gaming management marketing

MARKETING ANALYSIS CASE STUDY: THE GOLDEN GATE HOTEL AND CASINO By Michelle Bruce, Lisa Cartwright, Erin Schmermund and Dana Shankland Supervised by Professor David J. Paster

Editor’s Note: Four students in the Casino Enterprise Management-sponsored HM 492 course offered by the Department of Tourism Management for the College of Business at The University of Southern Mississippi-Gulf Coast recently traveled to Nevada to conduct comprehensive marketing research and analysis on Golden Gate Hotel and Casino, located on in downtown . Led by Professor David Paster, Lisa Cartwright, Dana Shankland, Erin Schmermund and Michelle Bruce spent Jan. 11–18 compiling data for this case study, meeting with Golden Gate owner Marc Brandenburg, Marketing & Promotions Manager Heather Sobczak, Vice President of Marketing Scott D’Angelo, and other key staff members. The students also met with Trent Allen Parks, national account executive for the ; Howard “The Librarian for Gamblers” Schwartz, owner of the Gambler’s Book Club; Ron Aller, a top marketing and operations independent consultant; Douglas Florence CPP, director of NICE Gaming Security; Luigi Mastropietro of Central Credit/Global Cash Access; George Stamos, April Augustine, and Bruce Rowe of Bally Technologies; Marc Weiswasser of Navegante’s CasinoRecruiter.com; Steve Cyr with H-Six hosting group; Dr. Curtis Love and Dr. Gail Sammons at the University of Nevada, Las Vegas; and Dr. David Schwartz, author of Roll the Bones. The following is excerpted from the comprehensive case study that the students provided to Golden Gate’s management following the completion of their course.

Established in 1906, the Golden Gate is proud to be Las Vegas’ most historic hotel/casino and the smallest hotel on Fremont Street, with only 106 rooms. Our guests can enjoy the intimate atmosphere of a historic hotel and then step outside our front doors into the grandeur and excitement of the Fremont Street Experience, with dazzling free light shows and special events. Our shrimp cocktail started a Las Vegas tradition over 40 years ago, and still is named “Best of Las Vegas” year after year. We offer great accommodations, plenty of gambling action and excellent food in a warm and friendly environment. – Golden Gate Hotel and Casino

Modern casino gambling in southern Nevada originated in and was legalized in 1931. When the first third- wave themed mega casino resort, , opened in 1989 on the , people and construction started significantly moving away from downtown Las Vegas. As a result, tourism in the downtown area decreased. The city made an effort to revitalize the area with the opening of the $80 million Fremont Street Experience in 1995. According to the City of Las Vegas Office of Business Development, the Fremont Street Experience attracts, on average, more than 21 million visitors each year. IRS operations also moved to a downtown building the same year, which served as a catalyst to create demand for additional businesses in the area, especially during daytime hours. Many high-rise condominium projects have also been under development, which has helped transform downtown into a livable neighborhood. The growing popularity of Las Vegas as a destination has led to an increase in visits from gaming, leisure and business customers. According to the Las Vegas Convention and Visitors Authority, annual visitor volume has experienced a steady increase over the past five years, from 35.5 million in 2003 to 39.2 million in 2007. Approximately 87 percent (34.1 million people) of all visitors gamble Photo courtesy of Golden Gate Hotel and Casino. 2 Casino Enterprise Management MONTH 2008 www.CasinoEnterpriseManagement.com gaming management marketing CHART 1 CHART 3 Las Vegas and Las Vegas Downtown Gaming Revenue (x1,000) Las Vegas Downtown Table and Slot Win Per Unit Per Day $670,000 $12,000,000 $120 $1,150

$660,000 $10,000,000 $100 $1,100

$650,000 $8,000,000 $80 $1,050

$640,000 $6,000,000 $60 $1,000 Slots Tables Las Vegas Downtown $630,000 $4,000,000 $40 $950

$620,000 $2,000,000 $20 $900

$610,000 $0 $0 $0 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 Downtown Las Vegas Win/Slot/Day Win/Table/Day CHART 2 CHART 4 Las Vegas Downtown Gaming and Non-Gaming Revenue (x1,000) Las Vegas Downtown Average Daily Rate and Occupancy $700,000 92% $80

