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June 18, 2019

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To reverse fortune of table games, stop squeezing the players, experts say



People place their bets on roulette during the opening of the casino floor at the Cromwell, formerly Bill’s Gamblin’ Hall & Saloon, on the Las Vegas Strip and Flamingo Avenue, Monday, April 21, 2014. The Cutting Edge Table games conference this week is focusing on reversing the fortunes of table games.

In the early '80s, a battle was fought and lost in the casinos of Las Vegas and Atlantic City. The result, said two experts at the Cutting Edge Table games conference being held at the Flamingo Las Vegas this week, was that slot machines won the high ground on the casino floor.

“1984. What does that year mean to us?” Michael A. Meczka, president of Meczka Marketing Research Consulting, said during a session titled "We Have Met the Enemy: It is Us!" “In 1984, across Nevada and Atlantic City, it was the year when slot revenue began to exceed table revenue.”

Corporate ownership may be more to blame for the decline of table games — and also diminishing gambling revenue in Las Vegas — than any generational shift if the arguments of Meczka and other speakers on Tuesday, the second day of the conference, hold any weight.

“The reality of life is slots have overpowered table games and if we’re going to get any regeneration of players we’re going to have to figure out ways better than we have now to improve the table game experience,” he said.

Meczka said the early '80s were pivotal because that was when corporations began investing in the gaming industry.

“In 1984, the number of publicly traded companies that were gaming oriented was less than 10,” Meczka said. “Today, it’s over 100. I’ve been in multiple meetings where the first order of business is not how to take care of the customer or what does the customer want. But it’s ‘what is the value of the stock’ and ‘how can we increase the value of stock.’ Somewhere along the line we lost the concept of customer service for the gaming patron.”

Rediscovering that concept could reverse the fortunes of table games in a way that marketing to millennials probably won’t, Meczka and other conference speakers said.

“Everyone's talking about millennials,” said keynote speaker Brian Decorah, president and CEO of the Firekeepers hotel-casino in Battle Creek, Mich. “But, when we look at it, our slot players are 62 and they have always been 62. Our table games players are 42. They have always been 42. We have not seen that change.”

Decorah made the point, as did Meczka in a conversation after his session ended, that millennials will age into gambling and table games as they mature because casinos offer a clean and comfortable entertainment option. But that can only happen, they said, if casinos return to offering customers good service and value for their gambling dollar.

But, they said, the exact opposite has happened.

“The reason why table games got stale in places is we got greedy ... not offering anything but $25 minimum limit tables and we had all these rules and that eventually caught up with us and started squeezing the player,” said a panelist during a session titled "Table Game Operators Roundtable."

Meczka and the co-speaker for his session Mike May, vice president of table operations for Pechanga Resort & Casino, said the squeeze was the result of a corporate focus on short-term earnings.

They said that focus first became apparent in the way table game were staffed.

“When you talk about corporate greed, what does it mean?” May said. “It’s labor, labor, labor.”

“When I started in the game, one person watched one craps game, one person watched one poker game and one person watched one blackjack game,” he said, speaking about the casino employees charged with ensuring the integrity of the game. “Now, one person watches eight games. The only way to squeeze from table games is to squeeze employees.”

“In Atlantic City, and here, they squeezed so much they put unions in,” he said. “Think about that. All those years without unions and the whole point of why unions came was that the (dealers) had enough. If you started as dealer in Atlantic City in 1984, the wage was $4 an hour. For a bartender, it was $6 an hour. If you stayed there, the dealer maximum salary was $12 an hour. For the bartender, it was $21.”

However, Meczka said, the reduction in staffing could only go so far.

“So the unions may have been a result of seeing how far we could squeeze the labor force,” he said. “Once management found they couldn't squeeze any more, once that took over, then the corporation’s management started to go after the gaming patron.”

And that meant increasing the casino’s hold, which in turn means decreasing the customer's win. The example May offered was the change in odds offered on blackjack games.

Traditionally, blackjack tables in Las Vegas offered 3-2 odds, which means that a customer who wins a hand with a bet of $10 would get $15. But with 6-5 odds the customer would only get $12 for the same bet.

“The thing I’m seeing as I walk through Las Vegas and I’m starting to see it trickle into our market in California, is the change of blackjack from 6-5 versus 3-2," May said. “The house advantage on percentage double-deck blackjack is 0.41. If you modify it to 6-5 that raises house advantage to 1.8.”

The increase in hold means customers lose faster, Meczka said.

“Time is everything,” he said. “The customer is either going to run out of time or run out of money. We just don’t give them enough time to play the game.”

Meczka pointed to the success of card rooms and smaller casinos in California as examples of how offering patrons a better win translates to success.

“You can talk about the Southern California gaming market, and customers there are having options. But they are going to the Commerce Club where they have 270 games,” Meczka said.

“And they are all table games. We went there on a Thursday afternoon at 2 p.m. and all of them were cranking. None were closed. Many people were making minimum bets of $1,000 to $5,000. That is business we could be getting here in Las Vegas or in other markets, but we took the option to turn it away.”

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