Casino Business Model

Lets pretend there are no casinos and you have to
write a business model for one to get a loan from a
bank. What would your proposal look like. Mine is
probably easy to guess.

Here's the definition of a business model:

"A business model describes the rationale of how an organization creates, delivers, and captures value"

Good luck making a casino fit in those traditional
parameters.

Sorry but casinos came before banks.

Quote: EvenBob

Lets pretend there are no casinos and you have to
write a business model for one to get a loan from a
bank. What would your proposal look like. Mine is
probably easy to guess.

Here's the definition of a business model:

"A business model describes the rationale of how an organization creates, delivers, and captures value"

Good luck making a casino fit in those traditional
parameters.

It would have to be re-written as "...how an organization creates, delivers and captures expected value"

Quote: aceofspades

It would have to be re-written as "...how an organization creates, delivers and captures expected value"

Very good, very funny. But the question remains, how
would they show they were producing value in a
casino business model. Even the business model
for a house of prostitution can show produced value
for the customer. Asking a casino to do it is like
asking a burgler to explain it in his job. Neither creates
any value so its impossible.

Restaurants do it... Bars do it... Concet halls do it.. Shopping malls do it.. And these are all contained in most casinos... Gaming is just part of it, albeit a large part..Are you saying if casinos didn't exist today they wouldn't get a loan.. It's simply an entertainment destination...... Of course a casino could get a loan... You just probably won't be able to build a mega casino for a little while..

Who says the business model has to show it creates value for the customer?

It has to create and derive value for the owner (doing it for the customer is part for most businesses, but not necessary).

Besides, while you disagree, people do get value of of gambling. Even if it is to satisfy an itch. It may be false value, but if the customer has a perception of value, however false it may be, the business can create that illusion of value, deliver it, and take a very real value to themselves in terms. You can call it predatory if you desire. Doesn't matter. Business plans are not arbitrated on some sort of moral compass. Nor should they be.

Quote: thecesspit

Who says the business model has to show it creates value for the customer?

Anyone who expect to make as little even as one cent in profit.

Quote:

It has to create and derive value for the owner (doing it for the customer is part for most businesses, but not necessary).

Can you name one, just one, business not supported, subsidized or propped-up by government that does not create some kind of value for its customers?

Many may fail to do so, but all intend it.

This dance has been danced so many times here that I could probably Waltz it with my eyes closed and not miss a step.

It's all going to come down to individual Philosophy as to whether or not an individual considers casinos to be especially predatory. For the vast majority of players, there's entertainment value and the potential to win money. I've said this a thousand times, if you pay $50 to attend a concert, you go to the concert, and short of finding a $50 (or higher denomination) bill on the ground, you will leave the concert with less money than you had prior to attending. If you go to a bar and buy a beer for $2.00, then you will have your beer and you will have $2.00 + whatever you decide to tip less than when you bought the beer.

The difference (and what some people seem to have a problem with) is in both the thrill that some people derive from gambling, the adrenaline rush and the potential for a costly addiction that can cost money quickly. For example, if someone is an addicted smoker, then they would have to buy about 250 packs in neighboring West Virginia and smoke every cigarette in one day to spend $1,000 on cigarettes that day. That's obviously not physically possible. If you go to a bar and get a $5 gin, then you'd have to drink 200 of those in one day to have spent $1,000 in alcohol that day. I believe that would kill almost all, if not all people, were they successful.

The difference with the casino is that you can lose $1,000 (or even more) in one bet. You could lose that to a slot machine in an hour, or less, depending on the denomination of the machine and how hard Lady Variance feels like kicking you in the testicles that day. There are some people who are not gambling addicts that will go in on a one time basis, lose far more than intended, and that will completely eliminate any desire they have to gamble for awhile, or possibly forever.

The entertainment value derived is obviously for the potential of a win relative to the amount bet, or the ability to grind out a win in Table Games. If this were not the case with slot players, for example, and it was all about watching little pictures spin around, then a slot player should be perfectly content to play a $0.01 denomination machine at one line and one credit per line for a total bet of $0.01 per spin. People usually want a bigger win than such a bet makes possible, so that is where the bulk of the entertainment comes from, rather than watching pictures spin around in circles.

