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May 25, 2019

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They’re back: Core gamblers are helping Las Vegas gaming industry recover

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The core gambler is returning to Las Vegas.

At least, that’s what Michael Lawton saw when he looked at February gaming revenue reported across Nevada last week. As senior research analyst for the State Gaming Control Board, Lawton noted an increase in slot machine win on the Strip, which rose 10.3 percent in February — the 10th gain in the past 12 months. To him, that was a significant trend in a rebound for the state’s casinos and illustrated who was helping drive it.

So who is this core gambler, and what does he or she mean to casinos and the Las Vegas economy?

Ask one of the major casino corporations on either side of the Strip, and they’re reluctant to answer. They often prefer to downplay profits and where they come from and instead stress the importance of conventions, shows, food and nightclubs as revenue producers. In other words, they generally would rather talk about revenue, which is defined as the money they take in, than profits, or the money they keep.

But Anthony Lucas, a financial gaming analyst at UNLV, said slot machines are what keep the resorts spinning. The devices are five times more profitable than table games, he said, and are easier to understand and play, meaning they draw more gamblers to them.

“The casinos make much more of a profit off slots and hotel rooms than they do off food and beverage combined,” he said.

The people playing those lucrative slot machines, Lucas said, are core gamblers.

“You have the high rollers and then you have everyone else,” Lucas said. “I would say the core gambler falls into that everyone-else category.”

The Gaming Control Board’s report showed slot win helped spur a 3.3 percent increase in overall gaming win on the Strip, compared with February 2011. Statewide, total win before taxes and expenses increased 5.7 percent.

In downtown Las Vegas, the clang of the slots rang even louder. Slots zoomed up 19.9 percent along Fremont Street, stoking a 13.6 percent increase in gross win.

Slots weren’t the only game producing more revenue for casinos, either. On the Strip, blackjack was up 24.2 percent, craps 19 percent and roulette 20.2 percent. Although baccarat was down 18.9 percent, the increases from other games more than offset that loss.

Lawton isn’t the only person in the gaming industry to recognize that the core gambler is coming back. The owners of Arizona Charlie’s are trying to capitalize on the trend in the casino’s new promotional campaign, which will highlight the casino’s games as opposed to its food and beverage offerings and other attractions. Monotone-voiced TV personality Ben Stein will narrate the ads.

Under the new slogan, “Built for the Gambler,” Arizona Charlie’s is pushing its customer service and increased reward options for people who spend hours playing mainly at its 1,150 slot machines.

“We’re basically a box with slots,” said Ron Lurie, executive vice president and general manager of Arizona Charlie’s.

Lurie, a former Las Vegas mayor, said the people who come to Arizona Charlie’s will stay three to five hours. They may eat at a restaurant, but the games are their entertainment, drawing primarily local residents and some bus tours. Arizona Charlie’s sends shuttles to neighborhood apartment and housing complexes to pick up customers.

“Our hosts not only know your name, they know what games you like to play. In the restaurants, we can tell you what you’ve ordered, so we know what you like,” Lurie said. “We want to build loyalty. People have a lot of choices, and we want them to drive past all the big boys and come and play with us.”

Lurie also worked in sales for slot manufacturer IGT when it introduced video poker more than 30 years ago. Video poker became immensely popular and, along with similar electronic games, is now included when casinos use the generic term slots.

“Video poker revolutionized gaming,” Lurie said. “It allowed people to participate in the games and make decisions instead of just pulling a handle.”

Lurie said the timing of the new campaign aimed at the loyal gambler isn’t a coincidence. Those are the players he’s seeing come back as the economy comes back.

That’s why Lurie pays attention to tourism numbers: Most of his visitors work in service industries, and this is how they spend their money.

“Those people who come in from California help my people do well,” Lurie said. “They get a little extra in their paycheck, some bigger tips, and they want to come spend it with us.”

Meanwhile, the Las Vegas Convention and Visitors Authority issued a report last week offering a counterpoint about the rise of the core gambler. The report, which offered a statistical snapshot of Las Vegas visitors, showed tourists’ spending for gambling has gradually dropped over the past five years.

That said, the report said visitors still gamble an average of three hours a day with a budget of $448, and it doesn’t distinguish between the games they play.

Clearly, though, a good chunk of that cash is going into slot machines.

“Not only do slots make more money than table games for the casinos, they have more mass market appeal,” Lucas said. “A VIP baccarat player might play with more money, but there are far fewer of them than there are slots players, who are more typical of the market.”

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