Competition, Competition, Competition Will Be
by Martin R Baird
Intense competition will define the casino industry in 2013 and there are five reasons for why this will happen.
If casino managers thought gaming was a brutal market in years past, they haven’t seen anything yet. Competition will ramp up for a number of reasons. And that is why 2013 must be the year of quality service for casinos that want to survive.
The Headlines Are Already the Proof. Three headlines from the latter part of 2012 already told the world that there was an increase in competition for casinos that will only blossom in 2013. The headlines were “New Law in Massachusetts Allows for Three Casinos,” “Maryland Voters Add Vegas-Style Table Games At State Casinos” and “Chicago Casino Closer to Reality After Election Results.” This all adds up to new competition.”
Here’s a real-life example of this competition in action. A few years ago, Maryland didn’t have any casinos and its residents drove to Delaware or West Virginia properties to play. Now those people can stay in their home state and play. On top of that, Maryland can cannibalize gaming revenue from neighboring states that don’t have table games. It really changes the tide when Maryland goes from no casinos and losing tax revenue to adding table games and perhaps luring new revenue.
States Will Want More and More Gaming Revenue. State governments love tax revenue from casinos and they will want more as they grapple with budget deficits. It’s no wonder state government adores gaming revenues. According to the University of Nevada, Las Vegas, direct casino tax revenue nationwide increased 92.58 percent from 2001 to 2011, or from $4.1 billion to $7.9 billion.
Only six states – Alaska, Arkansas, Montana, North Dakota, West Virginia and Wyoming – did not have budget deficits for 2012, according to Pewstates.org. This website also reports that Texas is planning to cut $10 billion from its educational programs. With education on the line, Texas legislators might consider adding gaming revenue to the equation.
Gaming Is Growing Faster Than Population. From 2000 to 2009, the U.S. population increased 8.8 percent while gaming jobs increased 46.1 percent. Since 2009, states like Kansas, Ohio, Maryland and Pennsylvania have either introduced or expanded gaming. There are more and more gaming choices without a major increase in population. That means increased competition for people’s entertainment dollars.
Internet Gaming Is Looming. The website for the National Conference of State Legislatures reports that California, Delaware, Hawaii, Iowa, Illinois, Mississippi and New Jersey have introduced legislation authorizing forms of Internet gaming in their states. The reason they are doing this is because they want to make sure they are not left out of this possible revenue stream.
“Sweepstakes” Competition Is Growing. Internet cafes that promote so-called sweepstakes as a way to get around casino laws are opening in states like Ohio, South Carolina, Michigan, Texas and North Carolina. These states are trying to decide the best way to deal with them. The Wall Street Journal reported that in North Carolina alone “researchers estimate the industry’s total annual sales…are between $4.6 billion and $13 billion before payouts.”
Intense competition means that casinos must make 2013 the year of service for their customers. Many casinos have talked about improving their service for years and some have even done some work toward that goal, but 2013 will be the year for an all-out assault on service. Goodwill will not be good enough. Increased competition will dictate that casinos will need to provide amazing guest service or risk failing. Casinos that are not prepared will feel a huge ripple effect from the slow-growth economy and the fast-growing gaming market.
There is a challenge with service improvement. Improving service isn’t a 30-day program. It takes a long-term vision and commitment to achieve service greatness. Service cultures are not hatched in an executive office, they are created over time by consistent expectations and management.
This year – 2013 – will be the year that many casinos separate from the pack. They will do what it takes and invest in service so they are the casino of choice. They will create guest and associate advocates in a consistent way.
Date Posted: 21-Dec-2012
Martin R. Baird is chief executive officer of Robinson & Associates, Inc., a Boise, Idaho-based consulting firm to the global gaming industry that is dedicated to helping casinos improve their guest service so they can compete and generate future growth and profitability. Robinson & Associates is the world leader in casino guest experience measurement, management and improvement. For more information, visit the company’s Web sites at www.casinocustomerservice.com and www.advocatedevelopmentsystem.com or contact the company at 208-991-2037. Robinson & Associates is a member of the Casino Management Association and an associate member of the National Indian Gaming Association.