Are the casinos predatory? I don't know, nobody can force you to go into a casino and gamble your money. Let's say you had a deer capable of abstract thought and opening doors. If I put a lion in a room, and the lion cannot open the door, then is the hungry lion to blame if the deer chooses, of its own free will and volition, to walk into the room and the lion kills and eats it? It is the nature of the lion, just like it is the nature of a business to try to make money.

My advice is not to enter the casino if you are the proverbial deer, but if you are and you do, then the proverbial lion should not be taken to task for acting in the way that nature has predetermined.

Quote:

Can you name one, just one, business not supported, subsidized or propped-up by government that does not create some kind of value for its customers?

Many may fail to do so, but all intend it.

The argument is along the lines of 'no real value'. I contend that even if you say there is no 'real value' in the casino business, it's immaterial as long as the customer perceives they gained value from making bets.

I would forget the bank and approach the Central States Teamsters Pension Fund for investment.

Quote: thecesspit

The argument is along the lines of 'no real value'. I contend that even if you say there is no 'real value' in the casino business, it's immaterial as long as the customer perceives they gained value from making bets.

If there is no real value in casinos, then there isn't any in movies, TV, pro sports, fiction, hobby shops, etc, etc, etc.

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Quote: Ibeatyouraces

There's the old saying, "One mans trash is another mans treasure."

Your usage of Newspeak is doubleplusungood. ;)

Quote: Nareed

If there is no real value in casinos, then there isn't any in movies, TV, pro sports, fiction, hobby shops, etc, etc, etc.

Not my argument, really. I am only saying you doesn't matetr if you define it as 'real' value or not. As long as the customer sees value, there is business potential.

Ergo : Casinos can fit into the traditional business model.

Right, what's for dinner?

Quote: Mission146

Are the casinos predatory? I don't know, nobody can force you to go into a casino and gamble your money. .

Nobody forces you to walk in a bad neighborhood at
night with a thousand dollars in your pocket either.
Casinos thrive on the illusion that you can win and
keep winning and get ahead and stay ahead. I am
constantly amazed at the people who really believe
this and who will get angry as hell if you try and tell
them different.

They believe it because the casino has brainwashed
them into believing it. The predatory casino.

Isn't brainwashing people into believing a product holds more value than it actually does just another way of describing marketing? If it isn't, maybe I could make a case against the Axe body spray people....

Quote: EvenBob

Nobody forces you to walk in a bad neighborhood at
night with a thousand dollars in your pocket either.
Casinos thrive on the illusion that you can win and
keep winning and get ahead and stay ahead. I am
constantly amazed at the people who really believe
this and who will get angry as hell if you try and tell
them different.

They believe it because the casino has brainwashed
them into believing it. The predatory casino.

Well, I've heard enough. I now believe Bob is the man behind This site.

Quote: Paigowdan

Well, I've heard enough. I now believe Bob is the man behind This site.

What a great site, this guy is really up to speed on
the subject. This really jumped out at me:

"Advocates of the predatory gambling trade say they are no different than other businesses. They describe it the same as “drinking wine, going out to a restaurant or going to the movies.” Yet the owner of the vineyard drinks the wine he makes. The owner of the restaurant eats the food he serves. The movie actress watches the movies she makes. This is the only product or service where most of the people who own it and promote it, including public officials, don’t use it and don’t want to live near it."

That's the god's truth. Dealers and the pit will laugh
in your face because you're dumb enough to play their
predatory games, I've seen it countless times over the
years. I know of no other business where this happens.
My barber and butcher and mechanic think I'm wise to
do business with them. A casino is the only business
that views its customers as gullible morons. And if you
show them you aren't the gullible moron they hope you
are, they show you door for being an AP.

PGD loses an argument again! To EvenBob no less. Wow.

Quote: Paigowdan

Well, I've heard enough. I now believe Bob is the man behind This site.

This site is full of good stuff:

"Predatory gambling is the practice of using gambling to prey on human weakness for profit. For-profit gambling, or commercial gambling, is illegal unless the government makes it legal. Where you have legal gambling the government has given its support and in nearly every instance operates in partnership with gambling interests, whether in the form of state lotteries, commercial casinos or tribal casinos."

Quote: DeMango

PGD loses an argument again! To EvenBob no less. Wow.

Lose an argument? I won. I said that Bob is 100% in line with that site, - and I was 100% right!

