Introduction to Hospitality

1. Virginia Stipp Lawrence, MHM Introduction to Hospitality The Gaming Entertainment Industry

2. Gaming Entertainment Defined • We are just going to talk about one segment of the gaming industry, the casino industry. • The Casino business is now known as GAMING ENTERTAINMENT. • What other business are included in the gaming industry? • $500 BILLION is wagered or bet on games or races every YEAR!!! • In 1976, there were only 2 gaming jurisdictions in the US. How many do you think that there are now?

3. Gaming entertainment refers to the gaming business & all of its aspects. • What are these aspects? • What is next in importance to customers after the gaming floor? • Gaming revenues in Las Vegas have been declining for the last 20 years. • 32% of US households gamble in casinos. • 90% of US adults say that casino entertainment is acceptable for themselves or others. • Casino players tend to have higher levels of income & education & are more likely to hold white collar jobs. • Gaming entertainment operators are becoming more retail driven. • The average visitor stays in Las Vegas 3.7 nights, budgets $580 for gambling, spends $58 a night for lodging, $111 for food & drink, $63 on shopping, $27 on shows & $7 on sightseeing. • The average bet on table games is $12.

4. What is Gaming Entertainment? • 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

5. History of Gaming Entertainment • Las Vegas is second only to who as the favorite vacation destination in the US? • From the early 1940’s to 1976, Vegas had a monopoly on the casino business. • Back then, a slot machine or a blackjack table was enough to attract guests to the operation. • Legalization & control of gambling is a matter for state governments. • In November of 1976, New Jersey voters passed a referendum to allow gambling in their state. • 13 years later, Iowa legalized riverboat gambling.

6. The Size & Scope • As of 2000, there were four large casino operators: Park Place Entertainment, MGM Grand, Harrah’s Entertainment & Mandalay Resort Group. • Gaming entertainment pays more than $2 billion per year for gaming privilege taxes. • Casino gaming relies more heavily than most industries on domestic labor & domestic suppliers. • Casino gaming has created more than 700,000 jobs with wages of approximately $21 Billion.

7. Key Players • Mandalay Resorts • Casinos primarily in Vegas including the Luxor, Mandalay Bay and Excalibur • Harrah’s Entertainment • Operates casinos in major gaming markets including Reno, Lake Tahoe, Vegas, etc. Also riverboats. • Operates 700,000 square feet of gaming floors, 6,500 hotel rooms & 50 restaurants. • Hilton • With its $3 Billion purchase of Bally Entertainment, it is the nation’s largest gambling business. • Circus Circus • Owns 9 casinos in Nevada including the Excalibur & the Luxor. • MGM Grand/ Mirage • Operates the world’s largest casino/hotel, MGM. Mirage, Treasure Island, the Golden Nugget & the Monte Carlo. (MGM was just sold –2002) • Bellagio and Steve Wynn

9. New Players • Boyd Gaming • 10 gaming and hotel facilities in 4 states • Grand Casinos • Develops, constructs and manages land-based and dockside casinos • New York, New York Casino • Sands Venetian Resort

10. Positions in Gaming Entertainment • Hotel Operations • Much like those in the full-service hotel industry. • Rooms & guest services departments offer the most opportunities for students. • Dept heads have a large number of supervisors & more responsibilities. • F & B Operations • Some of the best foodservice operations are found in gaming entertainment operations. • Many career opportunities in restaurant management & culinary arts. • Most gaming entertainment properties house numerous F & B outlets.

11. Casino Operations • Casino Operations • There are 5 functional areas including: • Gaming Operations Staff • Casino Service Staff • Marketing Staff • HR Staff • Finance & Administration Staff • Retail Operations • Store Design & Layout, Merchandising, Sales Control. • Entertainment Operations • Some productions shows cost $30 - $40 Million to produce & require large production staff. • Stage & Theater Staff, Lighting & Box Office Management & Talent Management & Booking.

12. Casino Terms • Handle ~ total amount bet or wagered • Win ~ net amount retained by the casino – estimated at $48 billion/yr. • Pit ~ grouping of tables under one supervisor/manager • Markers ~ form used to extend credit to a guest • Player ~ a guest or client • Cage ~ Cashier cage where the chips and cash are stored • Fill/Credit Slips ~ Slips used to bring table banks to par

13. Casino Gambling • Slot machines and games of chance Slot machines – American invention Must pay off at 84% High volume machine may pay 98% Play maximum number of coins for greatest payoff Very addictive Where legal will be found everywhere Most profitable for casino Casino take relatively high Not much labor needed No dealers needed Change makers, maintenance

14. Games of Chance Blackjack Most popular table game Player with skill might have slight edge on house Poker Also involves skill, May play several different versions Baccarat High dollar game- Add up to nine Must bet on bank or player in advance Roulette Ball spinning around a wheel and landing on a number Craps or dice Fast, exciting, high stakes Hard to operate – takes 4 people Keno Like bingo but pick numbers in advance

15. Regulation To deter cheating and improve image • State gaming commissions • Sets and enforces rules • Quality – how managed and maintained Public space – follow zoning and fire laws • Credit procedures – varies • Game rules – must be published • Lay out – based on square footage • How many and what kinds of games can be played • Accounting procedures – cash flow records How, when, who collects cash and counts • Employees garments – no pockets or openings • Owners and employees must be licensed Owners very thorough check • Employees personal history

