Evaluating the Impact of a New Resort Amenity on Gaming Business Volumes

Using performance data from an Atlantic City hotel-casino, theoretical models are advanced to estimate the effects of a new indoor pool/nightclub on both daily coin-in and table game drop. This study represents the first attempt to estimate the indirect gaming contributions of a new nongaming amenity. The pool/nightclub variable was found to significantly increase table game drop at a rate of $150,500 per day, but it failed to produce a significant effect in the coin-in model. The core model, design, and results described herein are critical to operators and developers alike, as estimating the impacts of new nongaming amenities on key gaming volumes has been a guessing game to date. Thus, this paper offers a way to substantially improve return-on-investment calculations for new nongaming amenities. Although constructed with gaming in mind, the core model could be easily adapted to a variety of leisure service businesses

Estimating the Ability of Gamblers to Detect Differences in the Payback Percentages of Reel Slot Machines: A Closer Look at the Slot Player Experience

The results of play on 60 different computer simulated reel slots challenge the widely held theory that frequent slot players are able to detect changes in a slot machine\u27s house advantage as slight as 1 to 2%. These findings affect the formulation of critical and capital-intensive customer retention strategies and brand positioning campaigns within the gaming industry. An overwhelming majority of 10,000 virtual players were not able to reject the hypothesis of equal payback percentages after playing both a 3% game and a 12% game (i.e., a 400% increase in the house advantage). This result held across three levels of pay table variance and five levels of trials or spins. The differences in house advantages examined herein ranged from 33% to 400%, across the various 2-game comparisons. The results also fail to support those who argue or fear that frequent slot players are able to detect changes in the house advantage over time. Profits from slot operations are critical to the success of most casino resorts, making this research into the slot player experience a valuable contribution to both the literature and casino management

Estimating the Indirect Gaming Contribution of Bingo Rooms

Using data from two repeater market hotel casinos, the relationship between bingo and slot business volumes is explored. Contrary to conjecture supplied by industry executives, the results fail to demonstrate a statistically significant relationship between daily bingo headcount and coin-in. This result was found in three different analyses, including one· attempt to estimate the impact of bingo headcount on low-denomination coin-in. This study advances the literature by challenging the assumption that bingo rooms produce substantial indirect slot profits. Given the minimal direct contribution to property cash flows, if any, the results suggest that bingo rooms are not always the highest and best use of valuable casino floor space

Exploring the Relationship between Race and Sports Book Wagering Activity and Daily Slot and Table Game Play

Using performance data from three Las Vegas hotel-casinos, time series regression models were employed to better understand the relationship between race and sports book wagering volumes, and slot and table game play. Variables representing both race and sports book wagering volumes failed to produce statistically significant effects in seven of twelve hypothesis tests, within models designed to explain the daily variation in slot and table game play. The results directly extend the work of Abarbanel, Lucas and Singh (2011) by examining the relationship between book wagering levels and table game play, and provide additional empirical tests of the Full Service Theory examined in Lucas (2013b). Casino operators and developers gain valuable insight related to the contribution of books to primary casino profit centers, and the methodological approach is readily adaptable to other leisure service businesses interested in estimating the contributions of one profit center to another

Examining the Link Between Poker Room Business Volume and Gaming Activity in Slot and Table Games: A Closer Look at a Key Assumption in the Full Service Theory

Results from three different Nevada hotel-casinos failed to support the popular notion that poker rooms drive business to the slot and table game areas of the casino floor. This result not only questions the validity of a key and somewhat bold operating assumption, it casts a shadow of doubt on the broader Full Service Theory, as applied to the casino floor. Additionally, this work extends Ollstein (2006) by empirically examining the relationships between the daily business volumes of poker rooms and both critical gaming centers (i.e., slots and table games). Five of six key results question the wisdom of offering live poker, based on the assumption of indirect revenue contribution to slots and table games. Double-log time series models are advanced to analyze the daily operating results of three casinos over a seven-month period, offering a rare and insightful look at actual casino performance data

The Determinants and Effects of Slot Servicescape Satisfaction in a Las Vegas Hotel Casino

Scales representing ambient conditions, ability to navigate the slot floor, cleanliness, interior decor and seating comfort all produce a significant effect on slot servicescape satisfaction. Scales representing slot servicescape satisfaction and gaming value produce significant effects on overall satisfaction with the slot experience. Overall satisfaction with the slot experience produces a significant effect on behavioral intention variables such as repatronage, word of mouth and desire to remain in the casino environment. This exploratory study uses data from a Las Vegas hotel casino to extend the work of Bitner (1992) and Wakefield and Blodgett (1996) related to servicescape effects. Simultaneous multiple regression analysis was used to test all one-tailed hypotheses at the .1 0 alpha level (n = 195)

Estimating the Indirect Effect of Sports Books on Other In-House Gaming Volumes

Using data from a repeater market hotel in Las Vegas, Nevada, the relationship between sports book and slot machine revenues is examined. Daily sports book write and daily slot handle are compared over a 250 day period. Though many industry leaders theorize that sports book gamblers also wager in slot banks, the results of this Autoregressive Integrated Moving Average (ARIMA) analysis fail to demonstrate a statistically significant relationship between sports book write and slot coin-in at the 0.05 alpha cutoff. This study advances literature currently available by establishing the lack of such a relationship and disputing the generally accepted assumption that sports books produce a substantial indirect contribution to slot revenues. While the sports book does generate a fairly constant direct profit for the casino, the absolute value of that profit is minimal and the results of the study show there is no indirect profit contribution from sports books to slot machines. Given these results, casino management may want to consider that a sports book is not an optimal use of casino floor space

Simulating the Effect of Pay Table Standard Deviation on Pulls Per Losing Player at the Single-visit Level

While holding par constant, changes in the standard deviation of the pay table produced an inverse effect on pulls per losing player (PPLP), across six different virtual slot machines. This result establishes the standard deviation of a game as a crucial determinant of a slot player\u27s experience. Three different single-trip scenarios were examined via computer simulation, with 50,000 players engaging each game. For example, virtual players began with 100 units, terminating play at bankruptcy or 200 units. As players focus on the outcome of single visits, understanding the determinants of PPLP (or time on device) will help management engineer desirable customer experiences at the trip level. In part, this can be achieved by altering the product mix to better match the expectations of the clientele. Given the remarkable bankruptcy rate of the trip simulations, proxies for value such as PPLP serve as crucial evaluation standards in the satisfaction process