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StumbleMore games per machine means fewer slots in Nevada casinos
Number of slot machines in nation grows, but in state, there are 20,000 fewer than at 2001’s peak
Tuesday, Aug. 24, 2010 | 2 a.m.
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While the number of slot machines nationwide continues to grow with the spread of tribal and nontribal casinos, one-armed bandits are decreasing in Nevada — a trend that has more to do with new technology than the recession.
Roughly 833,000 slot machines are in play in the United States, up from about 600,000 machines in 2005, according to a report this month by the American Gaming Association.
When adjusted for inflation, gamblers are spending only slightly more on slots than a decade or more ago, according to the report, which examined states that long have had gambling, including Nevada, New Jersey, Iowa and Illinois.
In Las Vegas, visitors spent on average just under $70 per visit on slots in 1992 compared with just under $80 per visit in 2008, when adjusted for inflation, the study said.
It’s no secret that in the aggregate, slot players in Nevada are wagering millions less than they were during the boom years.
What’s less known is that many fewer machines are still in operation.
As of June 30, there were 168,504 slots in Nevada casinos, about the same number that were operating in 1997. The number of slots in Nevada peaked in 2001 with 188,705 machines in “nonrestricted” locations, excluding bars, grocery stores and other noncasino businesses that may offer up to 15 machines. The decline in slots over the past decade seems to contradict the growth of the industry over most of that period, which yielded more elaborate casinos that in some cases replaced smaller properties.
The trend is mostly explained by the transition to machines that offer multiple games to choose from, such as several varieties of video poker and keno, said Frank Streshley, chief of the Gaming Control Board’s tax and license division. By purchasing slots offering a menu of games in one machine, casinos no longer need to offer as many individual machines, he said.
The change has been dramatic in some of Las Vegas’ bigger casinos. The Rio, MGM Grand and Circus Circus each have about 1,200 fewer slots than they did in 2001, Control Board figures show.
On a much smaller scale, some casinos have removed selected machines from their floors to cut costs, as rarely used machines may not justify the taxes and other maintenance costs required to keep them on the floor, Streshley said.
Nevada casinos pay a tax of $250 per machine each year on top of a quarterly fee of $20 per machine.
•••
Phil Satre
Phil Satre, who catered primarily to retirement-age gamblers when he was CEO of Harrah’s, recently got a tour of a big moneymaker with little relation to gambling or gray hair.
Steve Wynn’s $68 million Beach Club and adjacent Surrender nightclub at Encore are expected to pay for themselves within two years, Satre told a group of managers at a recent casino marketing conference.
The club is an “enticing, sexy environment” with plenty of free “volunteer entertainment” from its bikini-wearing patrons, he said.
“The people who are entertaining there aren’t being paid by the casino,” Satre said. “I don’t think there was anyone in that place in a bathing suit who was over 30.”
That helps explain a new local milestone: Wynn and Encore, with four nightclubs between them, generated about as much revenue from food and beverage sales as from gambling. The Encore clubs, which opened in May, helped prop up results at Wynn’s Las Vegas properties, which in general are performing poorly along with the rest of the Strip. Food and beverage revenue at the properties rose 12 percent in the second quarter to $111.5 million. Gambling revenue — still the largest chunk of the business — fell 6 percent to $117.2 million.
•••
A study published last month by Cornell University’s Center for Hospitality Research set out to prove the logical yet supposedly unconfirmed theory that customers spend more money at hotels they rate highly.
After surveying more than 20,000 guests of an undisclosed upscale hotel chain, researchers at J.D. Power and Associates concluded that:
• Customers who gave hotels high marks spent $21 more, on average, during their stay than dissatisfied guests. They spent an average of $32 more on their next visit.
• Increases in guest recommendations led to higher occupancy rates, with about 8 percent of hotel occupancy tied to the number of recommendations received.
• Customer satisfaction is tied to four key areas: accurate reservations, check-ins completed within five minutes, no problems during the stay and no billing errors.
Researchers blasted hotel customer satisfaction surveys, saying they are usually poorly designed, with vague questions and few specifics to help improve service.
Some properties spend little time and money dissecting customer satisfaction surveys or other rating methods in the quest to fix problems or improve operations, perhaps doubting that such efforts affect the bottom line, the study found.
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Fewer slot machines. The new server based Slot Machines with ever changing odds at the whim of the slot manager, no jackpots, lousy to non existant comps, expensive low quality food, expensive drinks, The Las Vegas gambling experience is over! The corporate entities have destroyed this once unique and exciting experience!
Fewer or more slotmachines, or more or less hotel rooms, shut down hotel wings or even towers, not the biggest problem you are currently facing.
