Americans love to gamble, there’s no doubt about that. Americans spent nearly $35 billion at casinos in 2010, which was an increase over 2009. Cities are lining up to open new casinos; The Hollywood Casino, in Kansas City, Mo., is scheduled to open very soon. There is a proposed casino project in New York City that, if approved, would call for a $4 billion casino to be erected. Many states are struggling with budget woes from the recession and need money to keep state programs, and their constituents are ready to give them the money via tax revenues from casinos.
Like many types of business, the casino gaming industry is a complex and intricate set of unique moving parts – and any casino executive will tell you, at no point does it become easy. Opening a casino alone is a struggle, for instance, residents of Foxborough, Mass., recently voted against a proposed $1 billion casino project. And there is no revenue faucet that can be opened wider, once a casino is up and running. Coming into December of last year, the famed Atlantic City was facing 40 months of consecutive drops in monthly revenue. There’s little doubt that the downward turn of the economy played a role in the revenue drops across the entire nation. A recent study affirms this, as the University of Las Vegas found that Las Vegas casinos are saddled with the most debt they have ever had.
There’s a big lesson to be learned here, both for casinos already standing and those proposed to be built. Groups planning to submit a casino proposal need to conduct thorough market research before officially submitting it. The proposed casino in Foxborough had one resident remarking that it was “tearing the town apart.” Market research reveals the prevailing sentiment that residents have and allows you to make an educated decision on opening a casino in that market or if the proposal will even get on the ballot. Bypassing market research could result in a strong backlash against the casino group if the city is vehemently against building a casino.
But, the struggles don’t go away once the casino is built. There are usually many gambling options in a city that allows it, and casinos must fight for every dollar they can. The best way to grow revenues is to ensure that each and every guest is happy. By utilizing casino guest surveys, a casino can find out what it is doing right, and more importantly, what it is doing wrong. Only the biggest casino cities can survive a 40 month slide. A downward spiral of that magnitude will erase most casinos from the map. Keeping guests happy is the first step toward keeping revenues high.
The gaming industry will never disappear, that much is certain. But, its health is of major concern for every casino executive right now. Proper research will help ensure that a casino is seen in a positive light and also help keep the lights on. If you want to gauge the health of your casino, contact NBRI today. Casino executives have relied on our casino research and benchmarking for decades. Contact Us using our online form, or call 800-756-6168 to see how NBRI can help you make informed decisions for your gaming establishment.