Interesting Article

[DaBurglar]

The November 17th show of "Gambling with an Edge" with Dennis Krum I think was one of the best episodes I have listened to in quite some time! The shows pretty much puts the nail on the head on why casinos and gambling in particular has gone south the last 10 years, why video poker tables are so tight now, and it has nothing to do really with losing money, but bad thinking! etc etc etc etc etc.......................................The reason for this goes back to the early 2000s......around this time the "old guard" in most Vegas/Reno and AC casinos were retiring:  BAsically the people who BUILT the business through the late 70s, 80s and oversaw the launching of the MASSIVE expansion and re-inventing of the 1990s.....by 2002-2003 many of the old school customer oriented managers/casino bosses/marketing bosses were getting out, and replacing them are a lot of know-nothing, clueless MBA clones in their 30s and early 40s, who never worked very hard for anything and have no people skills.   The fact that by the mid 2000s almost ALL the major casinos in the big markets like Vegas, Reno and AC were owned by publicly traded corporations, and there was a WHOLE bunch of CONSOLIDATION taking place right up to the Recession of 2008.......With this corporate mentality came a lot of decision making and strategy that was really really BAD for players and customers, mainly because it was being made by people with no real understanding of what makes Casinos successful and dynamic.....you had a lot of the "Ivory Tower" type decision making happening by 2007, and players like US simply saw almost ALL of the "little" things that made video poker fun and attractive, and casinos in general (like the really good players club programs and features), just  disappeared or were greatly curtailed.The Corporations, answering to stock holders and to people who themselves were clueless about the casino business, were now prioritizing QUARTERLY results and meeting "market projections and benchmarks" instead of (as other emphasized) prioritizing getting and keeping the casinos FULL of people who were PLAYING (thus maximizing throughput, or CASH$$)......Every single department in the casinos owned by the BIG public corporations NOW had to show either a profit or significant cost savings.....(everyone from Housekeeping to Food & Beverage, to the Gift Shop and Purchasing all the way through the casino(s).......)  This violated the old adage and model where the whole purpose and focus of a casino was on the GAMBLERS and the GAMBLING and everything else supported or was secondary to this......you can kinda see how deviating from this old model makes for a casino that is NOT player friendly.But most of all, the main reason WHY games like VIDEO POKER were downsized, downgraded or just plain eliminated the last 10 years or so is the current CASINO MANAGEMENT paradigm (priority really) of focusing on QUARTERLY results and meeting QUARTERLY GOALS which tend to revolve around CUTTING COST more than increasing REVENUE!    Most of your managers today are obsessed with their BONUS(es), and since the casino market has been saturated and mature for some time now, the ONLY way for your typical unimaginative casino executive to BOOST the current quarter's profit is to SLASH costs (or at least that is the assumption and belief on their part.)     So they target the obvious games like Video Poker as an easy way to reduce short term COSTS (remove the best VP machines, or SLASH the paytables and thus ensure the machines payout less and less).....I have long bemoaned and HATED this type of short term thinking that exists not only in casinos but in MANY different industries and business.   When I consult I often find myself at loggerheads with executives and management types who are SLAVES to the current fiscal quarter's numbers, because they "JUST GOTTA GET THAT BONUS 'cuz THE WIFE IS EXPECTING IT......or they need it to pay for something they should not have bought in the first place (or to simply cover a lifestyle they cannot afford) etc etc.You get the point(s).......

[Tedlark]

This of course is just your opinion, right?

[DaBurglar]

This of course is just your opinion, right?Sure....based on the EVIDENCE that I personally have seen and observed.I doubt you read my entire post, you probably gave up (like you usually do) around the third or fourth sentence......but if you had read it all you would see that I am in total AGREEMENT with all of the previous posters (including the "EXPERTS" who formed the basis of this whole thread, namely (your hero) Mr. B. Dancer and his guests on his radio show....)     So if you are going to nitpick and pointlessly disagree or mock, do it with them too......

[ko king]

   This of course is just your opinion, right?

