LuckyPhow
LuckyPhow
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beachbumbabsGialmereAxelWolfRigondeaux
February 26th, 2019 at 7:54:40 AM permalink
According to this article, there is a "Vegas Strip Value Problem." The author, Jeff Hwang, identifies 3 components:

  • The ever-increasing Average Daily Rate (ADR) for hotel rooms, and how ADR understates true cost when resort fees, parking charges, and other "hidden" costs are included.
  • Casino efforts to increase the House Advantage (HA) on any and every gaming proposition, driving away gaming patrons who look for games with a lower HA.
  • Casinos truly believe gaming patrons won't notice the incremental HA changes that benefit the casinos. So, they pile on each little rule change, expecting none to be a game-changer individually, while ignoring the overall impact on play that so many gaming patons notice.


The Las Vegas Convention & Visitors Bureau (LCVB) reports 2018 was the second "down" year in total visitor volume, and was the first time it occurred when there was no national recession. Also, 2018 convention-visitor count was down for the first time in years. Hwang ties the data to the gripes and grumbles often expressed by WoV members.

The author marshals a variety of data to support his view, making the article a good read for anyone interested in the overall Vegas gaming market. My only criticism is the omission of the impact of the pro football stadium.
Ayecarumba
Ayecarumba
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February 26th, 2019 at 9:04:17 AM permalink
Interesting read L.P.! The lack of competition on the Strip has hurt consumers. Someone believes that bigger nightclubs and spas will be enough to fill the gap left by the gamblers who don't come to town anymore due to the higher fixed costs, and degrading gaming values.
Simplicity is the ultimate sophistication - Leonardo da Vinci
Steverinos
Steverinos
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February 26th, 2019 at 9:45:04 AM permalink
Great read! Thanks for the link.

Interesting that the author didn't even mention video poker pay tables.
oldbudman
oldbudman
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February 26th, 2019 at 9:55:29 AM permalink
Yes very interesting read and I to was wondering about no mention of VP. I also hope his take on the Downtown Revival towards the end of his column is true, but my instincts tell me after a few years of success, money greed will take over and Downtown will follow the way of the Strip. I hope not.
RS
RS
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February 26th, 2019 at 10:42:56 AM permalink
#3 is flawed. People simply don’t care about the house advantage. It’s also tough to realize the higher HE due to variance and poor play. If we’re going to take the stance that gamblers are rational thinkers, then why are they even gambling? Even if we said they’re somewhat rational, then why are they playing 10%+ HE side bets? They’re likes flies on s*** for side bets with huge house edges, but they’re gonna be snobs and not play because of a 1.39% addition to the base bet? No.

When the big players and whales play (the patrons who actually make money for the casino), they typically play in the HLR, where the negative rule changes aren’t as prevalent. And if they play some trash 6:5 game on the main floor, that’s just more money for the casino.
Ayecarumba
Ayecarumba
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February 26th, 2019 at 11:04:59 AM permalink
Quote: RS

#3 is flawed. People simply don’t care about the house advantage. It’s also tough to realize the higher HE due to variance and poor play. If we’re going to take the stance that gamblers are rational thinkers, then why are they even gambling? Even if we said they’re somewhat rational, then why are they playing 10%+ HE side bets? They’re likes flies on s*** for side bets with huge house edges, but they’re gonna be snobs and not play because of a 1.39% addition to the base bet? No.

When the big players and whales play (the patrons who actually make money for the casino), they typically play in the HLR, where the negative rule changes aren’t as prevalent. And if they play some trash 6:5 game on the main floor, that’s just more money for the casino.



I think the point of the article is that slaughtering the sheep is not a good long term strategy for the wool industry. Gaming revenue as a whole is down. Visitor numbers overall are down. Short term profits can be made with side bets with huge house edge's, but there is a long term cost in lower visitor numbers since there are less winners, and short, losing gaming sessions are nothing to talk up your friends in Poughdunk about.
Simplicity is the ultimate sophistication - Leonardo da Vinci
beachbumbabs
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beachbumbabs
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AyecarumbaHullabaloo
February 26th, 2019 at 11:28:05 AM permalink
Quote: RS

#3 is flawed. People simply don’t care about the house advantage. It’s also tough to realize the higher HE due to variance and poor play. If we’re going to take the stance that gamblers are rational thinkers, then why are they even gambling? Even if we said they’re somewhat rational, then why are they playing 10%+ HE side bets? They’re likes flies on s*** for side bets with huge house edges, but they’re gonna be snobs and not play because of a 1.39% addition to the base bet? No.

When the big players and whales play (the patrons who actually make money for the casino), they typically play in the HLR, where the negative rule changes aren’t as prevalent. And if they play some trash 6:5 game on the main floor, that’s just more money for the casino.



I think #3 has more merit than you're giving it. People are noticing that, where their $200 buy-in used to last them an hour, now they're lucky to play for 15 minutes. There have been many articles and conversations about how there's no longer a decent shot at winning.