To quote EvenBob: "What a great site, this guy is really up to speed on the subject."

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Quote: Ibeatyouraces

You'll NEVER see Loveman gambling at an MGM property or Murren doing the same at a Caesars one or anywhere else for that matter.

Even on a fictitious show like Las Vegas, you never
saw the James Caan character, or indeed ANY of the
main characters, so much as pulling the handle of a
slot machine. In fact, Big Ed was always hinting that
people who gambled were idiots.

Quote: EvenBob

Even on a fictitious show like Las Vegas, you never
saw the James Caan character, or indeed ANY of the
main characters, so much as pulling the handle of a
slot machine. In fact, Big Ed was always hinting that
people who gambled were idiots.

You see - there's your proof. Bob saw it on a TV show.

deleted

Quote: Paigowdan

You see - there's your proof. Bob saw it on a TV show.

Actually, that show had 2 advisers who were in
the casino business that were always on the
set. I'm sure they told them management never
gambled and had a dim view of gambling in
general. James Caan didn't think up Big Ed's views,
that came from a writer who knows the business.

Back in the 70's and 80's, when casino employees
had more job security, many of them weren't afraid
to call you an idiot right to your face for gambling.
Not so much anymore, everybody is afraid of losing
their jobs for sneezing crossways, let alone being
frank with customers.

Bob -
High ranking casino executives are not allowed to gamble as an industry rule, as a conflict of interest issue.
Neither can casino surveillance workers for the same reason.
They're extensively trained and well-versed in game protection.
Dealers and lower-level floormen may gamble at other properties.

Bob knows so little about the gaming industry (and gambling) that he's still married to his 2nd nut kicker.

Quote: Paigowdan

Bob -
High ranking casino executives are not allowed to gamble as an industry rule, as a conflict of interest issue.
Neither can casino surveillance workers for the same reason.
.

Yeah, thats the reason they don't play in casinos,
they're not allowed to. They're jonsing to do it, they
yearn for it, but those wascally rules prevent them.

Once again Dan toes the company line. Good job.

When a pit person alludes that you're an idiot for
gambling, what he's really saying is he's jealous
he can't play like you. Right, Dan?

Quote: EvenBob

Yeah, thats the reason they don't play in casinos,
they're not allowed to. They're jonsing to do it, they
yearn for it, but those wascally rules prevent them.

Once again Dan toes the company line. Good job.

When a pit person alludes that you're an idiot for
gambling, what he's really saying is he's jealous
he can't play like you. Right, Dan?

No.
Pit personnel don't think people are good or bad or idiots or saints, or what have you, for spending a night out gambling, anymore than they think themselves idiots for working in the same environment. We view good people as good, idiots as idiots, - whether or not at work, - as does any normal and well-balanced person who deals with people. A lot of the customers at casinos are high-ranking, professional and gracious people, and a lot are simply ignorant low-lives and shot takers. Mixed bag as anywhere else or in any other business establishment. Casino workers don't judge people as good or bad simply for being casino customers, anymore than food service workers think people are either smart or idiots for simply going to a Buffet or restaurant.

People patronize all sorts of businesses and establishments, and your saying "what we in the industry think" - is so off the mark, it is ridiculous. We know you're not a pit boss, or anyone who works or had ever worked in the industry, and if you claimed otherwise, I'd say you're 100% full of it. You get your industry information from James Caan in an episode of Vegas, which is a lot like claiming to be a DEA expert from watching episodes of Breaking Bad.

If a pit boss or dealer thinks you're a good guy, it's probably because you're a good guy and it shows, - same as in any other environment. And if a pit boss or dealer thinks you're an idiot, it's probably because you're an idiot and it shows, also the same as in any other environment or business establishment.

Quote: Paigowdan

You get your industry information from James Caan in an episode of Vegas.

Dan Dan Dan.. I get my info from being a casino patron
for 37 years. From watching and listening. From reading
what the industry thinks of people who gamble in their
casinos. I mentioned the TV show because they gave
the correct line, not because they invented it.

Discussions about this with you are worthless, I learned
that the hard way. You're in the business, Dan, what else
would we expect you to say. You're the proverbial Company
Man. Hear See and for sure Speak no evil about the business
you're in.

Quote: EvenBob

Dan Dan Dan.. I get my info from being a casino patron
for 37 years.

