Transcript CHAPTER 1 INTRODUCTION - Web Hosting at UMass Amherst

Chapter 1
A PRELIMINARY
EXPLORATION
Casino Management
Kathryn Hashimoto,
East Carolina University
Hashimoto: Casino Management: A
Strategic Approach
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
INTRODUCTION
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Americans gamble 7 times more than they
purchase movie tickets
In 2004 that amounted to:
$29 billion
445 casinos in 11 states
350,000 jobs = $12 billion
direct state and local casino taxes > $4.7M
Hashimoto: Casino Management: A
Strategic Approach
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
The History of Gambling
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In Greek mythology, the oracle tossed the
dice and the gods expressed their wishes.
Gambling developed as a pastime for the
aristocracy.
In the Roman spas, betting on cards and
dice was convenient and helped to while
away the time.
Hashimoto: Casino Management: A
Strategic Approach
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Introduction to Gambling
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Gambling: to play or game for money;
anything involving risk or uncertainty.
Casino: a specially designated facility
(also called a house).
Note:
In this book, gambling discussions will be restricted to
legal forms of gambling performed in a casino.
Hashimoto: Casino Management: A
Strategic Approach
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
The Three Categories of
Commercial Casinos
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Land-based: built on land, like those in Las
Vegas and Atlantic City.
Riverboat: mainly on the Mississippi River,
through the middle of America from north to
south.
Native American: river-based or land-based;
distinguished by ownership.
Hashimoto: Casino Management: A
Strategic Approach
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Changing Attitudes Toward Gambling
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54%
of Americans said gambling was
acceptable for anyone.
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27%
said while gambling was “not for
them,” it was an acceptable form
of entertainment for others.
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81%
of adults agree that going to a
casino is an acceptable form of
entertainment for themselves
and others.
Hashimoto: Casino Management: A
Strategic Approach
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Why a change in attitude?
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Partially from the positive economic impact
that communities received.
Casinos pay taxes and fees far in excess of
other industries.
Taxes were used to cover funding shortfalls
for schools, road construction, and
infrastructure improvements.
Hashimoto: Casino Management: A
Strategic Approach
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
The other side of the table –
Who Are the Patrons?
Compared to the average American
adult a typical casino customer is:
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More educated; more likely to hold a white
collar job, have a higher income
More likely to engage in a variety of vacation,
outdoor experiences
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More likely to eat out
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Three times more likely to go to a resort
Hashimoto: Casino Management: A
Strategic Approach
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
The Social Acceptance of Gambling
A Cyclical Pattern
3. Gambling legalized
Appealing revenue source
Casinos develop
Jobs created
Taxes paid
1. Gambling accepted
Lotteries finance:
Puritans’ voyage
Jamestown’s roads
La. Charity Hospital
2. Government mandated stop
Negative impacts grow
Crime rates increase
Addiction & suicide increased
Hashimoto: Casino Management: A
Strategic Approach
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
External Forces
Cannot be controlled by the industry.
Have great impact on the way a casino does business.
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Economic: cited as improving economic environment.
Social: perceived effects on the social environment – rise in
crime, addiction, underage gambling.
Political & Legal: control the regulations and laws that
govern what a casino can and can’t do.
Consumer Behavior: the way people buy or spend time.
Corporate Culture &Technology: management teams took
over. Technological advances created a new way to make
management decisions.
Historical Development/Changing Competitive
Environments: as America grew, gaming grew.
Hashimoto: Casino Management: A
Strategic Approach
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Internal Environments
What is happening inside the casinos?
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Product: How does the casino make money?
Organization: How do the layers of the organization
change to meet the casino’s needs?
Pricing: What are the objectives in filling casino hotels?
Location & Transportation: How does location impact
buying decisions and how do people get from one place
to another in the casino property?
Promotions: What is the message the casino wants to
send?
Hashimoto: Casino Management: A
Strategic Approach
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Other Questions
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Should a new casino be a destination area or a day trip?
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What kind of people should the casino attract?
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Should a casino hotel use the hotel as an amenity?
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Should the food service operate as a profit center?
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Should government regulators try to prevent problems
before they arise?
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Do casinos create addicts?
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What is the difference between gambling in a casino and
gambling on the stock market?
Hashimoto: Casino Management: A
Strategic Approach
© 2008 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.