Government Law & Policies

Asia: Seven Steps to Success

Call it the Macau/Singapore effect.

The initial success of integrated casino resorts in Singapore, coupled with the unprecedented growth in gaming revenues in Macau, has attracted the interest of government policy-makers in
countries throughout Asia. Several are now considering instituting new policies that will permit the expansion of casino gaming in their countries in the form of what is now being referred to as integrated casino resorts, and with it, both economic and tourism growth.

The success of Asian resorts has helped identify those factors that are critical to the success of any new gaming venue. Here are seven factors that are critical to creating a successful gaming policy that grows tourism, enhances tax revenues and acts as an engine for economic growth.

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Putting Problem Gambling in Perspective

The success of gaming development on Indian lands has allowed many tribes to explore the feasibility of replacing their aging, temporary buildings with new, amenity rich facilities. Despite the recession, tribes are moving forward with plans for future development. These developments, often in more accessible locations closer to population centers, often spark debate among various constituencies in the local community.

Any public debate on the pros and cons of casino development inevitably brings up the topic of problem gambling and its economic and social costs on the host community. Often these debates take place without a reasonable understanding of what problem gambling is, how prevalent it is and how significant the problem is when compared to other pathologies. These debates are frequently led by those who are morally opposed to casino gambling and it is that moral opposition that often clouds reasonable discussion. It is essential to clarify what problem gambling is, explore its prevalence in society, and compare its social and economic costs to other forms of aberrant behavior caused by what many see as more benign industries.

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10 Ways to Make Your Rewards Program More Successful

Casino player reward programs and the tools to identify and reward players have become the most important elements in casino marketing plans. Nevertheless, for most gaming operators, player reward program participation rates remain low relative to some of the most successful reward programs in the industry. Despite the importance of player reward programs, most operators fail to enroll the majority of players into their rewards program and give those players enough incentive to use their players club cards every time they place a wager.

When evaluating the success of player rewards programs, casinos often look at tracked or carded win as a measure of reward program effectiveness. Tracked win refers to gaming revenue that is generated by people using their reward cards while gaming. Tracked win tends to measure the usage pattern of the casino’s heaviest users (those people who visit most frequently and have the highest handle volumes). The tracked win rate refers to the ratio of tracked win to overall gaming win. Even so, most casinos’ tracked win rates are low, often hovering in the 25-35% range. Conversely, the most successful gaming companies, notably Harrah’s Entertainment and Station Casinos, have tracked win rates in excess of 80%. At the very least, a casino with a successful player rewards program should be enjoying tracked win rates in excess of 50%. Anything less indicates problems that may not be readily apparent to the gaming operator.

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Choosing a Competitive Business Strategy

When it comes to identifying an appropriate competitive strategy, casinos are no different than any other business. All businesses compete using one of two basic strategies: they employ a pricing strategy or a differentiation strategy.

Businesses that compete on price strive to offer the lowest possible price. They do so by reducing the costs of production in order to deliver a product or service at a price that is lower
than the competition. This strategy works well for commodities in which the products sold are undifferentiated. Wheat and oil are commodities and producers compete solely on price. Products that are clearly differentiated, through features or other unique elements, can command a higher price.

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The Casino Marketing Plan: Objectives, Strategies and Action Plans

Last month this column focused on the first part of the casino marketing plan: conducting a thorough situation analysis in order to understand current and anticipated market conditions, the competition and the customer. Having performed this analysis, a casino marketing team can now focus on the development of realistic goals and objectives, a strategy that will achieve them and the specific action plans that become the marketing department’s “to do” list.

Too often the marketing team loses sight of the property’s mission. Operating a tribal gaming enterprise is more than about making money. It is about improving the quality of life for tribal members, providing security for future generations, offering employees opportunities for growth, and being a responsible member of the community. The marketing mission statement flows from the tribal mission but is also based on current market conditions. Once the team has prepared its situation analysis it is ready to develop the marketing mission d1at will guide the department’s efforts through the next year.

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Cost-Effectiveness of Substance Abuse Treatment in Casino Hotels

One of today’s business realities is the prevalence of employee substance abuse – a particularly acute problem for the hospitality industry. Merely getting rid of substance-abusing employees is, at best, a cosmetic solution. Faced with labor shortages, growing “wrongful termination” litigation, and legislative mandates that promote a drug-free workplace and prohibit employee discrimination of recovering substance abusers, employers are investing in employee-assistance programs (EAPs) that provide substance-abuse treatment and permit the employer to retain an otherwise productive employee. Like any investment, a cost-benefit analysis such as that described in this article can provide a framework for evaluating the relative advantages of various types of EAPs.

Among the more tangible benefits of treating substance abusing employees is reduced turnover and absenteeism: expensive problems that otherwise might go unchecked. As a way of presenting our cost-benefit analysis, we compare the EAPs at two casino hotels which have quite different substance-abuse programs: the Mirage, in Las Vegas, and Merv Griffin’s Resorts International Hotel-Casino, in Atlantic City. In this article, we focus only on the programs’ effects on absenteeism and turnover, recognizing full well that there are many other benefits, both tangible and intangible, that accrue when employee substance-abuse problems are addressed by managers.

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