91% $600,000 $70

90% $60 $500,000 89% $50 $400,000 88% $40 ADR $300,000 87%

Occupancy $30 86% $200,000 $20 85% $10 $100,000 84% $0 0 83% 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 Non-Gaming Gaming Occupancy Level ADR while in Las Vegas, and 38 percent of those visitors gamble On a gaming fiscal year basis, according to the Nevada Gaming downtown (12.96 million people). Non-gaming expenditures per trip Commission, Las Vegas downtown casino properties generated by Las Vegas visitors increased at a compound annual growth rate of $624.3 million in gross gaming revenue in 2007, compared to 7.1 percent, from approximately $695 in 2003 to an estimated $979 $641.9 million in 2006, a year-over-year decrease of 2.7 percent; in 2007. These trends indicate not only a growing demand for Las non-gaming revenue in the downtown area decreased 13.4 percent. Vegas, but also a growth in visitor non-gaming spending. The downtown area generated $476 million in non-gaming revenue While the Las Vegas gaming market has maintained a steady in 2007, compared to $549.9 million in 2006. Chart 2 shows the growth pattern over the past five years, the downtown area gaming and non-gaming revenue trend for Las Vegas downtown for struggles to see year-over-year improvement and has even suffered the past five fiscal years ending June 30. a decline in some years. According to the Nevada Gaming On an aggregate per-unit basis, slot win per unit per day has Commission, Las Vegas casino properties generated $10.9 billion in shown a steady increase over the past five years, while win per table gross gaming revenue in 2007, compared to $10.6 billion in 2006, an per day has demonstrated volatility. It is important to point out, increase of 2.1 percent; the downtown area increased 0.4 percent. however, that the number of slot units has sharply decreased, from The downtown area generated $632.9 million in gross gaming almost 16,000 in 2003 to about 12,000 in 2007, while the number of revenue in 2007, compared to $630.3 million in 2006. table units has remained relatively the same. Chart 3 shows these Because the downtown area attracts budget-conscious tourists, trends on a calendar basis. the implosion of the Stardust and New Frontier, which attract the The supply of hotel rooms in the downtown Las Vegas area has same type of customers, could have contributed to this customer decreased from 10,452 in 2003 to 9,635 in 2007, while average migration. Chart 1 shows the gross gaming revenue trend for the occupancy level and daily rates are 89 percent and $54, respectively. past five calendar years ending Dec. 31 for Las Vegas and Las Vegas Chart 4 shows these trends on a fiscal year basis. downtown from 2003 to 2007.

3 Casino Enterprise Management MONTH 2008 www.CasinoEnterpriseManagement.com Gaming management marketing Golden Gate’s Customers CHART 5 The majority of Golden Gate’s customer base ranges in age from Rated Guests Segmented by Theo per Trip 40–69; the largest representation of that group is 50–59 years old, 100 comprising 27 percent of Golden Gate’s total customer base. The 5 90 5 second largest age group, at 22 percent of Golden Gate’s customer 8 base, ranges in age from 40–49 and is followed by age group 60–69, 80 which reflects 20 percent of Golden Gate’s customer base. The majority of Golden Gate’s non-West (i.e., California, Nevada) 70 66 originating customer base comes from the Midwest, followed by the 60 South, East and international, respectively. Chart 5 represents the percentage of total rated theoretical casino 50 82 win per trip in relation to total rated guests at Golden Gate. 40 Occupancy Percent 30 The Competition 12 Las Vegas casinos epitomize the word “competition.” Downtown 20 Las Vegas, once on its way to becoming nothing more than a bump 10 on the timeline of the city’s history, is now vivacious once again. The 10 12 entity is competing with the ever-changing, ever-growing Las Vegas 0 Strip. The Fremont Street Experience has given downtown Las Vegas % of Total Rates Guests % of Total Rated Theo a new edge and allows people to realize the opportunity and $00-24 $25-49 $50-99 $100+ diversity downtown Las Vegas has to offer. The area has a variety of casinos that can meet every customer’s needs. Customers who like Source: Golden Gate Casino (Internal), Statistical Materials prepared by Scott D’Angelo small, quiet casinos can find them downtown; patrons who like large, The players club is comprised of three tiers. The first tier is a “base exciting casinos can also find them downtown. The diversity of tier” that offers: downtown creates competition within the area. • Usage of points for gifts, dining or play (500 points=$1) Golden Gate Casino faces competition on and around Fremont • 10 percent off dining with points pay Street. Within a one-mile radius, Golden Gate has 14 competitors. • 10 percent off hotel with points pay These alternatives range from casino-only properties to full-fledged • Eligibility for monthly “free gift” and promotions resort properties. Those locations are: Binion’s, California, , The second tier is “Gold” and is achieved by earning 1,000 points Fitzgerald’s, , Fremont, , Golden Nugget, La in 12 months. Advantages of the Gold tier are: Bayou, Main St. Station, Mermaids, The Plaza, The Vegas Club and • Usage of points for gifts, hotel, dining or play (500 points=$1) . • 20 percent off dining with points pay • 20 percent off hotel with points pay Golden Gate Property Analysis • Eligibility (based on play) for monthly free offers, “free gift” Golden Gate is located at the top of Fremont Street and it is best and promotions known for the Original 99¢ Shrimp Cocktail. The property falls into The top tier is “Platinum” and is achieved by earning 25,000 points the small size category, with 345 slots and 15 tables, for a total of 435 in 12 months. Advantages of tier are: gaming positions. It also houses the smallest casino-associated hotel • Usage of points for gifts, hotel, dining or play (500 points=$1) in Las Vegas, with 106 rooms. Golden Gate does have a leased sports • 40 percent off dining with points pay book and a players club. Golden Gate was privately and solely held • 40 percent off hotel with points pay by Marc Brandenburg until April 2008, when 50 percent of the entity • Eligibility (based on play) for monthly free offers, “free gift” was sold to Desert Rock Enterprises, a company with a stake in and promotions Riviera Holdings and that owns the Las Vegas minor-league baseball Reinvestment on theoretical win does not differ by tier level (i.e., team, the Area 51s. higher tiers do not “earn” points at a faster rate), but the coin-in-per- point-earned ratio is competitive with the immediate market. The Restaurants club currently uses the average daily theoretical (ADT) to segment Bay City Diner: Classic diner fare that is open 24 hours, serving groups, but in the near future, the club is hoping to send out specific breakfast, lunch and dinner. offers based on recency, frequency and monetary spend (RFM), San Francisco Shrimp Bar & Deli: A value priced, quick-serve style geographic proximity, and seasonal patterns (e.g., snowbirds, annual snack bar that is open for lunch and dinner. A live musician plays convention attendees). piano in the deli seating area for ambient entertainment. The players club has been active for less than one year, and its relative operational success is currently judged on a month-to- The Players Club month basis. A local (in-state) player stays active in the database by Golden Gate provides many forms of customer care. The players playing at least once per month, and a non-local (out-of-state) player club tenders value-added opportunities. When players initially enroll, stays active playing at least once per year. With the club averaging they receive free play and a promotional item. The players club also 2,500 sign-ups per month from July 2007 through January 2008, the provides direct mail for tracked players every month, including more database is growing at a healthy pace. [Note: Two researchers with this points, free play and free meals. For non-locals, the Golden Gate offers case signed up for the players club and received the promotional item, discounted room rates, free play and free meals on a bi-monthly basis. but did not receive e-mails or direct mail offers within two months. This The casino also offers special birthday and anniversary promotions. To was due to the club’s cost-benefit based decision to not offer immediate enhance direct marketing efforts, Golden Gate sends bi-weekly e-mails correspondence with individuals providing less than $25 ADT on their to customers who have “opted in” to the e-mail mailing list. first visit.] www.CasinoEnterpriseManagement.com MONTH 2008 Casino Enterprise Management 4 gaming management marketing