16. Casino Hotels • A casino with at hotel attached-many want this! • Most notable difference is organization and management • In casino hotel, rooms is subordinate to gaming • Casino manager will be equivalent to or above general manager • Control system different because of the amount of cash • Many checks and balances

17. Service operations • Entertainment and food important part of gambling • Casino hotels even more labor intensive (3 or 4 X higher) • Elaborate entertainment • Multiple dining facilities • All night service

18. Casino Staff Croupiers or dealers – conduct table games Fast and friendly Manual dexterity and math skills Screened for honesty and under electronic surveillance Average salary $30,000 plus tips Floor people Supervise dealers Enforce proper dealing procedures Resolve disputes Watch for cheaters Usually supervise 2-4 tables, Reports to pit boss Pit boss Manages larger group of tables Pays special attention to tables with high action Makes sure those placing large bets are happy Shift manager In charge of casino High pressure job – work six to eight hours $1M hour in bets, $1M profit per day

19. How do you Work in a Casino? • Employers are looking for people who have enthusiasm, those who can work well with people. This is the entertainment business, not a straight gambling business anymore. It's more like you're throwing a party for the people who are coming in. You've got to be good at entertaining.

20. The jobs [being a dealer] themselves are simple to learn. You can be a professional dealer after a month or two, making close to $100 a day at some of the new places. You just give the customers a lot of service, try to be funny, or amusing, or keep it light. • You start out at one of the break-in places off the Strip and work your way up to better-paying jobs as you gain experience. However, at some of the new casinos they are opening in other parts of the country, they train their own people [at the company's training school].

21. Dealer School • Most gaming schools offer flexible schedules, with day and evening classes. Admission requirements are also similar, with classes running from approximately four weeks for poker to about twelve weeks for craps. • Depending on the length of the class and game procedures being taught costs vary from $500 for a short session on blackjack dealing to $2,000 or more for extensive craps training. • All states mandate that enrollees must be at least 21 years old by the date they are scheduled to graduate from the dealer school. You must be 21 or older to work in Nevada's casinos.

22. Surveillance jobs are very low paying compared to other casino jobs. They only pay about $10–$12 an hour. It's a good job if you are going to school and want to study at night.

23. One of the best jobs to have in the casino is that of host or in casino marketing. That's the person who handles giving out comps, the free passes and extra perks

24. From dealer, the next step up is that of floorperson or floor manager. The interesting thing is if you take a job as a floorperson, even though it's a promotion, you usually are taking a cut in pay. Floor managers don't make as much as dealers because they are no longer getting tips. From floorperson the next step up is pit boss then shift boss then casino boss. It's usually a ten-year process to make it to casino boss, but definitely worth it if you want to make a career out of working in this industry.

25. Casino Customers • Grind players • Come on budget • When money is gone, they leave • Gaming a source of entertainment • High end players (high rollers and whales) • Chance to experience meaningful risk, big thrill • May bet $25,000-$500,000 at a time- Expect to suffer big losses at times • Minimize losses by negotiating with casino where they play regularly • Gifts, free guestrooms, free food • May be worth 50% of what they lost • May have personal representatives that negotiate terms in advance • Casino division reimburses rooms and food division for any rooms or food and beverage that are given away • Source of tension – price casino charged, guestroom inventory • Must save some for last minute arrivals • Don’t want to have empty rooms

26. Impact of Gaming • Economic • Tourism, Purpose of casinos • Employment opportunities • Increase state revenues • Attract visitors • May not necessarily benefit • Atlantic City not improved • Social • Part of culture through the ages • Often associated with dishonesty and immorality • Concerns • Environment • Smoke • Back rooms • Women • Drinking • Do you want this in your community? • Boils down to social vs economic

28. Technology of Gaming • The boundaries of casino technology are most visible in three areas: new gaming devices, visual surveillance systems, and customer data mining. • technical innovation in surveillance, both visual and behavioral

29. Visual Surveillance • . The first casino surveillance systems were completely non-electronic. Games managers merely observed players and dealers from catwalks over the action. • With the development of closed circuit television and video recording technology, though, surveillance was able to become both a way to detect malfeasance and to preserve a record of it for future legal action. • More recently, breakthoughs in digital imaging technology, including facial recognition systems, have pushed casino surveillance to the forefront.

30. Behavioral Surveillance • Behavorial surveillance or data mining is another area where casinos have excelled. • Harrah's groundbreaking Total Rewards program is still the model for other similar player cards programs • It enables casino personnel to not only track what players are spending, but chart what they potentially could be dropping in the casino. This lets them create parameters for their marketing efforts and, hopefully, allows them to get more mileage out of complimentaries.

31. Trends in the Lodging Industry • Gaming entertainment is depending less on casino revenue. • Room inventory is rapidly increasing. • Gaming entertainment will continue to be scrutinized by government & public policy makers. • Exceptional service quality will become an increasingly important competitive advantage for success. • Gaming entertainment will continue to provide management opportunities.

33. Updates and What is coming up • Homework-be sure to check the Assignments • Next Week • Dream Design Project • Travel and Tourism • Food and Beverage • Hotels and Lodging • Meeting and Event Planning