by Andrew MacDonald and William R. Eadington
LASER: Developing a highly targeted and focused development approach.
Andrew MacDonald and William R. Eadington.
When assessing possible venues and specific sites for casino developments, what are the characteristics that should be considered in order to facilitate the development of successful gaming properties?
Free or quasi-free market gaming environments often include a range of potential sites for casino developments. The process of determining which sites might offer the best prospects are typically left to the casino developers. (In this paper, we use venue to refer to the city or borough where the casino will be located, whereas the site is the particular parcel of land where a development will take place.) In other instances where markets are constrained through exclusive franchise or limited franchise licensing laws, the same situation might apply. Alternatively, local government authorities may themselves decide to choose the most suitable location for the site for a proposed casino development. While the objectives of government are not going to be fully aligned with those of commercial operators, many considerations will be similar, and even where they vary, the differences should be well understood by both the developers and government authorities.
A useful acronym for evaluating various sites or venues for gaming developments is LASER. LASER stands for Location, Access, Scale, Entertainment, and Range of offering. The ideal characteristics for a venue and site for casino development would be to have a location free from zoning and environmental problems, surrounded by a dense and affluent population, and which is highly visible and easily accessible. The site should provide the spatial characteristics most suitable for multi-faceted development (including casino) and preferably provide flexibility for future expansion opportunities. It is also preferable for the site to be located in or near an existing leisure or entertainment precinct in the venue that has facilities and attractions that will complement the new development.
However, there may be multiple venues that could host a development, and for each one, there is almost never an ideal site. More often than not, developers and government authorities must deal with a wide variety of trade-offs and compromises. It is therefore useful to undertake careful analysis on the classification of such trade-offs to better evaluate the real long-term value of one potential venue and site in comparison to others. The following discussion provides an evaluation matrix that can serve as the first step for a rigorous assessment of each of the criteria noted in LASER.
Location. What is the population base and demographics of the area? How dense is the population within easy reach of the location by foot, by automobile, by commercial air travel, and by public transit? How culturally diverse is the population? Are there specific ethnic or religious groups in the area that are particularly enthusiastic or particularly opposed to casino gaming? Will there be high demand for a casino facility in the venue? Is the specific location considered physically "safe" and free of crime by locals and by others within the region? What are the planning and zoning requirements for the site, and how will these requirements affect construction costs and architectural features? What competition for gaming and leisure activities exist within the region? Can the location accommodate additional casino facilities if the law permits? What is the proximity to other tourist attractions? What is the proximity to hotel concentrations? What are the natural and man-made aesthetics of the area?
Access. How visible is the potential site? How easily accessible is the site by customers arriving by public transport? What are the travel times to the potential venue from other population centers in the region? Is there a marked difference in travel times to the venue and site between peak and off-peak hours? Does the road system provide easy access to the site from different directions? Is there good off-site parking near the location? Will the local authorities allow the amount of parking at and near the site that would be suitable for the proposed scale of the development? How close is the nearest airport, and what kind of linkages does it provide to the entire region and the rest of the world? What accommodation facilities already exist around the potential site? Is the area safe for visitors to stroll? Will the local highway and roadway infrastructure support the volume of traffic the proposed facility will generate?
Scale. What is the footprint for the proposed development? Is the size of the proposed development suitable for current and possibly future forecasted demand? Is the development planned for mixed use? Does the development footprint support a single level gaming floor? Is the scale of the proposal appropriate relative to the current competitive environment? Is there an opportunity to create a dramatic sense of arrival at the site? What planning restrictions—such as height constraints, signage ordinances, and setbacks—exist that might thwart the ability of the developer to fulfill the project’s potential?
Entertainment. Is the proposed development part of a greater leisure and entertainment precinct for the venue and its immediate environs? Is the area already known locally or regionally as an entertainment "hub"? What other leisure facilities exist near the site, and what other non-gaming leisure activities does the proposed development entail? Is there need for expanded entertainment offerings within the venue generally? If they are developed, will they enhance the overall tourism attractiveness of the venue or region? Which of the leisure and entertainment facilities are most likely to serve as a magnet to the proposed development? Is there a good understanding of the complementarity of various entertainment offerings—such as nightclubs, cinemas, showrooms, events stadia, theatres, specialty retail, bars and restaurants—that will enhance visitation, activity, and "buzz?"
Range. Is there a clear understanding of the target markets for the development and surrounding facilities? Is there an appropriate mix of offerings and activities which will be conducive to attracting a wide cross section of the target markets, as well as the general public? Are there existing convention and exhibition facilities at or near the proposed site? Are there complementary retail facilities near the site or associated with the venue? Are the entertainment and retail offerings that exist extensive or limited, and are they special or commonplace? Is there a strategic or competitive need to offer a broader range of options—with respect to entertainment, events and activities, and retail offerings—to the public? If fully developed as planned, what other venues, regions, or developments will be the main competitors for the target market of customers?
This type of analysis may also be useful in prioritizing development opportunities within a region. A simple but practical example can be illustrated by examining the Integrated Resort opportunities put forth by the Singapore government in 2004 and 2005. Singapore has proposed the development of two Integrated Resorts with casinos and has attracted substantial interest, with virtually every major casino operator in the world responding to the Singaporean government’s initial "Request For Concept" (RFC), issued in December 2004. The RFC suggested possible development of two sites within the island state, one at Marina Bay near the Central Business District, and another on Sentosa Island, a few kilometers away. Utilizing the LASER evaluation matrix, it is not difficult to determine which of the two sites offers better potential from a casino operator’s perspective. From the Singapore government’s perspective, analysis also provides insights into
Date Posted: 08-Jun-2006
Andrew MacDonald and Bill Eadington are comoderators of the annual University of Nevada Reno, Executive Development Program. The EDP is considered the pre-eminent development program for senior casino executives worldwide.