Chapter 11: Gaming Entertainment

1. Chapter 11: Gaming Entertainment

2. Chapter 11 Gaming Entertainment • Gaming Entertainment • Historical Review • Native American Gaming • Size and Scope of Gaming • Key Players • Positions in Gaming • Trends

3. Gaming Entertainment • The casino industry is one subset of the gaming industry • There are 445 casinos in 11 states including: • Land-based and riverboat casinos • Card rooms • Charitable games • Lottery operated games • Greyhound and horse races

4. Definitions • Handle: Total amount of all bets • Win: The net amount of spending by the customer • Cruise to nowhere: Gaming and entertainment on board the ship are the main attraction

5. Gaming Versus Gambling • Gaming entertainment: • Casino floor (gambling) • High-quality food and beverage • Hotel rooms • Live performances • Theme park, theme rides, and museums • Land-based and riverboats • Gambling: • Playing a game of risk for chance of making money

6. Who is the Guest? • 54.1 million U.S. households gamble in casinos (more than one-quarter) • U.S. households make 371 million visits annually to casinos • Casino players tend to: • Have higher levels of income and education • Are more likely to hold white-collar jobs

7. Historical Review of Gaming • Today, the precise origin of gambling is still unknown • There are Chinese records that date the first official account of the practice as far back as the third millennium B.C. • A public gambling house was legalized for the first time in 1626 in Venice, Italy • Romans were also gamblers • They placed bets on chariot races, cockfights, and dice throwing

8. Historical Review of Gaming • The gaming entertainment business has its roots in Las Vegas • From 1940-1976, Las Vegas was a monopoly for gaming • Las Vegas is rich with tales of Bugsy Siegel • During the 1970s, Atlantic City was in an impoverished state experiencing high amounts of crime and poverty; in an effort to revitalize the city, New Jersey voters in 1976 approved casino gambling for Atlantic City • The gaming industry has exploded from just two jurisdictions in 1976 to some form of legal gambling in 48 states • Only two states, Hawaii and Utah, do not permit some form of gambling

9. Native American Gaming • In California v. Cabazon Band of Mission Indians, et al. (1987), the Supreme Court decided that once a state legalized any form of gambling, the Native Americans in that state have the right to offer and self-regulate the same games, without government restrictions • Indian Gaming Regulatory Act (IGRA): • Provides framework for games • Defines different “classes” of gaming • Today there are 354 gaming facilities on reservation lands in 28 states, and Native American gaming has been the fastest-growing sector of casino gaming in the United States

10. Size and Scope of Gaming • As public acceptance of legalized gaming has grown, state and local governments have permitted gaming entertainment establishments to open • The gaming entertainment industry pays billions of dollars per year in gambling privilege taxes to state governments • Casino gaming companies pay an average of 12% of total revenues in taxes

11. Key Players • MGM Mirage Resorts: • Now controls half of the Las Vegas strip • Properties include: • The Bellagio • MGM Grand Las Vegas • The Mirage • Treasure Island • New York–New York • Boardwalk Hotel & Casino • Plus several others

12. Key Players • Harrah’s Entertainment: • Paired up with Caesers Entertainment • Now the world’s biggest casino operator • Operates 40 casinos in 3 countries • A $1.5 billion company, publicly traded on the New York Stock Exchange • Boyd Gaming: • 18 gaming and hotel facilities in 6 states

13. Positions in Gaming Entertainment • Hotel operations: • Much like the career opportunities in the full-service hotel industry, with the exception that food and beverage can be a division of its own and not part of hotel operations • Food and beverage operations: • High-quality food and beverage service in a wide variety of styles and concepts • Some of the best foodservice operations in the hospitality industry are found in gaming entertainment operations • Many career opportunities in restaurant management and the culinary arts

14. Positions in Gaming Entertainment • Casino operations: • Gaming operations • Casino service • Marketing • Human resources • Finance and administration

15. Positions in Gaming Entertainment • Retail operations: • Increased emphasis on nongaming sources of revenues • Gaming entertainment business demands an expertise in all phases of retail operations • From store design and layout to product selection, merchandising, and sales control

16. Positions in Gaming Entertainment • Entertainment operations: • Because of the increased competition, gaming entertainment companies are creating bigger and better production shows to turn their properties into destination attractions • Production shows have climbed into the $30-90 million range, with special entertainment venues built for superstars

17. Trends • Gaming entertainment is depending less on casino revenue and more on room, food and beverage, retail, and entertainment revenue • The gaming entertainment industry and lodging industry are converging as hotel room inventory is rapidly expanding • Gaming entertainment will continue to be scrutinized by government and public policy makers • As the gaming entertainment industry becomes more competitive, exceptional service quality will become increasingly important • The gaming entertainment industry will continue to provide management opportunities for careers in the hospitality business

18. The End