Slots in Downtown Vegas

The decay in gaming revenue for the Downtown casinos began about 15 months before the recession began. It is now been going on over 5 years now.

Generally Boyd Gaming (the largest downtown operator) always states that higher fuel costs of impacted their Hawaiian Charters. Golden Nugget no longer reports since it is now privately owned. But their significant investment in downtown with no return hugely impact their S&P rating on their debt.

Overall in slots downtown is now not much different than any other region. Besides Las Vegas Club and El Cortez duking it out with their advertising war about having significantly looser slots than average, mostly the strategy has been to reduce the number of machines overall, and to only purchase penny and multi-denomination slots.

I have suggested that they should dedicate their $1, $5, and $25 slots to being loss leaders, and set them all at their lowest factory setting for house edge. Then advertise that fact. Hopefully the increased visitation will drive up table games and other sources of revenue. Since almost half of these machines are in the three Boyd properties, maybe Boyd could take that approach solo.

I have also suggested that a casino could consider becoming a "table game" only institution. Something to set them apart from the standard mix. I found few people on this forum who thought that would work.

Downtown has shown a positive change in 3 of the last 9 months after 27 straight months of negative change? But it certainly hasn't reversed the overall downward trend.

Will anything work?

Type	FY2011	FY2006	Change in $,000	Change in machines	Change in machines
Megabucks	$4,800	$9,256	$4,456	-34	-39%
$25	$1,405	$1,523	$118	-6	-27%
$5	$7,187	$13,981	$6,794	-118	-55%
$1	$43,284	$77,773	$34,489	-703	-43%
quarter	$59,576	$138,666	$79,090	-2,224	-56%
nickel	$14,716	$61,687	$46,971	-1,481	-70%
other	$6,161	$11,365	$5,204	-117	-43%
penny	$115,716	$67,007	$48,709	1,463	92%
multi-denom	$118,852	$103,707	$15,145	1,511	47%
all slots	$371,697	$484,965	$113,268	-1,709	-13%

Is the "Change in machines" the number of machines out there available to play and its respective percentage?

Quote: Alan

Is the "Change in machines" the number of machines out there available to play and its respective percentage?

"Change in machines" for penny slots means five years ago there was 1,597 penny slot machines and now there are 3,060 penny slots. So they have added 1,463 slots, and increased the number by 92%. The overall number of slots downtown were reduced.

Over the five years the money that used to be spent on nickel slots is now being spent on penny slots. While multi-denominational slots could replace quarter and dollar slots, the increase in revenue there is a fraction of what was lost.

Generally downtown has been dropping for 6 straight fiscal years. The strip only dropped for two years, but the recovery has been anemic. The strip is only 7% higher than it was 6 years ago. And billions have been invested over those years.

Begin	End	Downtown	Downtown	Strip	Strip
1-Jul-04	30-Jun-05	base	100.00%	base	100.00%
1-Jul-05	30-Jun-06	-1.80%	98.20%	14.57%	114.57%
1-Jul-06	30-Jun-07	-3.84%	94.43%	5.88%	121.31%
1-Jul-07	30-Jun-08	-0.37%	94.08%	-1.51%	119.47%
1-Jul-08	30-Jun-09	-11.77%	83.01%	-15.27%	101.23%
1-Jul-09	30-Jun-10	-7.99%	76.37%	-0.63%	100.59%
1-Jul-10	30-Jun-11	-2.29%	74.63%	7.01%	107.64%

Quote: pacomartin

The decay in gaming revenue for the Downtown casinos began about 15 months before the recession began. It is now been going on over 5 years now.

I question whether its a mere "decline" if it start fifteen months before everyone ran into trouble.
Now as to a table games only... maybe. I think however that the atmosphere of a casino requires variety and that variety has to include slots because too many couples have One Gambler and One Slot Player.

Once casinos start releasing slot percentages are we going to see the equivalent of "gas wards" between stations at the same intersection?