Direct Mail • Lack of technology utilization in comparison to the rapidly For its direct mail materials, Golden Gate staff members design expanding technology of point-of-sale (POS) and customer the mailer and send it out to a printer company. After printing, the relationship management (CRM) integration at other casinos materials go to Golden Gate’s external mail house where data

It would not be pragmatic to expect Golden Gate to redefine itself overnight. For Golden Gate to make an effective and lasting change, specific long-term and short-term goals should be set and revisited often. hygiene methods are applied (e.g., NCOA, LACS, NIXIE). Golden Gate’s Opportunities in-house system is maintained by the casino’s information • Linked marketing and heavy foot traffic provided by the technology manager. Golden Gate offers a bi-weekly mailer for locals Fremont Street Experience and a bi-monthly mailer for non-locals. The direct mail offers contain • Historic preservation groups to assist with renovations while some combination of the following: $5, $10 or $25 in free slot play; a maintaining historical integrity of the building two-, three- or four-night free stay; a tangible promotional item (e.g., • Corporate sponsorships could help Golden Gate bring its name free dish set), drinks, dinner for one or two, or deli meal; and buy one, and reputation to new markets get one free offers. • Fun books (coupon books) emphasizing unique traits of property that may be distributed to feeder markets Critical Self-Evaluation • No other real front-runners on Fremont Street—opportunity to Golden Gate should address several issues in order to leverage a gain a larger portion of the market profitable marketing scheme. • Focal point of the Strip (Las Vegas Blvd.) is moving north, toward Foremost, the casino should evaluate its employee training to assure Fremont, with the development of Encore, Echelon and The consistency of service. Subsequently, the employee handbook for all (Elad Group) Plaza employees, including those in gaming, food and beverage, and hotel • As hotel rooms on the Strip become more expensive, there operations, should be reviewed periodically and updated as needed. is an opportunity to capture more of the displaced lower- The themes and decorations used in the casino and hotel should budget market be assessed to ensure that guests maintain the perception that • Offers a stronger, player-oriented gaming experience1 Golden Gate desires. • Does not alienate the increasingly dismissed low-roller In the casino, management should review the profitability of table • An ability to capture auxiliary and ancillary non-gaming revenues games and machines to determine if the correct floor mix has been • Provide greater efficiency to the gaming floor by incorporating implemented. Management should also determine whether the automatic shufflers and muckers as well as presenting higher casino is collecting its fair market share of gross gaming revenue vigorish carnival games (based on positions). • Increase reasons for the adoption and utilization of player’s club usage, and take advantage of promotional cost associated SWOT Analysis of Golden Gate tax advantages2 Strengths • Historic value—a draw for tourists interested in the history of Threats Las Vegas • Several larger, better-funded casinos on Fremont Street (the • Location—Golden Gate is at the head of Fremont Street and Golden Nugget is nearby and reminiscent of the larger The Fremont Street Experience’s canopy starts at the casino Strip casinos) • Recent sale of 50 percent of Golden Gate’s holdings to Desert • No draw for conventions due to lack of space downtown Rock Enterprises to ensure funding for capital improvements • Lack of economy of scale as a single property without • Strong San Francisco theme that can be incorporated into centralized corporate purchasing ability nearly every aspect of the casino and hotel • Potential gaming tax increase currently under consideration by • A Hollywood connection—television shows such as CSI and Nevada legislators films such as Pay It Forward have been filmed there • A fresh managerial staff that is open to new ideas and concepts Property Challenges • Competitive food quality and prices in both the diner and deli Golden Gate faces several major physical plant and business challenges. The size and age of the building are both significant Weaknesses challenges for the casino. Real estate in Las Vegas is at a premium, • Golden Gate is miniscule compared to the behemoths of the and Golden Gate’s location does not allow for expansion; Las Vegas Strip—its small scale limits the number of amenities consequently, the floor plan must be designed and allocated to that can be offered maximize profits. Also, the building itself is more than 100 years old, • Age of the building—renovations must be done carefully to so any plans for renovations or remodeling must take into account maintain historic and structural integrity the age of the building, wiring, plumbing, and other structural and • Insufficient employee training has led to inconsistencies in service architectural factors. • Prior lack of capital funding—until recently, Golden Gate was a The location of the casino is another challenge. Being on a major sole proprietorship and revenue for redevelopment was limited street corner is good, but it is at the top of Fremont Street. Walking • Low pay scale for employees contributes to high employee traffic is coming only from Fremont Street, and downtown visitors turnover may not “make it” to Golden Gate if they start at the far end.