American citizens, picture this: Global economists are carefully analizing the situation of your domestic economy. And it's not looking too good at the moment. In fact, people are very concerned of a double-dip , which could easily be the jump start of a deep recession, if not depression. The worst scenario for the global economy, as many countries are eyeing carefully what's happening in the U.S.
The problem that's happening right now is that the average American doesn't have much money to spend...or, doesn't want to spend as he/she was used to. Or, no more credit lines or fear that things could get worse, or.... hoping that prices will go down even more in the future. This is what we call the ..... DEFLATION.
So, what if Americans stop spending money? Unemployment will go up, spending will come to an even bigger halt, unemployment will go up even more. A chain reaction in progress, with probably not much alternatives to get out....(than making some big war and re-set the situation).
So, instead of avoiding this, your FED will keep pumping more and more money into the market, the Dollar will be de-valuated, and this may attract more tourists from other countries. At the same time, the US economy will not really improve as long as the US citizens don't get new jobs and more money to spend. By making simply new debt, things may be ok in the short run, but the long term expectations may be fatal for everybody.
Just like the good old "slash and burn" mentality, things will not change and we will not learn from the past. Everybody's hoping things get better, but they don't. As for the casinos, they simply can't spend any more money that they don't have. Therefore, cutting down costs is the main priority. Tightening up on the slots and table games is another option, firing more people, raising efficiency is another tool of the management that tries to grind out every single penny possible.
To the bargain hunters and penny pickers, times may definetely be over
As for Vegas, people used to say..."Hey, this is Vegas, and Vegas is Vegas". But the saying doesn't hold up to its initial meaning any longer. Vegas is Vegas and will be Vegas, but it's a new Vegas. And because of the high competition in the world with all the new casinos in operation everywhere, the new Vegas is no longer as interesting to the visitors as the old Vegas was. Times have changed. Time to take consequences.
Greetings from Switzerland
This is a very interesting article.
Intelligent casino slot managers would do well to analyze each different type of slot machine to ascertain what features are most popular with each individual type of game.
For example, I play only Caveman Keno slots. If the machine is set too fast, it is no fun. If the noises are taken off the machine, then it is much less fun. It is exciting to be able to hear the "ding" each time one of my numbers hits, and the "crack" of the egg when one of the three eggs is hit. Those machines which still have their speed choice button activated allow a player to select his favourite speed (slow, medium or fast play).
Fun machines are busy machines, even if they are somewhat tight.
I dont play slots, tables, keno or gamble at all. I am smarter than that. It amazes me that people stand in awe looking at these places and then walk in, put money into a machine and walk away without their money and then complain. The odds are against those who gamble, hence the 9 billion dollar property, City Center. Duh??
@cinderelladream:
That's right. And that's life...
I would consider it being a bad idea to diminish the amount of machines, because at weekend high tide customers might draw their own conlusions leading to change of their playing field/casino when urged to eagerly await a seat in front of a slot machine.
Instead of a yearly $250 tax per machine, make it a yearly $250 tax per game, so the state's take is the same regardless of the number of games per machine. The casinos know which games are the most popular, so it will be straightforward for them to pick the most profitable games.
Boris;Right on the money.You can't cure a drunk with more booze.You can't cure a debt problem with more debt,especially when Federal,state,county,city,and individuals have hit the wall in their ability to service even their existing debt!The consumer in this country is 70% of the economy,and were cutting back to prepare for an uncertain future.Our ability to increase spending dosen't exist anymore.Our houses are worth half as much,won't be pulling anymore out of there.If u are employed,your not gettin a raise,they can easily find someone else for less if u complain.The Goverment overhang in debt is now 50% of the economy.This can't keep pileing up much longer.Pull all this Gov. debt away and this country would have imploded 2 years ago.Double dip?Lets see how long our Gov.can keep borrowing 2 trillion every year to prop us up.Were worse off now after throwing all this borrowed money down a black hole.We saved the banks from going bankrupt but in the process destroyed the nations ability to stay solvent!By the way the banks are still insolvent,they were allowed to change their accounting methods.Mark to model,not mark to market on all their supposed assets!
"Steve Wynn's $68 million Beach Club and adjacent Surrender nightclub at Encore are expected to pay for themselves within two years, Satre told a group of managers at a recent casino marketing conference."
Environ skipped right over this.Lol. I thought you said this stuff didn't work?
Way to cherry pick.
Those $22 margaritas and $36 test tube drinks must add up real quick over at Wynn. Talk about a cash cow!
Every Monday morning must be really interesting with the Wynn accountants when they see those numbers! Steve Wynn must just have a big smile on his face when he sees the revenue generated at his pools and clubs.
