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by Andrew MacDonald
Introducing new table games onto the casino floor is one of the most
perplexing tasks for any casino manager. Unless the game is well proven
elsewhere, or there exists pent up demand for the product, it is often
a costly, hit and miss exercise.
As casino managers we look at where the game is being played, and the
number of tables in each property. Floor space requirements and our
own restrictions are examined. Based on the house edge, the hold percentage,
expected decision rates and occupancy and average bets, we project comparative
performance relative to our average drop per table per day. We review
rules and procedures, training requirements, and marketing collateral
needs. We assess the proposed fees, lease costs and purchase costs,
contractual arrangements. And so the list goes on.
With so much information to consider, we then "sweat" on whether the
game will generate incremental revenue or displace revenue from other
games. At the end of the day what often happens is that we act conservatively
and place a limited number of the new tables we're introducing into
positions where existing games are under performing, thus limiting our
exposure to a potentially poor decision. Given that we've put the new
games in some out of the way spot, we also seek to reduce introduction
costs by not promoting the game apart from some limited signage and
learn to play functions.
So do we find ourselves as casino managers caught in the Prisoner's
Dilemma*? We want to grow our market for the long term but are continually
caught in the short term focus of our business. We feel we do the right
thing by giving new table games a try but then are disappointed with
the impact they have. In the end we tend to kill what we are trying
to create.
To be true leaders in the industry we must be Strategists, Marketers,
Analysts, Risk takers, Trusted and superb people managers and Visionaries.
When introducing new games we must be marketers and risk takers if we
are to achieve our vision. Put the new game in prime real estate to
give it maximum exposure, create awareness and trial through innovative
marketing and respond quickly to demand by adding more supply as soon
as you feel it's necessary, if not before. To be cautious is to fail,
while to dare to take risks will bring success. We might not hit the
home run every time but at least we will not die wondering if there
was a chance of success.
It may be that table games are becoming a thing of the past and will
eventually be taken over by technology. But it is certainly interesting
that much market research indicates that our customers aged between
21 and 35 actually prefer table games over current slots. The Hard Rock
Hotel and Casino in Las Vegas knows this to be true and has created
a very successful strategy catering to this market with lower limit
tables. Where will the Hard Rock's casino customer of today end up?
Maybe not playing Blackjack, as we know it, but instead on some interesting
new game that combines a social and interactive experience and provides
the chance to win a dream. We therefore need to be actively seeking
out these alternatives to protect our future.
Sure we will have a number of failures. A colleague observed that table
games were similar to Board games. Think of all the Board games ever
created and think of those that are still with us. Chess, Backgammon,
Checkers, Monopoly, Yahtzee and Scrabble are the staples. Many inventors
have come up with new games in recent times but none have rivalled the
success of these old favorites. Which was to say "….why bother?". But
this pre-supposes that new products can't be introduced and that these
games have not only been with us for all time but will be with us for
all time, and that anything else is doomed to failure.
Now I'm not saying that I'm thrilled with the idea of trying every new
table game I see at the World Gaming Congress and Expo. Some are just
plain dumb. We still need to analyse the potential success of the new
game by enlisting our customers and our staff in pre-evaluation of the
game concept and mechanics. This screening process does need to be exhaustive,
but once you've decided to introduce a new product at least give it
a shot. Be bold, innovative and create a sense of "WOW" around any new
offering. Do not go gently into that good night………………
* Prisoners' Dilemma The Prisoners' Dilemma game
depicts a situation where an individually rational action ultimately
results in a non-optimal return. In the Prisoners' Dilemma, the rational
strategy for each individual is to choose the option that maximises
their return (minimises their time in jail) on the assumption that the
other individual will either act 'rationally' (confess) or 'irrationally'
(not confess). The dominant strategy is for both parties to act rationally
and confess. The dilemma is that if both parties acted irrationally,
their payout (in terms of minimising jail time) is greater than the
combined 'rational' approach.
Date Posted: 30-Apr-2000
Andrew MacDonald is a highly respected Australian expert on Casino Operations and gaming statistics. Several of his works are utilised by the University of Nevada Reno in their Executive Development Program. He is currently employed by Australia's largest casino operator, Crown Limited, as Executive General Manager, Table Games Operations and Development .
Andrew may be contacted at andrewmac@urbino.net.
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