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Roberts' Rules
The Future of Casino Gaming
by Stanley Roberts
In 1970 I tendered my resignation as an architect/city planner at one of the largest firms in Los Angeles to enter the gaming industry. Today, in celebration of 10 years of publishing this magazine, I think it appropriate to call upon those prognostication skills developed in my former profession to speculate about the future of casino gambling, specifically in the United States, but applicable worldwide as well.
In the past decade, U.S. casino gambling has grown fourfold from about $1.5 billion to approximately $6 billion in gross win. The major reason for this growth was the opening of Atlantic City in 19178 which has 53 million people within a 300 mile radius, while Las Vegas has but 17 million in the same 300 miles, most of whom live at the far reaches of the radius. In the last few years the rate of casino revenue growth has slowed to a 10 percent annual gain, before considering the effect of inflation. It seems clear that casino gambling has reached a plateau in its growth-it may even be on the decline. The question for players and operators alike is: Where will it go in the future; why; and what can be done to improve the growth of the industry?
Continued growth is not only the measure of success in America, it is vital to preserving one's status quo, management's credibility, consumer quality and general interest by investors and participants alike. Flat growth figures are perceived universally as a reason to look elsewhere. This conventional wisdom is not necessarily correct; nonetheless, it represents the superficial public image that is the judgmental basis used by the "great, unwashed" general public. In the last half of this decade, the casino industry has focused on the larger middle class market, as opposed to its former emphasis on a wealthy "high roller" base. This marketplace does not have the kind of resources to develop a close loyalty to this relatively expensive form of recreation. Middle class people don't own yachts, either. This marketplace has considerably more turnover than "high rollers," thus requiring a much higher level of outreach than past marketing programs. Not only outreach, but education as well, with an eye to future replacement.
Let us examine the factors which affect casino gaming's future and how both industry leaders and players, who want to see their favorite form of recreation survive and prosper, can influence that future.
The major potential for competition for the gaming dollar comes from other gaming activities and other non-gaming recreational pursuits that offer leisure time activities. In 1985 U.S. casinos won $5.2 billion (7.1 percent increase); lotteries took in $11.2 billion (+30 percent); thoroughbred racing handled $8.1 billion (+3.1 percent); harness racing handled $3.4 billion (+1.6 percent); greyhounds took in $2.7 billion (+ 9.3 percent); and jai alai handled $0.6 billion (-0.1 percent). Except for lotteries, gaming growth percentages were not spectacular. Until the advent of the California lottery, casino gaming had no concern with competition from this segment. Casino operators in the Reno/Tahoe area are now claiming that their bread-and-butter weekday bus business has been impacted by the California lottery.
For over a decade the pari-mutuel industries have fought tooth and nail against casino gaming start-ups wherever that possibility arose. This battle has essentially been a misplacement of resources and efforts as the decline of these activities is due more to incorrect marketing than to possible competition. Nonetheless, fear is a powerful motivator. The casino industry has turned the tables by welcoming pari-mutuel fans through the development of high tech race and sports books with "almost there" videos, thus gaining the attraction of these activities in their own facilities. Pari-mutuels would have been better off pushing for the acceptance of slots installed at the tracks, instead of employing a negative advertising campaign which reflected badly on their own image as well.
In Las Vegas, where a much larger variety of gaming activity is permitted, racing, sports betting, bingo, poker and casino games can all thrive in the same building. One activity seems to enhance the other. This kind of multi-faceted approach appears to be the trend of the future. Operators that work in this direction will be the most successful in the long run. Convincing purists, diehards, legislators and the public that this is the case is another problem. In a survey taken of our readership a few years ago, we found convincing proof that while most serious recreational players didn't play every game available, they did enjoy a wide variety of gaming activity.
There is considerable competition for the recreational dollar throughout the world. Resorts, with or without gaming, and other forms of recreation including skiing, tennis, golf, boating, fishing-to name just a few-all seek the discretionary dollars spent on leisure time activity. No activity realizes more of these funds than gambling. No area of recreation has more large-scale operators than casino gambling. The curious aspect of this situation is that no activity does less to promote and develop itself, proportionately, than does casino gambling. The result of this policy is now being felt in Atlantic City, where growth has slowed to a crawl. Casino gambling is simply not keeping pace with other forms of recreation and general population expansion.
While it is true that large audience daily newspapers offer a low C.P.M. (cost per thousand readers) and attract a good share of casino advertising dollars, it is also true that these same newspapers hardly ever run a positive story about casino gaming. In fact, they do the opposite! With complete disregard for factual understanding about gaming, these newspapers jump on negative accounts about casinos. Inflated stories about losers, compulsive gamblers, skimming and other unfavorable items gain prominent exposure in the newspapers. Gambling is a subject constantly "picked on" by the press.
There is only one nationally circulated publication that fairly represents the gaming industry to the public. It is Gambling Times magazine.