When people would rather spend their $500 on a single bottle at a night club than playing with friends at a table, where they have free drinks, a seat, and a chance at the $500 not being gone at the end of the evening, at some level they've figured out they're suckers at the gaming table.

And $500 in a night is well beyond most gambler's means. But it's a drop in a Strip property's bucket, based on the table minimums and bad games they offer. Off-strip and DT properties have pointed out the difference on billboards and ads long enough that even the "idiot gambler" can see it. So they stay away, except to walk the Strip in huge numbers, and crowd places like Casino Royale (a dump IMO, but they do offer low minimums).

In whatever order, they blew up the cheap rooms, then raised the pricing on what's left, added the resort fees, started charging for parking, started metering the drink service, charging for lounge entry, removed snack buffets, got rid of cheap dining options, took away discretionary pit comps, raised table minimums, and shaved the game odds away from the player. It's a slow death spiral that's being actively rejected by most non-Strip places (notable exception AC, which SHOULD be serving as an object lesson to them as it dies).

I don't know why Stations or Boyd doesn't market even more actively to grab those players left behind. Or any of the other non mLife /non CET properties still on the Strip. I realize Wynn and Venetian think they don't need them, but the dozen or so others could really step it up in contrast. There's a huge volume market going under tapped, and an Old Vegas business model that worked for decades and can still work.
If the House lost every hand, they wouldn't deal the game.
billryan
billryan
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February 26th, 2019 at 12:41:38 PM permalink
The two corporations that control the strip are diversifying into entertainment empires. Rather than offer cheap entertainment and dining to gamblers, they now see all three as revenue sources. They are in a tricky position in that they are trying to anticipate what the next generation wants while catering to the many baby boomers as well. They can't afford to lose either group, but no one has found the happy medium yet. Millennials want afternoon day clubs and will drop $200 on an afternoon at the pool. Boomers want $5 blackjack and penny slots.
An obvious exaggeration, but it shows the diverse clientele casinos are marketing to.
Ayecarumba
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sodawater
February 26th, 2019 at 12:56:47 PM permalink
Quote: billryan

The two corporations that control the strip are diversifying into entertainment empires. Rather than offer cheap entertainment and dining to gamblers, they now see all three as revenue sources. They are in a tricky position in that they are trying to anticipate what the next generation wants while catering to the many baby boomers as well. They can't afford to lose either group, but no one has found the happy medium yet. Millennials want afternoon day clubs and will drop $200 on an afternoon at the pool. Boomers want $5 blackjack and penny slots.
An obvious exaggeration, but it shows the diverse clientele casinos are marketing to.



True, but does anyone in corporate realize that Millennials will not want afternoon day clubs and $200+ bottles forever? The excesses of youth will fade, but the grind of middle aged folks looking for a good slot deal is timeless. In a few years Millenials will feel old and awkward in a club full of their children. In fact, the generations coming behind the Millennials has already shown signs of rejecting their ascendants narcissistic ways.

So what will these former clubbers do when they get too old for the club scene?
Simplicity is the ultimate sophistication - Leonardo da Vinci
Lovecomps
Lovecomps
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February 26th, 2019 at 1:58:38 PM permalink
On the strip the casinos are pretty much owned by two companines so you don't have a lot of places to go and price whereas, downtown, most of the casinos have different owners. The exception is the D and Golden Gate, both of which are owned by Dereck Stevens. The rest are, more or less, single owner properties. The GN is actually owned by a resteraunt chain, Landrys. They need to stay as they are to compete with each other as well as the strip.

Since I started playing decades ago the emphasis has changed from the casinos to the clubs. The gambling is there, but since so many people are clubbing then they don't notice the not so subtle changes that have emerged. One of the best examples, for what it's worth, is SLS. 6:5 is everywhere on the strip unless you want to play at a $100 table (I've yet to see a triple 0 roultette wheel). You need to be betting black to get a DD game up there too. Also, the tradional games are also populated by silly side bets where the new gamblers don't even realize how bad the odds are.

The rooms are out of control because , in all fairness, they are fancy but, face it, unless you're in the suites uptown for the people who bet five and six figures a hand, a room is a room. Adding insult to injury, they charge those silly fees and high strip prices even when they are at 50% occupancy in the middle of the week of August.

This is one of the main reasons I've turned away from the strip. At the GN I get host who sets me up with a nice suite, limo, and full comps for my play. Just to compare, I sent my info to CET and they wrote back and told me that I didn't rate a host (basically don't call us, we'll call you).

The article doesn't say much about the revenue changes downtown, but I bet it's a driving force to send people down there, especially people like me who've been going for decades and find the whole concept of 6:5 laughable. There must be a lot of people, "non-idiots", who see it the same way.

Am I the only person who grew up as a strip snob but has left for good?
The best things in life are not free.

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