casinos and inflation

The lighter side... playing for entertainment, less concerned about "the math."
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notes1
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casinos and inflation

Post by notes1 »

i never comment on casino game strategy, not qualified. i see on other threads, and have noted myself, the value of our play value has diminished, at most casinos. the value of a $1.25 bet, is not valued as much at the casino, as it once was. they have done this by reducing pay tables and comps.

it is my experience, this began in earnest with the great recession, that began in 2008. in general, casino business tanked and there was a rise in the number of casinos, especially indian gaming.

but, we should also note that inflation plays a role. many businesses increase revenue or profitability by increasing prices or reducing costs. in 2020, one would need approx $124 to equal the same value as $100 in 2007. a player like myself, who has never increased his wager, i play the same $.25, 5 coin bet, as i did 15 years ago. certainly casino costs have increased, notably wages and employee expenses.

if i don't bet more and casino costs increase, there is no other way for a casino to compensate for that inflation, other than reduce paytables and other player inducements.

i can't go to a grocery store and expect to get the same amount of merchandise today as i did in 2007, for the same $100 spent.

Tedlark
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Post by Tedlark »

notes, when you talk of casinos not having no other way to compensate for that inflation are you thinking STRICTLY of casino operations? Is there a possibility that casinos may make up for this via the hotels, restaurants and other income generators attached to the casino?

notes1
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Post by notes1 »

Tedlark wrote:
Wed Apr 15, 2020 8:28 pm
notes, when you talk of casinos not having no other way to compensate for that inflation are you thinking STRICTLY of casino operations? Is there a possibility that casinos may make up for this via the hotels, restaurants and other income generators attached to the casino?
ted, i am not qualified to know the total finances of casinos. but, i would guess the vast majority of casino revenue comes from gaming. would not surprise me to find out, if some casino areas such as food and hotel, might lose money. in my own case (an insignificant sample size), i receive and use something north of $1k in comps. over the course of the year, i spend less than $50 in total out of pocket, on anything other than gaming, not counting tips for free beverages. could very well be wrong, but doubt that rental from boutique stores, food and hotel rooms that people actually pay for, covers all that the casinos give away.

i am certainly no shill for the casinos, but i just don't see how casinos can cover inflation, without increasing their hold. now, if american casinos had a the ability to offer online gaming nationwide, that would be a different story.

Vman96
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Post by Vman96 »

notes1 wrote:
Wed Apr 15, 2020 10:22 pm
Tedlark wrote:
Wed Apr 15, 2020 8:28 pm
notes, when you talk of casinos not having no other way to compensate for that inflation are you thinking STRICTLY of casino operations? Is there a possibility that casinos may make up for this via the hotels, restaurants and other income generators attached to the casino?
ted, i am not qualified to know the total finances of casinos. but, i would guess the vast majority of casino revenue comes from gaming. would not surprise me to find out, if some casino areas such as food and hotel, might lose money. in my own case (an insignificant sample size), i receive and use something north of $1k in comps. over the course of the year, i spend less than $50 in total out of pocket, on anything other than gaming, not counting tips for free beverages. could very well be wrong, but doubt that rental from boutique stores, food and hotel rooms that people actually pay for, covers all that the casinos give away.

i am certainly no shill for the casinos, but i just don't see how casinos can cover inflation, without increasing their hold. now, if american casinos had a the ability to offer online gaming nationwide, that would be a different story.
For the Las Vegas Strip, you'd be wrong for at least the last 20 years.

https://www.businessinsider.com/las-veg ... nue-2013-3

Convention business is HUGE for Vegas now and hotels tend to charge the max for big conventions because they know companies will pay.

However, you're probably right in some (even many) jurisdictions. The original question you have posed is something I've probably debated in my head for years. And this is the first thread I can recall explicitly made to discuss it. This is a GREAT example of a recreational thread starter.

I certainly have noticed that minimums haven't creeped up significantly, but certainly the house edge has creeped up.

For VP particularly, i think it's somewhat also due to people like me :censored: and others that are happy to educate those that enjoy VP. And I am certain your average VP player plays much better than they did 30-40 years ago.