Casinos would prefer to compete on beer selections and atmosphere and the like, but those days may be over.

Quote: pacomartin

And billions have been invested over those years.

Yeah, somebody built a swim-through aquarium. Thats not an investment. Thats a gimmick.
If there were more sensible investments made, what did the do to bring tourists to Las Vegas or to bring locals to Downtown?

Quote: FleaStiff

If there were more sensible investments made

City Center cost more than an aquarium.

All of the table games Downtown also dropped over a five year period. But more revenue comes from slots.

Slots typically takes no brainpower to play, so no wonder it collects the most amount of $$. Drop coin(s), pull lever(or push button)..wait for outcome, repeat as necessary(or until broke). I would assume(ass) that most people(except for virgins) that play table games have some idea of what the house edge is and (hopefully) only bet the smart bets.

Quote: FleaStiff

Casinos would prefer to compete on beer selections and atmosphere and the like, but those days may be over.

Many decades ago one of the fast food companies ran an advertisement against a competitor saying they used seaweed in the milkshake. The problem is that milkshakes, along with a great many other products, contain a seaweed extract called carrageenan, which is used as a thickener and emulsifier. (It keeps the butterfat in the shake from separating out.) Carrageenan comes from Irish moss, a red, bushy seaweed that grows on coastal rocks near, among other places, Carragheen, Ireland, whence the name. (You can also find it in Maine, the Canadian maritimes, and various European localities.)

So the advertisement spawned a series of articles saying all the fast food companies used carrageenan, including the original company that started the advertisement.
The rule is don't advertise against your competitors in a way that hurts your product. It's an advertising rule that politicians seem to forget.

Now, not only will advertising house edges cut directly into the heart of revenue, it will constantly remind people that gambling faces a strict mathematical probability of loss. The house edge that most people prefer is zero.

Plus most people are unimpressed with saying that their competitors have a 5% house edge while you only have a 4% house edge. It is much easier to say that you are 20% looser than the average.

People will start figuring out what their diamond slot player status really costs, and is it worth the free burgers they are getting.

Quote: Alan

Slots typically takes no brainpower to play, so no wonder it collects the most amount of $$. Drop coin(s), pull lever(or push button)..wait for outcome, repeat as necessary(or until broke). I would assume(ass) that most people(except for virgins) that play table games have some idea of what the house edge is and (hopefully) only bet the smart bets.

While that may be true, I am thinking that if downtown Las Vegas makes loss leaders out of it's remaining $1, $5, and $10 machines, the kind of people who would be willing to travel to a place with low house edges on these machines might also be willing to play some table gamess.

The table games in downtown have all dropped in revenue over the last five years.

Game	2006	2011	Change	Change
TWENTY-ONE	$57,819	$41,739	-28%	-$16,080
CRAPS	$34,109	$28,923	-15%	-$5,186
SPORTS POOL	$5,172	$2,938	-43%	-$2,234
ROULETTE	$12,513	$10,333	-17%	-$2,180
KENO	$6,245	$4,256	-32%	-$1,989
RACE BOOK	$3,276	$1,386	-58%	-$1,890
3-CARD POKER	$10,447	$8,930	-15%	-$1,517
MINI-BACCARAT	$1,972	$507	-74%	-$1,465
PAI GOW POKER	$5,347	$4,008	-25%	-$1,339
LET IT RIDE	$6,163	$5,486	-11%	-$677
OTHER GAMES	$12,242	$6,123	-50%	-$6,119
TOTAL GAMES	$155,305	$114,629	-26%	-$40,676
POKER	$7,722	$4,993	-35%	-$2,729

Is there anyplace in US, other than Vegas, where Craps action is revenue is close to 70% that of blackjack ??

Quote: buzzpaff

Is there anyplace in US, other than Vegas, where Craps action is revenue is close to 70% that of blackjack ??

I doubt it. Remember those stats are for "Downtown Vegas". On the strip it is closer to 40%. Remember that Blackjack took a huge fall in the past few years.