Future looks bright for neighborhood casinos

Bob Shemeligian

Monday, Oct. 20, 1997 | 11:25 a.m.

With more megaresorts that cater to tourists planned for the Las Vegas Strip, the future also looks good for neighborhood casinos that cater to local residents.

That's because the smaller neighborhood casinos cater to local residents who work at the huge Strip resorts.

"The area population is expected to reach 2 million within nine years, and if there is a plateau in the future, I don't see it," said Glenn Christenson, chief financial officer of Station Casinos, at last week's World Gaming Congress & Expo at the Convention Center.

But Christenson pointed out that with so many players on the local market, competition is fierce.

"I can't emphasize enough how competitive this market is," said Christenson, who noted that the revenue from local customers ranges from 50 percent to 80 percent at Palace, Boulder, Texas and Sunset Stations, the local Stations properties.

Others attending the World Gaming Congress & Expo agreed that the local casino market in Las Vegas is extremely competitive and that those who will thrive are the ones who offer the most to local residents.

Christenson noted restaurant choices, movie theaters, children's arcades and the annual Great Giveaway football contest -- which gives three new homes each year to winners in each category (most winners, most losers and "fiddle in the middle") has helped Stations maintain a return of greater than 18 percent each year.

Andrew Klebanow, vice president of marketing for the Santa Fe Gaming Corp. explained that better accessibility has led to success at the company's Santa Fe hotel-casino in northwest Las Vegas.

"If you live in that area, and you like a steak dinner a little better at a casino on the other side of town, you're not going to fight the traffic," Klebanow said. "Clearly, accessibility is the key."

Klebanow noted that several neighborhood casinos have evolved into "de facto community centers" where people from the surrounding community meet. "They get together to dine, enjoy a movie or other amenities."

And, they gamble.

Andrew Zarnett, an analyst with Ladenburg, Thalmann and Co. in New York, said the number of local residents who gamble every day has increased 17 percent in the past three years, and their gambling budgets have increased by 24 percent.

Shannon Bybee, executive director of UNLV's International Gaming Institute, noted that residents of Clark County will lose on average $1,886 this year in legal gaming, and the total amounts to $1.4 billion.

Zarnett estimated the figure is even higher -- as much as $1.65 billion.

Once reason why the numbers are so high, Zarnett explained, is because many locals are video poker players, and they play to lose.

"Video poker players will allow themselves a set budget, and they will not leave the casino until the money is gone," Zarnett said. "If they hit four of a kind, then all that does is allot them more time to play."