For 10 years this unique publication has been the voice of the $6 billion, 25 million player, casino gaming field. Each month Gambling Times has brought to its readers informative gaming strategy for the various games; descriptions of gaming resort establishments-both in the United States and abroad; and the news and developments surrounding this exciting industry which are of interest to every player and casino executive.
Here are some comparative leisure time industries and the publications that serve them: In tennis we have a $2 billion/18 million player field with 22 magazines. In golf we have a $6.4 billion/17.5 million player field with 50 magazines. Skiing has a $2.8 billion/21 million player field with 64 magazines. The casino gambling industry has but one consumer magazine: Gambling Times.
Virtually all magazines exist only because there is advertising support for them. Frankly, there should be more magazines covering gambling but that can only come about when the industry reevaluates where it will provide advertising. A survey conducted a few years ago in the computer industry indicated 285 consumer magazines. This is one of the main reasons for the phenomenal growth in that field.
In nearly every other recreational endeavor, the persons who provide the products used by the consumers sell them directly to the consumer. This includes everything from sporting equipment to clothing to yachts. The consumer buys the implements of the game. In the gaming field, the suppliers only have to sell to casinos. They mistakenly believe that there is little value in advertising their products to the ultimate users, the casino patrons. This notion is particularly erroneous in the area of greatest casino growth, slot machines. A few enlightened manufacturers have realized that consumer interest will create demand for their products. These manufacturers will be the most successful in the future. The facts of the relationships mentioned above place an even greater responsibility upon casino management to support publications in their field, since publishers have no other place to go for this support.
Continuous public exposure is the key to legitimizing and solidifying the image of the gambling business as a recreational industry. Even non-gamblers need to view the industry in a true light in order to dissolve the kind of negative stories found in newspapers, on television and even in the movies. Most news and script writers know little about the gambling industry their stories describe. Instead, they deal with the mythology of the past or the need to sensationalize their scripts.
This is a constant image problem that can only be overcome through the industry placing more resources in advertising. Advertising reaches potential new players. Comps, the major form of casino promotion, do not reach new players. They have no outreach or educational value. This lesson has not been lost on the tennis, golf and skiing industries which are growing nicely.
Approximately 25 years ago the gambling industry began its period of rapid and spectacular growth. Do you know why? The reason can be found in the game of blackjack, which was the principal component of that growth. When Dr. Thorp first published his book, Beat the Dealer, a great deal of excitement was generated by the idea that casinos could be beaten. Many tried, few succeeded. The publication of other books and systems along with the publicity about them stimulated the public imagination-in the same way that lotteries are stimulating the public's imagination today.
Those days and that spirit are fading, and so is the game of blackjack. Unfortunately the casinos didn't have to do anything for many years to stimulate growth, just encourage the big losers by offering comps. Those days are over. There is very little new publishing in this area and certainly no major discoveries that have been developed. Casinos need to pick up the slack in this field themselves, since they are the major beneficiaries of the ultimate activity.
The most logical area in which to promote gaming is by educating new generations of casino players. As the grim reaper inevitably takes his toll upon the troop ship educated craps shooters and the Thorp educated blackjack players, where are the new players to be found? Whose job is it to train the next generation; to expose them to the rules and strategies of the games; to show them the hope, thrills and promise of excitement and profits that can come from a session at the tables? It's the casino's responsibility, of course. Aren't they the biggest beneficiaries of casino gambling?
Gambling Times was established expressly for this purpose. We serve both the player and the casino. It is our belief that an informed and knowledgeable player is a better casino patron. Gambling Times readers are the cream of the crop of casino patrons.
We are the only people making a substantial effort to educate the next generation. We do this through the publication of books and periodicals. The trouble is, however, that the job is too big for a small company like ours. Three million dollars, our gross sales per year, is not enough to educate all the people required to sustain and add growth to a $6 billion business.
What's needed is more assistance in this endeavor by the casinos if we are to do a proper job. Gambling Times has a decade-long record of providing intelligent "how to" advice for all players from the uninitiated novice to the experienced player. In the next few months we will be presenting key casino executives with programs to expand the player base. Anyone who wishes to receive this information can do so by contacting me at Gambling Times.
As to the avid players like yourself, keep reading Gambling Times and our other publications. We are constantly striving to bring you the very best in gaming strategy and betting methods, vivid descriptions of the gaming resorts along with interesting gaming related news-all delivered right to your front door. We always appreciate your support and, of course, the many new subscriptions we receive as a result of your recommendations. Those who use Gambling Times books and subscriptions as gifts are particularly appreciated as they assist us in presenting our products, thus keeping the games alive by introducing more players to them.
As for me, I am happy with the past 10 years of this endeavor, in spite of its many difficulties. I look forward -hopefully to a closer relationship with the casino marketing directors so that Gambling Times can carry their advertising message to the most avid casino players in the world, our readers.
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