Of course this is just my opinion also, but I agree totally. In my opinion it's this very thing that pretty much killed Tunica, while Tunica casinos are still present they're nothing more than a watered down version of what once was and what could have been. Tunica was booming and growing, businesses were moving into the area, hotels popping up to catch the overflow, shopping centers, restaurants and so much more. There was so much traffic on 61 highway they had to build other roads to relieve the congestion. You could get away from the casinos and go for a helicopter ride, jump on a $10 shuttle for a tour of Memphis or catch the same tour bus and spend the day at Beale Street, play a round of golf for almost nothing or spend the day shopping at the outlet center. I'm pretty familiar with the present day corporate mentality and have never been a fan of it, in fact I find it quite disgusting and greedy. It used to be about taking care of the customers and keeping them happy, if you did that well everything else took care of itself, customer base grew and profits did also, it was a beautiful thing to watch when practiced to perfection. All that was replaced with a perverted and ignorant business model that focused only on daily and quarterly profit margins where customers became more of a target other than a real person. My first taste of what has become common practice took place years ago while working at a very high volume successful business that had 356 other branches all over the U.S.. We had some of the best people in the business, we knew our products and we knew how to take care of and keep our customers happy, every year our business grew and revenues increased. All that changed when a group of young T.T. graduates rolled in with their brand new business degrees, the ink on their degrees hadn't even dried as of yet and not a single one of them had spent a day in the actual business world. Right off the bat it was made clear they would be in charge because they had a new and better way to do business, we had all become idiots overnight. I remember sitting in the meetings and listening to these freaks and geeks and being amazed by what they were saying because it went against everything I had ever been taught or learned on my own. I can longer remember exact numbers or figures but I can still get in the neighborhood. We were doing around $2 million per month at set profit margins for customers based on their buying habits and needs. The corporation had been following this business practice for over 40 years, employees and customers were treated well and it paid off. The new business model would be to double profit margins on all customers and cut back on all the goodies we offered as incentives or rewards to employees and customers for being loyal. When I questioned this idea because I knew we would lose business and customers it was explained to me like I was a complete moron and maybe I was because it seems to have taken off and accepted as the norm today. The answer or question was, would you rather do $2 million dollars per month with 20 employees and 200 customers at a 15% profit margin on products or do $1 million dollars per month with 10 employees and 100 customers at a 30% profit margin on products. On paper the T.T. graduates were right, less employees, less overhead, just less, less, less would equal a higher profit margin. In other words the new business philosophy was, what's the least we can provide and still maintain or increase profit margins. I didn't last long there and moved on to start my own small business doing things my way not their way. I'm not certain as to what became of that corporation, I heard they slowly wasted away until they were bought up by another huge corporation that has over 1K offices throughout the U.S. and little to no competition left. In my opinion that's exactly what Tunica has done, followed the exact same business model and it's now taken it's toll on them. Customer base has eroded revenues are dropping every single year and there's nothing left to cut. Now all that's left are closed down outside enterprises, crumbling roads and casinos that are clinging to their lives. In the end I suspect there will be maybe four casinos that can survive, all the others will dwindle away. What's the least we can provide and still maintain or increase profit margin has not only backfired on them but all the other businesses that depended on them to do the right and smart thing.

[Tedlark]

[QUOTE=Tedlark] This of course is just your opinion, right?Sure....based on the EVIDENCE that I personally have seen and observed.I doubt you read my entire post, you probably gave up (like you usually do) around the third or fourth sentence......but if you had read it all you would see that I am in total AGREEMENT with all of the previous posters (including the "EXPERTS" who formed the basis of this whole thread, namely (your hero) Mr. B. Dancer and his guests on his radio show....)     So if you are going to nitpick and pointlessly disagree or mock, do it with them too......[/QUOTE]

DaBurglar I try to read most of what you write even though sometimes it does get a bit challenging. Even with: my high I.Q.; my Mr. Spock like logical abilities; my dead on street smarts; my intuition, et. al., I too have my limitations.

When you post factual evidence gotten from casinos where they say what or how they did some of the things you mentioned, then yes: it is only your opinion. Get something in writing from a casino stating trhey made changes and I'll change my opinion, but not a minute sooner. Just because you said so.....

[BobDancer]

I discovered I had a major difference of opinion with Dennis Krum as he presented his arguments on the radio show. That opinion was largely formulated AFTER the show as I got my thoughts in order.I started to write up how I disagreed with the intention of posting it both here and on vpFREE. It turned out to be 900 words. Since I have committed to creating an article/blog of approximately-that-length every week, I decided to post it in my Tuesday column on the LVA site. I have a couple of articles already written for that, so this one will appear December 15.It wouldn't surprise me that this thread starts right up again at that time.Bob

[Eduardo]

[QUOTE=Tedlark]   This of course is just your opinion, right?

