Table Spreads

The determination of table gaming spreads and matching table openings with variable demand levels.
By Andrew MacDonald
Gaming Analyst, Adelaide Casino, 1992

Introduction | Variable Volume Rostering | Optimising Profits | Conclusion |

If we define our business like any other, then what we are attempting to achieve is the profitable provision of customer satisfaction.

To achieve this in a Casino table gaming environment it is necessary not only to continually monitor patron demand levels, facility headcount and visitation patterns, but also to ensure that there is a thorough understanding of operating in order to maximise the potential profit from table games.

This can be a “chicken and egg” scenario where opening a certain number of tables may in fact dictate demand. Rather than demand dictating supply, the reverse may occur if supply is not increased when demand warrants. A simple example may demonstrate this.

Suppose a Casino opens with only five Blackjack tables and operates for three hours until further tables are opened. This decision is driven by the needs of management in terms of staff rostering even though demand may initially exist for double the number of tables what may occur is that due to the lack of customer satisfaction, a number of players may cease visiting at these times and as a consequence demand falls to meet supply. While some of the players may shift their visiting pattern to times where adequate supply exists, others will simply be lost either to competitors or to other forms of entertainment which match their available leisure hours.

This scenario may seem unlikely, however prior to being customer driven operations, many casinos were in fact “management driven” to suit operational needs.

Without overcompensating how does one ensure the appropriate matching of supply and demand? Over supply will of course result in unnecessary labour cost and decreased profits while lack of supply will result, in many cases, in foregone revenues and represents an “opportunity cost”.

To establish how may table games should be on offer and at what times tables should be opened and closed, it is necessary to consider a number of factors. How big is the Casino’s catchment area? What eligible population base exits and what is that populations propensity to gamble? What level of direct and indirect competition exists in the region? What future socio-political changes are envisaged? What regulatory constraints, if any, exist on the size and nature of the facility? What level of tourism exists to the region? Does the location inhibit or stimulate patron traffic?

These and other factors need to be thoroughly analysed to determine in an approximate sense the number of casino table games which should be provided.

Prior to progressing further, table game operating cost structures need to be analysed. Tax rates and labour costs will be a determinant in the minimum betting limits which can be offered and may impact upon a Casino’s ability to profitably match customers needs and wants. For example if the regulatory environment is such that gaming taxes and staff wages are high then the provision of lower limit tables may not be viable and total table numbers may be reduced to ensure that business profit requirement are met.

This initial process, while involving a lot of guess work, assumptions and research, is important to ensure the ongoing success of an operation.