5 Casino Enterprise Management MONTH 2008 www.CasinoEnterpriseManagement.com gaming management marketing Labor and licensing are two of Golden Gate’s major business CHART 6 challenges. With respect to labor, efficiency is a vital factor. Unions Market Share (revenue in thousands) are commonplace in Las Vegas casinos. While unions are important Variance for employees, they may create barriers to efficiency. Golden Gate Market Golden Current Fair Variance Percent should address these potential barriers and plan accordingly. Gate Market Market Share Share Improving the Image of the Casino Revenue $624,342 $8,116 1.3% 18,178 (10,062) -55.4% A long-term goal for Golden Gate should be to look for ways to improve its image. One method to improve Golden Gate’s image in # Slots 12,375 345 2.8% the area is to encourage employees to be civically active within the # Tables 410 15 3.7% community. If locals see that Golden Gate employees not only # Positions 14,835 435 2.9% provide gaming and entertainment, but also help out in their community, they will be more likely to frequent the casino. Golden Gate should also consider sponsoring local clean-up days or CHART 7 adopting a roadway. Golden Gate Current and Fair Market Share Another means for Golden Gate to improve its image would be to partner with University of Nevada, Las Vegas (UNLV) and other $20,000 institutions of higher learning. UNLV and other schools are essential $15,000 to the area, and any casino that takes an active role in the interest of higher education will be looked upon positively. Golden Gate should $10,000 $18,178 consider sponsoring a scholarship for a student majoring in gaming $8,116 or local history. The casino might also consider hosting students as $5,000 interns. Both of these actions will further serve to place Golden Gate $0 in a positive light in the community. Golden Gate Golden Gate Current Market Fair Market Realistic Goals and Objectives Share Share It would not be pragmatic to expect Golden Gate to redefine itself overnight. For Golden Gate to make an effective and lasting change, Fiscal Year Gross Gaming Revenue (in thousands) specific long-term and short-term goals should be set and revisited CHART 8 often. Well-defined, realistic goals and expectations with specific due dates will help Golden Gate progress forward and create itself a new Fiscal Year Gross Gaming Revenue (as a percentage) identity in the downtown Las Vegas market. 1% Golden Gate Current Based on data provided by Golden Gate, the casino is only Market Share generating about 45 percent of the gaming revenue that it should be (based on gaming position-determined market share). (See 100% Golden Gate Fair Market Share Charts 6-8.) A realistic objective for Golden Gate would be to at 3% least generate its fair share, or 2.9 percent, of downtown gross Las Vegas-Competitve Downtown Market gaming revenue. Action Plan for the Property as a Whole • Ensure consistency of service through a set of standard operation procedures (SOP) for all employees • Revisit the mission and vision statements to ensure that they are current and accurate • Assess current pay scale and adjust market wages • To practice causal marketing, link restoration program with a • Leverage the elements of the brand to drive more business (e.g. charitable association (and the network) to donate a “Original 99¢ Shrimp Cocktail,” Las Vegas historical site, intimate percentage of future revenues to a not-for-profit organization atmosphere, Fremont Street Experience) • Run specials (such as drink specials, match play, etc.) during • Update website to ensure it is user-friendly, and add more the Fremont Street Experience, when customers usually run features that would allow guests greater interactivity, such as outside to watch the show, to maximize shift differential making online hotel reservations and checking players club yielding point balances • Enlist historic society or UNLV history department to create and • Management should attend weekly or bi-weekly meetings; maintain a historic Las Vegas display in lobby (or multiple monthly P&L meetings should also be implemented to hold displays throughout the property), focusing on how Golden department managers accountable Gate fits into Las Vegas history • Since the Fremont Street Experience screen is sponsored by LG • Utilize players club data in non-traditional ways (i.e., data mine) and Golden Gate would like to put flat-screen TVs in its hotel to target customers for incremental visitation rooms, the casino may want to consider contacting LG for an advertising-exchange contract Action Plan for the Hotel • TV networks might be interested in a This Old House-like • All rooms should maintain industry standards program in which the casino and its rooms are renovated while • Target a lodging market that is willing and able to spend preserving historical quality (This Old Casino, perhaps?) money in both the hotel and casino

