Big Boys Like Big Toys

Posted on: March 31, 2011

Allow me to pose a question to you: How successful in terms of gross gaming revenues do you think the poker rooms and sports books are to a casino? I’m sure unless you have a pretty good understanding of the casino industry, you’d think they were pretty good money-makers huh? WRONG. I myself just learned how wrong of a statement that is. As of December 2010, gross gaming revenues in Nevada were right around $10.5 billion. Slots accounted for about 60% of that, no surprise there. Card games (poker), race and sports betting revenues combined came in right around 3% of total GGRs. Ok, you might be saying to yourself, there are always small money-making segments in any business.

MGM Grand Sports Book

And don’t get me wrong, I don’t think that casinos could do without these facilities. In fact, a casino without a sports book or poker room would probably be seen as an incomplete property and would likely not do well. What mind-boggles me is the fact that these are always the places in the casinos that suck up the most money for the least return. Whether it be new renovations to compete with the guy down the street, or the fanciest televisions, or the newest technology, poker rooms and sports books tend to be very nice in terms of how much money they actually make for a casino. So, why would casinos, especially in a market like the one we are in now, spend millions of dollars on facilities that only drive 3% of revenues? I posed this question to a gaming professional,

Bellagio Sports Book

and the response I received was sad but true, “big boys like big toys.” Usually, and unfortunatly, this is a matter of ego. It’s a race to outdo the competitors. And for what? Poker rooms and sports books usually attract “wise guy” types – always looking for the best deal and ways to beat the house. These players generally speaking do not actually turn around and spend their money elsewhere in the casino, usually due to the fact that they think slot machines are for suckers and ladies. All of this for 3% of the revenue. Casinos are spending time cutting back in all areas due to the economy. Give away less money. Give away less comps, or in the more recent case of a Las Vegas casino – recind comp offers from actual gaming guests. However, all kinds of money is being pumped into remodels of poker rooms and sports books for 3% of gaming revenue. To me, this makes no sense.


1 Response to "Big Boys Like Big Toys"

[…] All About Erin Big Boys Like Big Toys […]

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About Me

This blog is devoted to the gaming industry news and information - keeping you up to date on the happenings in the gaming world. My personal expertise lies in event planning and entertainment in casinos.

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