods sold or direct expenses. Those direct expenses are items that you could apply directly to the table. But let's take the grocery store for example. You buy milk for $4 / gallon. The store gets it for $3.50 and pays 5 cents of freight. The "gross profit" on that item is .45 cents. All of the other expenses that the store has (the employee, the lights, the heat, the administrative expenses, the franchise fee, the rent) are all "indirect" expenses and might add up to .40 cents on that gallon of milk. The profit that you have after all of these is "net profit" (a nickel). Corporations also have expenses that are outside of "net profit" such as items that are not related to operations, such as stock revaluations.
For a casino then, the gross profit on a table game or slot machine would be its hold. The net profit would be everything else (payroll, utilities, depreciation, taxes) to keep the building going. To figure out what the "net profit" is on each machine requires an allocation model that would take all of the expenses and attempt to attribute each type of expense to each individual gaming unit. In my work, I see that all the time where an allocation for IT expenses might be pooled within the IT department and then allocated out to each profit center.
In my opinion, because of the massive overhead required to operate a casino, a "net" profitable casino would need slot machines in order to survive. If a casino were to go to an "all table" format, it had better offer a better experience in terms of service than anything else out there. I think it would be difficult to offer successfully due to demographics. Couples like to play in the same casino and couples typically like a different mix of games. Is it doable? Why certainly, Rob has given examples. Is it viable on the strip in its current 5 mega-corporation format? Why bother trying? Casinos make more money with slots on the floor, and the goal of the corporation is to make money.
Quote: boymimboIn my opinion, because of the massive overhead required to operate a casino, a "net" profitable casino would need slot machines in order to survive. If a casino were to go to an "all table" format, it had better offer a better experience in terms of service than anything else out there.
I admit the fantasy of an all-table casino is nice. But it's also unnecessary.
Just about any casino on the Strip could, if it chose to, remodel the floor in order to have the tables well away from the slots. The fact that none have done so shows that either 1) there's not enough demand for a slot-free area and/or 2) remodeling would be more trouble than it's worth.
I went to a casino in monterrey, Mexico, called Casino Revolucion which essentially kept its "table" games in a separate room from the slots. of course, these are electronic table games, without dealers or chips and using all-electronic interfaces. But there was not a single slot machine there.