6 Casino Enterprise Management MONTH 2008 www.CasinoEnterpriseManagement.com gaming management marketing

• Bundle room, food and beverages into an all-inclusive style • Update cocktail uniforms to a more flattering flapper-dress style package to match casino theme • Maintain 24-hour housekeeping to enhance customer service • Theme floors such as Russian Hill, Knob Hill, Chinatown, The Golden Gate is a boutique property with enormous potential. Fishman’s Wharf, Cable Cars, etc., to give hotel a more authentic To bring the inherent promise of this niche enterprise to fruition, it is San Francisco feel imperative that all stakeholders commit to a defined ethos. • Add flat-screen TVs to the rooms and contract with a “pay TV” Management and employees alike must fully dedicate themselves to operation (e.g., LodgeNet Entertainment™) to provide an a feasible and comprehensive paradigm comprised of viable additional revenue stream strategies, objectives and tactics. • Add free Wi-Fi Internet for hotel guests or contract with a third- party ISP to create an auxiliary revenue stream for the hotel • Place hair dryers and ironing boards in all rooms for the convenience of the hotel guests 1 The May 2008 issue of Anthony Curtis’ Las Vegas Advisor reported that, “according to Stanford • Remove the difficult-to-maintain coffee pots from the rooms so Wong’s Current Blackjack News, only three casinos in Las Vegas now deal a single deck that pays 3–2 guests will purchase coffee from the diner instead on naturals and they’re all downtown: El Cortez, Four Queens and Western. For a while, Four Queens • Offer brand-name products from sponsors in rooms (e.g. had a sign out front that read ‘We don’t deal no stinkin’ 6–5 blackjack’” and that the historically Sealy mattresses, Linens-N-Things bedding, Bath and Body hardcore “Binion’s dice tables are again dealing 10X odds.” Works soap) 2 As reported in The May 2008 issue of Anthony Curtis’ Las Vegas Advisor, “It’s true, the price of the • Couple with a nearby fine-dining restaurant to offer guests shrimp cocktail has been raised to $1.99. There was time to make a switch at No. 1, but we didn’t. more experience (e.g., Andre’s) Here’s why. Although the price has been increased, you can still get the 99¢ deal simply by showing • Develop a lodging (time-share style) membership club or the GG’s (Club 1906) players card. The club is free and it’ll take you an extra few minutes (once) to explore the condo-tel paradigm join. Plus, currently you get a free deck of cards and 10X points when you sign up. As of now, we see • Install a POS system that will provide for universal tracking and no reason to switch the Golden Gate shrimp from the top spot.” computation of player equity Action Plan for the Casino Want to know more about the Golden Gate and how this case • Sponsorships for table game felts, proprietary slots and study came to be? Check out the accompanying travel log at giveaways www.casinoenterprisemanagement.com or contact David Paster • Develop corporate sponsors for players club sign-up and prizes at [email protected] or (702) 813-5062. (i.e., if a player signs up, he or she will receive a cross-branded gift card, for example $10 at Bath and Body Works) • Implement text message solicitation • Increase e-mail promotions • Configure gaming floor plan to maximize revenue through machine mix, placement, etc. • Continue to monitor slot play • Ensure table tracking accuracy • Revisit and, if necessary, revise comp policy from item to value based • Place attractive girls dressed in flapper-style dresses outside the doors to entice guests to come inside with a compelling call to action • Shift differentiation through creating lower minimum wagers during slow traffic times • Consider installing electronic table facsimile games • Create a positive environment for beginners through game lessons, offering Gaming International WIN Cards (www.wincards.com), and allowing dealers to serve as tutors Action Plan for Food and Beverage • Enact a regular employee training schedule to improve customer service • Increase communication with slot club regarding comp tickets • Seek out corporate sponsorships for liquor (e.g., Captain Morgan’s Spiced Rum for Cable Car cocktail) • Improve consistency of wait staff service • Maintain food quality • Add dining tables outside of Bay City Diner on Fremont Street to create a bistro feel to entice guests to come inside • Have an authentic San Francisco-branded coffee cart on Fremont Street that sells high-quality beverages and retail items such as logo coffee mugs www.CasinoEnterpriseManagement.com MONTH 2008 Casino Enterprise Management 7

