paying the salary to the dealers , because you weren ’ t making much money to begin with . It was already a kind of loss leader . And as time goes by , you end up with more and more labor expenses .
“ So when you look at the bottom line , they just think they have to cut things — particularly after Covid . Places like Silver Nugget and the Lucky Club got rid of all their tables . There ’ s just no reason to run a little gaming pit . At some point you just have to think , well , this isn ’ t worth it .” Wagner says the constant search for $ 5 minimum games is nothing new . “ People have been looking for a $ 5 game since 1965 when I got into business ,” he says , “ and they ’ re still looking for a $ 5 game . But you ’ ve got to keep up with inflation , and one of the things the casinos have done , they ’ ve compressed the spread . So you see that $ 25- $ 500 limit in a lot of these casinos , which controls their exposure to a good player or even a lucky player .”
SLOT SENSATIONS
In the past 20 years , the hold percentage on slots has risen dramatically in Nevada and in jurisdictions around the country that report such numbers . In Nevada , probably the loosest state in this regard , hold percentage has risen from 5.5 percent to 7.2 percent . But this could be deceiving , according to Jossel . Downtown Las Vegas is now about even with the Strip in this regard , when 20 years ago the casinos in Downtown were very loose .
“ If you look at the mix Downtown ,” Jossel explains , “ video poker is a fraction of what it used to be . At the Plaza today , video poker is holding 1 percent to 3 percent depending on the game and where it is . So when you remove 80 percent of the video poker games that used to be Downtown , whereas the Strip hasn ’ t had that many to remove , I don ’ t think that Downtown ’ s hold is worse than the Strip as some people are reporting . It ’ s just that the mix of games Downtown has changed .
“ And so you have way less video poker than used to be down here , which brings me onto my second point . You can pretty much see where all the money ’ s going . It ’ s all this new SLU product that Aristocrat , Light & Wonder , and IGT are coming out with — their Buffaloes , their Dragon Links and the like . What you ’ re seeing with those games is people are chasing much longer , playing much longer , playing more , and Downtown never had those games back in the day . Now you ’ re replacing video poker with those unbelievable new slots , and people love it .”
Mahaffey says the rules at the Plaza are relatively player-friendly because Jossel understands the gambling psyche .
“ He is pretty receptive to players , and he at least asks more questions about it ,” Mehaffey says . “ Sometimes I ’ ve had discussions with these executives , and they ’ ll blow me off or they ’ ll just try to take advantage of me . But I think ( Jossel ) genuinely wants to hear all the ideas and then bring it to his management people and have them decide on what ’ s best .
“ He has the best video poker games in all of Las Vegas . He still has one machine of full-pay Jokers . It ’ s the only one , because there ’ s no more anywhere else . Just like there ’ s no more full-pay Deuces .”
Zender explains about a recent Las Vegas client who brought him in to evaluate the table games . At the same time , he was shown the hold percentages on the slots , which were far lower than other Strip properties .
“ Their floor average on slot machines was about 6 percent ,” he explains . “ I told them you ’ re not a locals casino . While you do get a lot of local play , you also get a lot of Strip action . You should have your floor percentage higher . They had a lot of video poker machines , but no penny machines . I showed them at the time , the Strip was 8 and a half percent . I can maybe fine tune your table games and I ’ ll make you a couple hundred thousand dollars more next year . But if you pay attention to this and bring that floor percentage up , this will make an additional million or two next year .”
One of the more disturbing aspects of today ’ s slot section is advantage
“ You certainly can ’ t deal a $ 5 , 3-2 blackjack game and make any money off it these days . Especially on craps or roulette , because you need more than just that one dealer to run it .”
— Vegas Advantage owner and influencer John Mahaffey on how labor costs have phased out low-limit games
players scouting progressive jackpots and then monopolizing all the machines when they are in a positive expected value mode .
“ I think they ’ re probably the scourge of the industry ,” says Jossell . “ I think it ’ s terrible for the casinos . There ’ s an argument of , why do you care ? That jackpot will pay out whenever it ’ s paying out . Who cares who wins it ? The answer is because it ’ s taking away the thrill and excitement from the recreational players . There ’ s no way to really stop it , but I do believe that casinos need to be smarter about identifying them and then making sure they ’ re not getting free play and other offers . It ’ s a very ugly thing that ’ s come up due to the internet and making this information so readily available .” Mahaffey can see both sides of the advantage play ploys . “ I don ’ t think the casinos really care if somebody educated comes in and and beats them on a big progressive jackpot ,” he explains . “ What they don ’ t like is team play . I can see their side because it ’ s everybody ’ s money in there and if you come in and hog all the machines on a team play effort , the people who contributed to the jackpot have no opportunity to get it back . Whereas these players had nothing to put into it . If they hit the jackpot , they ’ ll leave with it and you ’ ll never see that money again .”
MARKETING ADVANTAGE
Can a casino use better odds , lower hold percentage and more innovative promotions to succeed ? Wagner says the time is right .
“ If I were younger and had access to several millions of dollars ,” he says , “ I ’ d start an all-electronic casino with electronic table games and a really low hold percentage . I ’ d advertise it for real high-frequency play to make sure we ’ d have a lot of volume . Sometimes you have to build a church for Easter to get the volume , but when you don ’ t have the people a smaller place is better .
“ Vegas , with all these increased rates , we ’ re as expensive of a food and beverage proposition as San Francisco or New York in many cases . And people from those cities expect to pay for parking . But if we have a recession or we have some tough times , you ’ ll see them quickly move to discounts , get rid of the resort fees , cut the parking rates and use a lot of tools to give to the customers a reason to visit .”
While Jossel says the Plaza has a great program , he believes it ’ s just an extension of the Downtown Las Vegas philosophy .
“ Downtown has always been known for having better gaming conditions ,” he says . “ And it ’ s something we wanted to preserve . We ’ ve recently added a single 0 roulette table . That ’ s probably the most aggressive thing we ’ ve done . And why ? Because I want Downtown to be known for a good gamble . I want people to come here and feel like their money lasts longer .”
16 Global Gaming Business SEPTEMBER 2024