So if you're going to keep quarter minimums (typical at bars for sure), but not increase it to 50c, then you're gonna have to lower the paytables to keep the revenue value up.

tech58
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Post by tech58 »

Great link Vman. Amazing, almost 2/3 of Vegas's bottom line is other than gambling.Who would've thunk it.
Which makes me wonder why they are continually upping the house edge?
Why not make play more attractive, to draw in customers, then vacuum their wallets with the rest?

New2vp
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Post by New2vp »

tech58 wrote:
Thu Apr 16, 2020 7:37 am
Why not make play more attractive, to draw in customers, then vacuum their wallets with the rest?
Because there are a lot of players who will still play with the less attractive pay schedules. Profit is about, other things equal, maximizing Players' Hands x House Edge, the product of the two. Certainly, if you get enough additional play by decreasing the house edge, you could increase profit. But there is no guarantee that, e.g., halving the house edge would not necessarily lead to more than a doubling of the amount of play.

If they increase the house edge by 30% and that would be met with more than a 30% drop in play, your supposition would be correct, but if play only drops only 20% or less, profit would indeed increase with an increase in house edge.

It certainly is not as simple as that, since a certain amount of play would no doubt bring in other revenue (like extra people who might gamble a few bucks or extra food and beverage purchases or even play on other casino games). But, take a look around this forum. Having a large house edge doesn't stop many from playing. And forums, which might overrepresent those who know what they are doing (even though you may question that of some posters), constitute a small portion of those who play.

notes1
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Post by notes1 »

vegas convention business, never even thought about that, i stand corrected. and, the 'clubbing' business with its overpriced drinks probably add to the bottom line.

but, i am guessing that type of business may be exclusively important to vegas and not the majority of other gaming properties.

FloridaPhil
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Post by FloridaPhil »

The Florida Hard Rock casinos do not host big conventions...so far. This is one of the biggest reasons Disney has opposed any new casinos in Florida. Disney wants this business to themselves. Some Florida counties have approved casino gambling. A large well funded group has purchased the old Miami Herald newspaper property near downtown. They have offered to invest one billion dollars in a large casino convention complex on the site. Political pressure and traffic concerns derailed this project.

The Tampa Hard Rock Casino is reported to be one of the most profitable casinos in the country. Their video poker pay tables are among the worst. There are so many tourists and seniors along the I-4 corridor that the casino remains profitable even with most players playing small. These two casinos have both just gone through a huge upgrade in their casino floor space and hotel. They are experts at giving players what they want. Not everyone in the world expects to profit from video poker. That is an idea that seems to be prevalent only on this forum.

As long as there are seniors with money to spend and the time to spent it, casinos will survive. What worries me more is the lack of young people in today's casinos. They are used to getting their entertainment for free. How the casinos are going to overcome that, I have no clue.

Chicagoan
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Post by Chicagoan »

There is an interesting formula related to paytables vs revenue.

Beau Rivage in Biloxi provides an excellent example. Over a very long period of time, Beau decreased its paytables to the point where most of their games are truly pathetic.

But, interestingly, as paytables decreased and games became unplayable, the only customers they lost were true players, those who understood paytables and their relationship to outcome.

As true players departed and their seats were taken by tourists and conventioneers, pressure on Beau to improve the paytables went away, because the current crop of players didn't know or, worse, didn't care. The casino remained, and remains, crowded.

What Beau learned, unintentionally I think, is that by driving away the experienced players, they could more than make up for this loss because now they can offer crappy, crappy games with paytables that their largely inexperienced players don't understand.

Now, the Beau formula only works in markets where there are enough wide-eyed tourists and conventioneers to mostly fill the seats of the departing good players. But the nutshell of the formula is that by decreasing your paytables to the point where you lose your steady, experienced players, you can in fact overcome the loss and perhaps even increase revenue and profits if you're in the right market.

notes1
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Post by notes1 »

i started this thread in the rec' section for a reason, was hoping to exclude the statistically insignificant number of players who actually assert that they make money, from playing at casinos.

to counter the increase hold by casinos, in part due to inflation, what i have seen is that players come to the casino, with a set amount of money they are willingly to lose. they play the best games they can find, but they still know the house has an advantage on most everything. they will play lower denominations, less than full play, slower, anything that will give them the most time to play and lose the amount they have allocated.

a casino visit that used to last 5 hours and cost someone $100, they may now get 4 hours. no more revenue to the casino, no additional cost to the player, just less time playing.

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