Gaming Operations table games

THE ELECTRONIC TABLE GAME CONSIDERED AS A SLOT DEVICE By By David Paster

S ophomore year of college was challenging. It was a period marked with intense feelings of alienation, self-loathing and emotional regression. Oh, wait, that’s now. Sophomore year was awesome! None of my friends had made anything of themselves yet; there was not a single life-sucking lawyer, super-specialized plastic surgeon or other manifestation of a respectable professional amongst us. And, yes, the young woman I dated (or at least who had a restraining order against me) during this end of adolescence did become a psychologist specializing in teenage girl dysmorphia. One of the contributing factors that allowed sophomore year to rock was that I was the sole tenant of a dorm room. Freshman year, I shared a cinder block, neon-painted cube (like something out of pre- lithium Axl Rose’s bad dreams), less lush than a cell at Guantanamo Bay, with a fellow who “danced like nobody was watching” to Bel Biv DeVoe even when everybody was. In my campaign to score the lack of a roommate, freshman year ended with me plainly informing the Dean of Students that,“I simply don’t like people.”As indicated, my Vincent Gigante-esque performance reaped the sought reward. Being alone can be swell. Slot machines, including wacky multi-line devices,Video Poker and even old-time stepper reels, are traditionally devices enjoyed in a solitary way.The multi-player electronic table game, however, can be played head-to-head, but is often a communal endeavor like a traditional table game. Sweat Hog Vinnie Barberino Says, “I’m so confused!” What is this new-fangled contraption? Is the electronic table game more of a slot machine or a table game? Is it meant to be played alone like a slot machine in the corner of Copper Mine at the Gold Spike or in cahoots with others reveling — (or is it revealing?) — gaming enthusiasts who play Blackjack at the Palms on a Saturday night? As with The Kink’s “Lola” and Lou Reed’s “Candy,” there are some identity issues at play. According to some purists like Vic Taucer of Casino Creations, the presenter of seminars such as “Dealer as Entertainer,” and Ted Gottlieb of Win Cards, a table games education

68 Casino Enterprise Management NOVEMBER 2007 www.CasinoEnterpriseManagement.com gaming operations table games Image courtesy of Shuffle Master.

What is this new-fangled contraption? Is the electronic table game more of a slot machine or a table game?

advocate, having a live dealer is an integral part of the table gaming Four Winds Casino Resort in New Buffalo, Mich., (about 70 miles from experience.The (hopefully) personable relationship formed between downtown Chicago) has opened the world’s largest completely a friendly and competent dealer and a player is the driving force electronic Poker room.The room features 15 PokerTek Poker Pro® 10- creating the allure of the live table game experience. seat tables and four of the newer PokerPro Heads Up™ tables. A Others argue that the challenge of the game itself is what attracts game like Heads Up Poker is simply not economically practical to players to the table. After all, Blackjack has been a staple in casinos for deal in most traditional live-dealer Poker rooms. Because Poker is over a century. Like golf, it is an easy game to learn and a difficult one to player-banked and often allowed within Class II gaming scenarios master.Traditional slot devices offering video Blackjack, like Bally’s (e.g., at Indian Gaming properties), an electronic facsimile of Poker GameMaker or IGT’s GameKing, have existed for over a quarter of a does not necessarily benefit from the skirting of the spirit of the law century.While some games allow for player-friendly doubling down that electronic facsimile games like Blackjack, Craps, Roulette and and even surrender, the lack of paying 3:2 odds for a natural Blackjack carnival games do; that is, a live version of Poker is permissible and (adding 2.3 percent to the casino edge) and other limitations, like each does not need to be substituted. deal being independent (similar to a continuous shuffle scenario), have With the advent of numerous “carnival” table games (e.g., Let It hindered the development of this game to anything more than a niche. Ride, Caribbean Stud,Three Card Poker) and side bets (e.g., Galaxy Blackjack Blitz, developed by DigiDeal and distributed by PDS Gaming’s Lucky Ladies, Shuffle Master’s Royal Match 21) in the realm Gaming, arrived on the gaming scene nearly two decades ago and of Poker, interpretations of these proprietary and leased games are found its niche in Indian casinos that were not compacted to offer giving a chance to companies like DigiDeal and ShuffleMaster to “live”table games and traditional slot houses that did not tender the offer another means of play to gamers through electronic facsimiles. green baize experience. Properties like Harrah’s Cherokee Casino in Shuffle Master’s Table Master and Vegas Star products and DigiDeal’s North Carolina presented dozens of these machine, and B.B. Cody’s, a fully electronic games are in competition with devices produced by limited stakes parlor with less than 100 devices in Deadwood, S.D., Aruze Corporation, Novomatic Group Companies, IGT, PokerTek Inc. currently boasts one unit. Some larger casinos, such as the Rio and and TableMAX Holdings. Bally’s in Las Vegas, had a token machine to provide a low-stakes It should also be noted that there are some human- “table game” experience to their respective customers. dealer/electronic-input hybrid table games, such as Rapid Roulette Other table games of skill and chance, such as Craps and Roulette, by ShuffleMaster and Digital 21 by DigiDeal, that also have a niche have been interpreted into multi-position electronic (video) devices on the gaming floor.While some of the delaying mechanics of the (e.g., Innovative Gaming Corporation of America is Hot Shot Dice™), game (e.g., mucking chips in Roulette, shuffling in Blackjack, having as well as electro-mechanical devices (e.g., a physical Roulette wheel tray counts and fills) are eliminated and thus more decisions per sporting a mechanical ball release, with wager input from players via hour are allowed, there is, however, a lack of authenticity to the game electronic key pad). Again, these games have been most popular at when the croupier/dealer becomes more of a cog in the “machine” gaming facilities where, due to regulations or even cost restrictions, versus an active facilitator or ringmaster of the game.While the live table games are not feasible. hybrid live/electronic table games are communal, the experience is The labor intensive, relatively low-margin, house-banked game of resilient of pushing a button to have another live human pull a table Poker is also baring witness to the electronic revolution.The handle on the slot machine.The intimacy of reaching over another

