Casinos Struggle, But Poker Rooms Stay StrongSome Rooms' Revenue Even Higher Than Last Year's Totals |
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"We are looking at the biggest financial crisis since the Great Depression, and the biggest economic crisis we have had in the United States since the early 1980s."
That’s what Scott Brown, the chief economist with Raymond James and Associates, told a reporter from Reuters earlier this month.
The recession is hitting everyone, but especially the people of Las Vegas. In every month of this calendar year, Nevada casinos earned less than the same month of last year. In September, overall revenue was down 5.4 percent compared to September 2007.
With less money coming in, many casinos have had to make cuts. Both Harrah’s Entertainment Inc. and MGM Mirage have made layoffs both in their Las Vegas casinos, as well as their other properties around the world. Harrah’s owns Bally’s, Caesars Palace, the Flamingo, Imperial Palace, O’Sheas, Paris, and the Rio in Las Vegas. MGM owns MGM Grand, the Mirage, Bellagio, Circus Circus, Excalibur, Luxor, Mandalay Bay, Monte Carlo, and New York-New York in Las Vegas.
“Things are getting really tough,” said Jim Pedulla, the poker room manager of Caesars. “In September, the consumer put both hands in his pockets.”
But while the casinos are hurting, most of their poker rooms are surviving, and in some cases even flourishing.
“I can say happily that we have not had to cut one poker position in any of the three casinos I oversee,” said Andy Rich, the poker room manager of Harrah’s, O’Sheas, and the Flamingo. Rich reports that all three of his poker rooms are up compared to last year — Harrah’s by 5 percent, the Flamingo by 19 percent, and O’Sheas by 76 percent.
“Nobody else [in the casino] is up in any department,” said Rich.
Rich believes that the success is based partially on the promotions the three casinos put out — from high-hand jackpots to freerolls for players who play at least 10 hours a week, to even rakeback during specific hours.
“You can also lose a lot less in poker than in blackjack,” said Rich.
But the Venetian poker room’s revenue is up an astonishing 100 percent compared to last year. It has been so successful that slot machines have temporarily been replaced by more tables to accommodate the room’s large crowds for its Deep Stack Extravanganza tournament, which wraps up Nov. 25.
“There’s no real secret to our success,” said Kathy Raymond, director of poker room operations for the Venetian. “We just treat customers how they want to be treated.”
For the Extravaganza, the Venetian has provided a free buffet every day for all players. Raymond also said that the casino worked very hard to get the right personnel in place in terms of dealers to ensure that players would have an enjoyable experience at the table.
Most successful poker room managers believe they are bucking the trend, that the revenue of most rooms is not up. Caesars Palace is down a little bit — about 1 percent from last year — and the Excalibur is also down, though MGM declined to give specific figures.
“The drop down in poker revenue is comparable to the rest of the casino,” said Excalibur’s poker performance manager, Ed Peterson.
Still, poker managers will have their work cut out for them as casinos continue to slash line items in their budgets.
“I’ve heard from the grapevine that some of our marketing expenses are going to get cut here at Caesars,” said Pedulla. Asked about potential staff reductions, Pedulla said, “There is no plan to lay off any employee at this time. But, of course, business will predict that.”
But Pedulla reaffirmed that poker was here to stay.
“We have no plans on shutting down our room. None.”
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