Well, if you've been nothing more than a casino patron for 37 years, AND think casino workers and executives think players are idiots, then that's from your player point of view, and is very sad to hear indeed. There were plenty of people I thought were fine, successful people operating on a high level, and plenty of people who were low lives. Some people leave the casino feeling that had a fine time, and others leave the casino feeling like idiots for having come. This depends upon the person, not the casino.

Quote: EvenBob

From watching and listening. From reading
what the industry thinks of people who gamble in their
casinos. I mentioned the TV show because they gave
the correct line, not because they invented it.

On TV, they invented it, all right. Fools think it's real and that they're industry experts now. There are people who listened to the Beatles for decades and admit and know that they can't play a note, or really know a damn thing about the recording industry. There are people who watched every episode of Dr. Marcus Welby, M.D. and of House, and know and admit that they no nothing about medicine or the medical industry, - just that they liked watching the show. Being a couch potato watching TV or reading a mag is not an education in any field. Smart people know what is fiction. Sitcoms and dramas over the tube are fiction, not education.

Quote: EvenBob

Discussions about this with you are worthless, I learned
that the hard way.

No, accepting a little bit of counsel and advice from those who are really in the industry is the easy way.
Working a career in the industry is the hard way.
Some are lost to any possible way in learning about or knowing this industry.

Quote: EvenBob

You're in the business, Dan, what else
would we expect you to say.

I certainly don't expect you to say something like, "Well, let's see....Dan's been in the industry for years, is quite successful, and knows what he's talking about though actual experience and hard work." That would be the hardest thing for you to do, Bob, because you would have to admit that someone else other than yourself has some good points to make, and knows what he's talking about when he's talking about the gaming business. So don't be the pretender that you are on the gaming industry, Bob.

Quote: EvenBob

You're the proverbial Company
Man. Hear See and for sure Speak no evil about the business
you're in.

Yes and no.
I am the proverbial company man, because I consider the Gaming Industry as a great and legitimate business, for all the problems that it has, and as any industry has, for that matter. I work hard to get good gaming products out, and to provide the best assistance and support on our products to our casino operators.
I've seen both industry successes and problems (both technical and on very rare occasions, ethical), and address them all as the come on my desk. And the industry is pretty damn clean now, - all accusations of gangsters, customer ridicule, and conspiracy theories dismissed as conspiracy theories from fools. I spend my time working with math specs, mathematical spreadsheets and gaming mathematicians, product documentation, product approval processes and compliance, and customer service to casino operators on our products. Never met Al Capone, or pit bosses who thought customer patronage was a bad thing or that anyone was an idiot for having a night out at a casino, or anyone ever in this business rigging a game. Met a number of conspiracy theorists on this industry, including this board, all from outside this industry, with little real knowledge.

Quote: EvenBob

Quote: Paigowdan

Well, I've heard enough. I now believe Bob is the man behind This site.

This site is full of good stuff:

"Predatory gambling is the practice of using gambling to prey on human weakness for profit. For-profit gambling, or commercial gambling, is illegal unless the government makes it legal. Where you have legal gambling the government has given its support and in nearly every instance operates in partnership with gambling interests, whether in the form of state lotteries, commercial casinos or tribal casinos."

Good stuff? It's completely ass-backwards.

ANY activity is (and/or was) legal until a government made it illegal in the first place.

And when you have ANY legal business activity it is because "the government has given its support", that's what a business license is - government supporting your business and claiming it's legal.

Quote: EvenBob

Dan Dan Dan.. I get my info from being brainwashed for 37 years.

Fixed that quote for ya Bob. If they're all so evil and corrupting, why have you given them so much money over the years? Even more importantly, why do you continue to patronize them.

It seems you're the perfect example of the caino's business model. You "know better" and yet have still been partaking of their "services" longer than most of their employees have been alive. Seems like they've got the ultimate business model if we're to judge by your example.

Aahz... he can beat the casinos. Softly, softly, predict the roulette wheel.

Quote: EvenBob

I am
constantly amazed at the people who really believe
this and who will get angry as hell if you try and tell
them different.

They believe it because the casino has brainwashed
them into believing it. The predatory casino.

I go to Vegas about 1 or 2 times a year. Other than that, I don't gamble (I don't count micro-steaks online poker. I am still playing on a $100 deposit I made two years ago.). I play about 16 hrs of S17 blackjack each trip with a house edge of 0.28%.