70 Casino Enterprise Management NOVEMBER 2007 www.CasinoEnterpriseManagement.com gaming operations table games Image courtesy of Shuffle Master.

Whichever interpretation of the device results in the lowest taxes will be what the proprietor of the venue with the device will claim. living, breathing human being to place a Columns or Straight Up bet The crux of the matter is: How does a host gaming environment view in Roulette or touching playing cards with pitch Blackjack is lost with the electronic table game? Is a game like the historic Blackjack Blitz or the mechanization of the wagering process. ShuffleMaster’s contemporary Table Master™ Let it Ride one device or Lastly, it would be remiss not to mention the renaissance of five devices? According to ShuffleMaster’s 2006 annual report: “communal” slot machines, such as IGT’s Wheel of Fortune® Special In October 2006, we (ShuffleMaster) signed a multi-terminal video Edition™ Super Spin™ or WMS MONOPOLY Big Event™, that may lottery machine agreement with the Delaware State Lottery System. contribute to player acceptance in the U.S. market of communal Under the terms of the agreement, the initial placement consists of 54 electronic table gaming.The communal trend should also continue units, or 270 seats, of our Table Master electronic table game platform. with interactive bonusing and tournament play as an integral The Table Master units will feature a diverse mix of Blackjack and Poker- component of innovative (central) server-based downloadable based proprietary table game content, including Royal Match 21 gaming systems, such as the IGT sb™ product, which has already Blackjack,Three Card Poker, Let It Ride Bonus with 3 Card Bonus and proven itself at the always technologically innovative Barona Valley Dragon Bonus Baccarat. Ranch Resort & Casino and other locales. The Vegas Star multi-terminal gaming machines feature animated virtual dealers, touch screen player betting and a selection of public Got a New Position domain table games including Roulette, Baccarat and Sic-Bo.The Vegas A gaming position is roughly equivalent to the number of players Star has a modular design, which makes it easy to add additional play able to play a game at one time. A traditional slot machine meant for stations as terminal demand increases. Originally designed for the individual play is considered one gaming position; a Blackjack table Australian and Asian markets, where its market shares exceed 60 with six betting circles is considered to have six gaming positions. percent and 35 percent, respectively,Vegas Star has rapidly become an Certain states, such as Illinois, limit the number of gaming positions integral part of casinos within its two primary markets. Each Vegas Star per licensed casino establishment. Other jurisdictions, such as the configuration can accommodate up to 16 player stations and will limited-stakes gaming of Colorado, determine allowable gaming eventually offer all of our proprietary game content. space by utilizing a capacity ratio involving gaming positions and By noting Table Master’s 54 units or 270 seats (i.e., positions) and device footprints. Vegas Star’s “player stations”(i.e., positions), ShuffleMaster has