Of course this is just my opinion also, but I agree totally. In my opinion it's this very thing that pretty much killed Tunica, while Tunica casinos are still present they're nothing more than a watered down version of what once was and what could have been. Tunica was booming and growing, businesses were moving into the area, hotels popping up to catch the overflow, shopping centers, restaurants and so much more. There was so much traffic on 61 highway they had to build other roads to relieve the congestion. You could get away from the casinos and go for a helicopter ride, jump on a $10 shuttle for a tour of Memphis or catch the same tour bus and spend the day at Beale Street, play a round of golf for almost nothing or spend the day shopping at the outlet center. I'm pretty familiar with the present day corporate mentality and have never been a fan of it, in fact I find it quite disgusting and greedy. It used to be about taking care of the customers and keeping them happy, if you did that well everything else took care of itself, customer base grew and profits did also, it was a beautiful thing to watch when practiced to perfection. All that was replaced with a perverted and ignorant business model that focused only on daily and quarterly profit margins where customers became more of a target other than a real person. My first taste of what has become common practice took place years ago while working at a very high volume successful business that had 356 other branches all over the U.S.. We had some of the best people in the business, we knew our products and we knew how to take care of and keep our customers happy, every year our business grew and revenues increased. All that changed when a group of young T.T. graduates rolled in with their brand new business degrees, the ink on their degrees hadn't even dried as of yet and not a single one of them had spent a day in the actual business world. Right off the bat it was made clear they would be in charge because they had a new and better way to do business, we had all become idiots overnight. I remember sitting in the meetings and listening to these freaks and geeks and being amazed by what they were saying because it went against everything I had ever been taught or learned on my own. I can longer remember exact numbers or figures but I can still get in the neighborhood. We were doing around $2 million per month at set profit margins for customers based on their buying habits and needs. The corporation had been following this business practice for over 40 years, employees and customers were treated well and it paid off. The new business model would be to double profit margins on all customers and cut back on all the goodies we offered as incentives or rewards to employees and customers for being loyal. When I questioned this idea because I knew we would lose business and customers it was explained to me like I was a complete moron and maybe I was because it seems to have taken off and accepted as the norm today. The answer or question was, would you rather do $2 million dollars per month with 20 employees and 200 customers at a 15% profit margin on products or do $1 million dollars per month with 10 employees and 100 customers at a 30% profit margin on products. On paper the T.T. graduates were right, less employees, less overhead, just less, less, less would equal a higher profit margin. In other words the new business philosophy was, what's the least we can provide and still maintain or increase profit margins. I didn't last long there and moved on to start my own small business doing things my way not their way. I'm not certain as to what became of that corporation, I heard they slowly wasted away until they were bought up by another huge corporation that has over 1K offices throughout the U.S. and little to no competition left. In my opinion that's exactly what Tunica has done, followed the exact same business model and it's now taken it's toll on them. Customer base has eroded revenues are dropping every single year and there's nothing left to cut. Now all that's left are closed down outside enterprises, crumbling roads and casinos that are clinging to their lives. In the end I suspect there will be maybe four casinos that can survive, all the others will dwindle away. What's the least we can provide and still maintain or increase profit margin has not only backfired on them but all the other businesses that depended on them to do the right and smart thing. [/QUOTE]

Can I buy you a keyboard with the Enter key?

[BobDancer]

I mentioned I would publish a disagreement with the Dennis Krum philosophy that he expressed in the article and on the radio show.I originally thought it would publish December 15. Instead it will publish December 1 because I decided the article I had previously written for December 1 wasn't good enough.I'll be out of circulation (on a long cruise) when it publishes, so if any of you strongly disagree on this forum with my written opinion, I won't respond to it until mid-December at the earliest.Bob

[alpax]

I was expecting an article today, now I know the reason.

Krum's view on the progressive is definitely a good argument. I will read what you have to say.

[DAAnMAAn]

First, I read dancers article on his disagreement on Dennis, I don't think it's a 100% disagreement, but one Nevertheless (is dancer stuck with win/loss thinking or become one of "them"?) hym.
Obviously offering a video poker game, or any game, with huge ER advantages at high denominations to players would eventually not be sustainable or profitable. But slight edges? Different story.
Hard to know for sure without a true test like putting in 10 machines with 10/6 JOB (100.6% ER) and 10 machines with 8/5 JOB (97.3% ER) and tallying it up at the end of X period of time. There is so much uncertainties with the numbers. But my suspicions are even though on the surface 8/5 will bring more revenue for the casino, it's actually 10/6 because of 10x plus in the amount of drop, handle, business.
We all know the royal is an important part of ER, about 1.5%, also perfect play which except dancer few people play, play a part in ER...Mike S. From wizard of odds said once up to 5% difference in ER due to errors. Plus variance of the game.
We can all agree ER is a theoretic, not an actual. So...
There are a lot of assumptions in the article of all these perfect playing vp poker beating the game every time when we know it's just not true. If I have, say, 10 machines offering 10/6 $1 JOB being played 24 hrs per day with slow players, say 1k hands an hour, that's $10,000 coin-in an hour, or $240,000 a day. Not all those players play perfect or hit royals. But let's say one Royal is hit per 40k hands, that's 6 royals for th day. Without the royals, ER drops from 100.6% for the game to 99.1%. Minus average errors, we will just say another percent to 98.1%. And variance fluctuates so who knows.
On the other hand, I have 10 machines of 8/5 $1 JOB, get a quarter of the play that I got in 10/6 JOB because the paytables is so much worse, so not as popular obviously, so get $60K coin in, get say 2 royals in the 24 hr period. Get more losers, less winners. And on paper an executive might say, wow, look how much better we are doing on 8/5 job, but not realizing the coin in, drop, handle is a tiny sample. Or say look how little business we are doing in vp, let's just throw it out.
While on 10/6 job it shows more winners, but a huge increase in drop and handle, they may actually and positively make more
Money. That is, making more percentage on a smaller pie, say 40% of 60k,
Or less percentage on a huge pie, 20% of $240k...which model makes the Bucks? Plus happier players, it's a win/win all the way around. But still a tough sell...how do u convince operators that by having more winners, they make more money?
I'd love to see a smaller operation give it a whirl. Offer slightly positive games at the .25c to $1 level, and see what develops over the months. Because I think beyond the conjecture and theoretical, the only real way to find out is to try it.
I don't hold much hope at the bigger casinos, they are still stuck in they win, we lose thinking.