Interesting mentality. People cringe at dropping a few hundred in a casino, but willingly drop $500+ at a pool party or club. I guess the percieved value of a cabana rental, a round of drinks, or bottle service must be enticing. Plus there's the bonus of a hook up if one is "lucky"...
I know Steve Wynn is hated because of his dealer tip sharing policy, but you have to give the guy his due. Everything he does makes money and more money...
Hopefully no one will die at one of his pool parties...
Check out my always entertaining blog about LV:
http://jimmyhoofa-lv.blogspot.com/
Boris, do you follow American business news on sites like cnnfn.com? You may have read about an important milestone that has been reached--Americans now owe more on their student loans than they do on their credit cards--and student loans are MUCH MORE TOXIC than credit card debt. I heard that Britain and Canada have corrupt student loan systems like we do. What that means is--there isn't going to be a recovery with people in that kind of debt. I can't believe the story of this one debtor in this article who owes $1.7 million in student loans and he fled to the Phillipines.
http://www.walletpop.com/blog/2010/08/20...
manfromuncle1
I am not following American Business, but I am following what's going on in the markets. And I see only that the markets were overly optimistic in spring 2009 when citigroup anounced a 2+ billion dollar profit (mostly due to some smart book-keeping tricks), but technically, Citigroup wouldn't even exist anymore. And along with citigroup, many other banks, and operations.
We always blame the Wallstreet gurus to have run down the Las Vegas casinos with their wrong policies. However, if you think about: Who did ever finance the casinos and big hotels before this period? The money that came from the underground was from un-known investors that charged heavy interests, right? And these interests could be paid solely by skimming the official casino profits. That's what kept things going. We all remember the movie "Casino" and the things that happened at the Stardust in the 60s and 70s. After all, we all have to ask ourselves how it was possible to build such big casinos and hotels, and later on simply implode them just to build something even bigger and better. Somebody always had to pay for it.
Today, there is not just one Las Vegas in the world, anymore. The Asian gamblers that used to fly into Vegas in crowds can now easily play in Macau and don't have to fly 16 hours any longer. Plus, they are within their culture, which makes them feel good, too. Think about how many billions of dollars are not flying into Las Vegas anymore. Which makes us come to the conclusion that Vegas is too big to meet the demand. Whether we like it, or not, it's too big now.
With big delight I see the de-valuation of the US currency. This makes US visits even cheaper for us visitors from Europe. On the other hand, it keeps Americans from visiting other nations as your money becomes worth even less.
I remember well the days when Las Vegas was one of the very few real gaming destinations in the world. And this was in the 80s when everybody went to visit Vegas for real gambling. It took some time for other countries to wake up, but very soon there might be gambling available also in Japan, Vietnam, and Europe already has a lot of gambling now. It's that the pie is split up differently. If Las Vegas wants to remain competitive, it has to attract the visitors with great offers that will lure them in. By offering 6-5 b-j, it won't work out. You will only get the suckers in town. And they don't have the kind of money that will make Las Vegas prosper again.
Greetings from Switzerland
what helps vegas are the destinations around it; grand canyon, lakes mead and havasu, interstates to los angeles and arizona.
I also believe that side attractions for the recreational gambler would definetely help. Also mentioned earlier, the Echelon site could be used for a great amusement park where people would go to enjoy and have fun. Charge them a day-pass for 10 dollars (children 7 dollars), and there would be some money coming in.
Besides this, Las Vegas and the entire valley is a great location for retired people buying their homes for cheap. It is important, however, that these people understand that the subsidized all-you-can-eat buffets at the casinos can only remain affordable if there are enough people also spending some money in the casinos for gaming. If you accept that, Vegas can be definetely a great place to stay. For the working society, there must be bargains and interesting deals that make them come to Vegas for a few days, and a a strong international marketing network. With the US currency falling to an all-time-low compared to most other currencies, visiting the US will be cheaper than ever, and this is a terrific advantage of the US economy.
From Switzerland
Sounds like a bestseller to me, Boris.
Refreshing ideas.
Don't worry, Nevada, all those hotties in bikinis at the beach clubs will soon age, get fat and lose their hair and then the slots will return. It's cyclic. Just a matter of time.
Man they should bring back the Klondike!!
Funny you should mention that, Burritobandit. I was at the Klondike on Sunset and it doesn't do the business the old Klondike on the Blvd did. I think the owner must be kicking himself for opening the new Klondike as it appears it barely covers the bills.
manfromuncle1;Those student loans do not get wiped off the books in a bankruptcy either.They will hound you for life.Be careful taking out a loan for advanced basketweaving for 20 g's!
Ok jaquekeno do u remember the silver city?