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ECONOMIC TRENDS IN NEVADA

ECONOMIC TRENDS IN NEVADA. Lecture #3 Bill Eadington Doyle Andrews September 4, 2012. ADDITIONAL INFORMATION FROM GAMING REVENUE DATA. Tables: WIN/DROP; Slots: WIN/HANDLE PRICE = WIN/HANDLE Pricing strategy: Las Vegas Strip: High Pricing strategy: Reno: Low

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ECONOMIC TRENDS IN NEVADA

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  1. ECONOMIC TRENDS IN NEVADA Lecture #3 Bill Eadington Doyle Andrews September 4, 2012

  2. ADDITIONAL INFORMATION FROM GAMING REVENUE DATA • Tables: WIN/DROP; Slots: WIN/HANDLE • PRICE = WIN/HANDLE • Pricing strategy: Las Vegas Strip: High • Pricing strategy: Reno: Low • Important metrics: Net Income (Loss); Win per Unit per Day

  3. CATEGORIES OF CASINOS • Integrated Resort Destination Casinos • Limited Offering Destination Casinos; Remote Casinos • Commercial Casinos v. Tribal Casinos • Urban Casinos • Locals’ Casinos • Race Track Casinos (Racinos) • Convenience Gaming

  4. MARINA BAY SANDS SINGAPORE

  5. SKYPARK AT THE MARINA BAY SANDS

  6. INFINITY POOL AT SKYPARK, MARINA BAY SANDS

  7. FINANCIAL PERFORMANCE OF MARINA BAY SANDS: Q3, 2011 • Marina Bay Sands: • Revenues: • Casino: $651.9 m • Net Revenues: $792.4 m • EBITDA: $413.9 m • EBITDA margin: 52.2% • Operating Income: $315.4 m

  8. RESORTS WORLD AT SENTOSA Overhead view of the RWS site 10

  9. RESORT WORLD AT SENTOSA

  10. BELLAGIO AND CAESARS PALACE, LAS VEGAS

  11. PARIS LAS VEGAS

  12. THE VENETIAN LAS VEGAS

  13. ATLANTIS RENO

  14. Urban/Suburban Casinos

  15. LOCALS’ CASINOS

  16. WOODBINE RACEWAY AND SLOTS (near Toronto)

  17. FOXWOOD’S, LEDYARD, CONNECTICUT

  18. MOHEGAN SUN, UNCASVILLE, CONNECTICUT 1,176 hotel rooms; 6,780 slot machines, 392 table games, 22 restaurants

  19. CONVENIENCE GAMBLING

  20. LEGAL DEFINITION: GAMBLING • A gamble must include: Prize, consideration, and chance • Prize: Something of value to be won • Consideration: Something of value put at risk • Chance: Outcome is determined by an unpredictable event • A gamble must be associated with an incidental or discretionary activity • Negative expected value (?) • The risk inherent in a gamble is the prerogative of the gambler

  21. CLASSIFYING GAMES • Characteristics of games: • Alea (chance) • Agon (skill, adversarial competition) • Mimicry (play-acting) • Vertigo (dizziness) • Structure of games: • Paeda (unstructured, creative) • Ludens (highly structured, driven by rules)

  22. How would you categorize the following games or situations? Football; Jeopardy; Improv Theater; Hearts; Bridge; Slot machines; Charades; Poker; Golf; Sky Diving; taking drugs

  23. APPLYING THE ATTRIBUTES AND STRUCTURES TO CASINO GAMES AND OTHER WAGERING OPPORTUNITIES • Blackjack • Poker • Craps • Slot machines • Backgammon • Baccarat • Slapjack

  24. DISTINGUISHING BETWEEN GAMES AND GAMBLING

  25. DEFINITIONS OF GAMES • An activity providing entertainment or amusement; a pastime => A game of cards • A competitive activity or sport in which players contend with each other according to a set of rules => golf • An organized athletic program or contest => football • Mathematics. A model of a competitive situation that identifies interested parties and stipulates rules governing all aspects of the competition, used in game theory to determine the optimal course of action for an interested party. => Zero-sum sequential games

  26. Children’s and simple games: Examples • Tic-Tac-Toe • Hangman • Hide and Seek • Tag • Laser Tag • Paint-ball • Doctor • Submarine races • Spin the Bottle • Daisies

  27. Social Card Games • Hearts, Bridge • Gin, Gin rummy, Rummy • Fish, Crazy Eights, War • Cribbage, Casino • Solitaire • Concentration • Nertz, Oh Hell • Poker

  28. DEFINITION OF GAMBLING • To bet on an uncertain outcome, as of a contest. • To play a game of chance for stakes. • To take a risk in the hope of gaining an advantage or a benefit. • To engage in reckless or hazardous behavior: You are gambling with your health by continuing to smoke. • To put up as a stake in gambling; wager. • To expose to hazard; risk: gambled their lives in a dangerous rescue mission. • An act or undertaking of uncertain outcome; a risk: I took a gamble that stock prices would rise.

  29. RISK TAKING THAT HAS SIMILARITIES WITH GAMBLING • Speeding on the highway • Challenging a driver that cut you off on the highway => Will there be road rage? • Driving when drunk; Riding with a drunk driver • Drug use (for the first time) i.e. MJ, coke, H • Extreme skiing, rock climbing, paragliding • Unsafe sex (pregnancy, AIDS, STDs) • Cheating on a spouse, girlfriend/boyfriend, or significant other • Cheating on an exam • Smoking

  30. MOTIVATIONS FOR GAMBLING AND RISK TAKING • Adrenaline rush • Pleasure-pain anticipation • Recapture the euphoria of prior experiences • Controlling the moment • “Asking the Oracle” • Financial, prestige, one-upmanship • Importance of the prize • Beating the system • Finding the Edge, the Overlay, positive expectation • Entertainment value • Utility of the positive reinforcement of winning versus the costs of participation

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