70 hands/hr x 16hrs = 1120 hands per trip x 1.5 trips per year= 1680 hands of blackjack per year. If i continue for 20 years I will play 33,600 hands of -ev blackjack. It's most likely I will be a lifetime loser, but I think I have a chance of being ahead lifetime.

What if I take the casino's position on this action? Suppose I said I had a counting system that gives me a 0.28% edge at BJ and I intend to practice it and use it on my occasional Vegas trips. You would tell me that it's a waste of time. With an advantages so small I won't play enough hands to be assured of a profit. I may very well lose money.

Quote: Aahz

why have you given them so much money over the years?

I never give a casino anything, they give to
me. I also spend as little time there as
humanly possible.

Quote: EvenBob

Nobody forces you to walk in a bad neighborhood at
night with a thousand dollars in your pocket either.
Casinos thrive on the illusion that you can win and
keep winning and get ahead and stay ahead. I am
constantly amazed at the people who really believe
this and who will get angry as hell if you try and tell
them different.

They believe it because the casino has brainwashed
them into believing it. The predatory casino.

It's all in the Math, EvenBob, has always been in the Math, and always will be in the Math. You can win in the long-term, as an AP, if you want to do the work.

The problem is not believing you can win, but rather in believing that you can win without expending considerable effort, which is not the casino's problem. Casinos do expend considerable effort and money in an attempt to win more money than they are expending. They are actually doing something and the player who plays at a disadvantage (but expected to win, long-term) is either doing nothing, not doing enough, or is not well-enough bankrolled which is a failure in either research, preparation, or both on the part of that player.

Variance exists, even in the long-term. The probability of winning, overall, simply decreases over the number of trials at a negative expectation game, but there are a few who still win. Most casinos don't do what I would consider lying, except Revel, who makes a habit of it. (August 1 is my monthly signature change, so I had to throw that in there.)

I will tell you what I find ironic, and we're friends, so I hope you know that I mean you absolutely no offense: You have the self-declared Republican saying, "The evil effing predatory casinos," against the self-declared Socialist saying, "Personal responsibility!" You have to admit, that's hilarious.

Quote: Mission146

against the self-declared Socialist saying, "Personal responsibility!" You have to admit, that's hilarious.

Why? I wouldn't go to a casino if I didn't
know I had them where I want them. Thats
as responsible as it gets.

Quote: EvenBob

Why? I wouldn't go to a casino if I didn't
know I had them where I want them. Thats
as responsible as it gets.

That's not what I meant at all, so I apologize if you interpreted that way. I was speaking more generally, as to your position of the casinos being predatory.

Quote: Mission146

The problem is not believing you can win, but rather in believing that you can win without expending considerable effort, which is not the casino's problem.

I believe i can win with in the long run with basic strategy alone, provided the long run is not the result of habitual gambling. There is a difference between believing I can win and believing I will win.

Quote: EvenBob

Why? I wouldn't go to a casino if I didn't
know I had them where I want them. Thats
as responsible as it gets.

No, not "responsible," as that's as predatory as it gets : "I got them where I want them."

It is clear that Bob's view of casinos as being predatory is his own projection applied them: "I got them where I want them."

Quote: Paigowdan

No, not "responsible," as that's as predatory as it gets : "I got them where I want them."

Sure, whats wrong with that. I never said the casino
was wrong with being predatory, I just want them and
everybody else to admit they are.

Quote: JimRockford

I believe i can win with in the long run with basic strategy alone, provided the long run is not the result of habitual gambling.

Or social/recreational gambling. Social gamblers, as well as recreational gamblers, essentially pay an admissions fee (or usage fee) called the house edge. They seem to have no problem with it.

Quote: JimRockford

There is a difference between believing I can win and believing I will win.

Now Here's a healthy individual in a casino.

I, too, believe I can will, as in "might." And so I spend a few nights a week doing research with discretionary cash.
I do not believe I WILL win, though I may indeed, and often have.

Quote: EvenBob

Sure, whats wrong with that. I never said the casino
was wrong with being predatory, I just want them and
everybody else to admit they are.

A theme casino built to look like a hawk with wings outstretched and talons open over the main entrance. That should give it away.