Bingo seen as feeder to slots

David Strow

Monday, July 12, 1999 | 10:55 a.m.

Can a casino possibly make any money at bingo?

A group of casino executives says technology has made it possible -- but that it is unlikely bingo will ever be seen as a big moneymaker in Las Vegas. Breaking even, though, is a definite possibility.

"Customers won't allow (bingo profit) to get out of line," said Alex Elliott, director of slot operations at the Santa Fe hotel-casino in northwest Las Vegas. "The bingo customer is very astute, very smart, very quick."

The executives addressed the future of bingo last month at Casino Ops '99, a gaming seminar hosted by the University of Nevada at Las Vegas.

What's driving bingo revenues up across the nation is computerized card machines. With a traditional paper card and dauber, a bingo player is limited to the number of cards he or she can examine in the brief period between numbers. With the new machines, a player can play up to 150 "cards" at once.

"In Las Vegas, I think you'll end up with 80 percent machines (in bingo halls), because you want the buy-in to go up," said Lenny Del Genio, vice president of Race and Sports International of El Paso, Tex.

That's the case at Santa Fe. It began introducing the machines eight months ago, and they already account for 35 percent of all bingo games played at the casino. Santa Fe intends to push that to 80 percent, Elliott said, though paper cards and daubers will always exist to satisfy bingo purists.

Often, machine players will play maximum games. They'll then start playing the new multi-line, multi-coin nickel video machines that are providing heavy profits for casinos across the valley.

"They want that fix, and they need more," Elliott said. "I am a greedy slot director who says, 'Thank God for bingo.' The revenue on our slot machines is going through the roof and that's because of the every-day bingo player.

"The effect is obvious. If there's no one out on the floor, you ask, 'Is bingo in or out?' "

Santa Fe's slot machine win rose 20 percent in 1998, and is up an additional 15 percent so far in 1999. But bingo isn't the only reason -- northwest Las Vegas is booming, and with it, Santa Fe's business.

Today's Las Vegas bingo market is seen as an essential loss-leader for local casinos. It is expected that the house will lose money on the games, but bingo customers provide steady play for other games, particularly slots, between sessions. Slot play is especially important for a locals casino; Santa Fe, for example, gets 85 percent of its win from slot machines. The state average, by comparison, is about two-thirds.

Because of Santa Fe's 10 daily bingo sessions, many regulars spend five or six hours a day in the casino, Elliott said. It is a particularly critical way to fill a casino during holiday periods for Santa Fe, and the casino will offer its biggest giveaways during holidays eight to 10 times a year, he said.

The philosophy of bingo as a loss-leader is starting to spread nationwide, Del Genio said, as more and more Indian tribes open casinos where they once had only bingo halls. In many cases, tribes used bingo profits to build their casinos. But since Indian casinos don't have the competition their Las Vegas counterparts do, taking a loss isn't a necessity, Del Genio said.

"Bingo is in transition in the tribal environment, but it can be profitable," he said.

Indian casino operators have hardly given up on the game. Hilary Owl Osborn, chairman of the Tribal Casino Gaming Enterprise Board for the Cherokee Nation in North Carolina, said the tribe plans to offer a $5 million jackpot in a bingo game this summer -- the biggest jackpot in five years. The Cherokee nation opened a Harrah's casino in western North Carolina last year, and it has quickly become one of the most profitable tribal operations in the Harrah's chain, Osborn said.

One key way to draw a big crowd without offering a bank-busting prize like that is a progressive jackpot. Since these build up gradually, they don't dent revenues as a one-time $5,000 or $10,000 jackpot would.

"Progressive jackpots are what people like to chase," Elliott said. "Bingo customers in Las Vegas will travel for that progressive jackpot."

The philosophy of bingo as a crucial loss-leader for local casinos will be challenged soon, when the Resort at Summerlin opens. A decidedly upscale development, the Swiss Casinos of America Inc. hotel-casino will not offer bingo. Elliott says it's a move that he'll watch with great interest.

"We are anxiously awaiting to see what happens," he said. "If they stick to their guns, they won't be a competitor."