72 Casino Enterprise Management NOVEMBER 2007 www.CasinoEnterpriseManagement.com gaming operations table games indicated, as a gaming supplier, how it interprets its own device. But temperament, does not require benefits, and offers tracking of when these games are introduced to casinos in host markets, are they game play, including, but not exclusive to, decisions per hour, to be measured by units/devices or seats/positions/player stations? wager amount, and even (if programmed) skill level … to be associated with re-investment schema. Lastly, sometimes ‘Cause I’m the Tax Man personalities clash. With advancement in true customer Never minding the intricacies of how these devices will be regulated relationship marketing, there is little reason why, based on the in markets ranging from Indian casinos (with revenue sharing known player’s preferences via the insertion of a loyalty card, the agreements) to limited-stakes (Colorado, South Dakota) and limited- electronic “dealer” could not emulate a level of intimacy (e.g., a loss (Missouri) facilities, limited-capacity “riverboats” (Illinois), young Madonna, the singer-like character, for the New Jersey independent slot parlors (Pennsylvania), racinos, and good ol’ crowd or a matter-of-fact cowboy for the Deadwood gang). As fashioned non-restricted Class III gaming venues, what does the tax mentioned earlier, some purists believe that the dealer not only is man taketh? a mechanical operator of the game, but also an integral “touch While multi-property casino corporations like Harrah’s point” element of the gaming experience. Entertainment or MGM MIRAGE-Mandalay may argue one day that a Table Master electronic table game facsimile of Blackjack is a singular Player Migration (or Florida Has Gaming, Oi!) device just like a Double Diamond stepper reel or Deuces Wild Video Will casinos lose table play to electronic table games? Can a Poker machine, the next day, the conglomerate may argue that it is a facsimile handle upper-tier play? Just as it seems that no matter traditional table game. It all depends on the jurisdiction. how convenient they are, some individuals will never use an ATM If table games such as Roulette and Craps are not allowed via machine instead of going to the bank and withdrawing funds from compact, as is the case for Indian Gaming in “you betcha”Minnesota, a teller and some old-schoolers will never pay bills online, instead it is a moot point. However, if table games are allowed by regulation choosing to send a check via snail mail, a certain segment of the and a casino chooses to offer the facsimile, as in Deadwood, S.D., gaming population may never take to playing against a cruel, what elements, for taxation purposes, comprise the device? heartless machine (as opposed to a cruel, heartless live dealer). Obviously, whichever interpretation of the device results in the In contrast, for some players — especially the low-stakes one — lowest taxes (one position versus five positions, slot versus table electronic table games may offer an attractive, non-intimidating game tax structure, etc.) will be what the proprietor of the venue and reasonable wager-per-decision environment. What the true with the device will claim. significance of player migration is and will be has not yet been determined. What is known is that there are certain costs and Labor: Not Just for Teamsters Anymore benefits associated with offering table games in live, hybrid and Ironically, companies like ShuffleMaster produce fully electronic table electronic facsimile forms and migrating players to each variation. games, hybrid electronic/live table games with electronic wagering input and a live dealer like Rapid Roulette, and also sell and lease Here’s to Future Days proprietary traditional table “carnival games,” including Let It Ride Unlike ‘80s pop sensation the Thompson Twins, who have no and Three Card Poker, as well as live game components such as the future days, electronic gaming devices are destined to maintain a Ace and King shuffler products. Further, they are part of a triumvirate presence on contemporary and future gaming floors. Would “Rebel creating the Table iD™ system currently in development with IGT Without a Clue” Jim Stark conclude,“You, you say one thing, he and Progressive Gaming International (PGIC) that allows for live says another, and everybody changes back again! …You’re tearing (card-based) table game tracking. According to ShuffleMaster’s 2006 me apart!”? annual report: The question is: As non-traditional table gaming experiences [W]e will provide automatic card shufflers,card reading intelligent become increasingly advanced and prevalent, how will these partial shoes, card and chip sorters, and verifiers. IGT will provide back-end complements to traditional table games be considered in terms of table gaming management systems, including player tracking, patron regulation, taxation, labor considerations, player acceptance and the loyalty and rewards, as well as bonusing applications. PGIC will provide myriad other factors in host casino markets? RFID bet recognition, automated gaming chip tracking and payoff recognition. Each company will cooperatively interface its respective products into a combined product offering known as Table iD (formerly known as the Intelligent Table System™). Additionally, the arrangement also provides a framework for the cooperative development of new technologies and products that build on automated table management and real-time monitoring of player activity. It seems ShuffleMaster is covering all the bases under the assumption that one channel of game provision will not fully substitute for another. Analogous with the disdain of grocery clerks towards automatic DAVID PASTER check-out at the super market, dealers may fear electronic table Paster is a faculty member at the University of games or even the hybrid electronic/live game, but the experience Southern Mississippi College of Business and of having a live dealer to offer advice or even consolation does not owns and operates Yarborough Planning LLC, seem to be headed for extinction. an independent consulting firm.He has 10 On the other hand, while electronic table games are a pricey years of hospitality and gaming experience. capital investment, there are some definite managerial and Paster can be reached at (702) 813-5062 or marginal benefits. Like the workhorse slot machine, the facsimile [email protected]. does not need to take breaks, is of consistently even (if boring)

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