Well, this will ruffle some feathers. But somebody has to say it.
We need to stop squeezing our casino customers.
Some of this “erosion of player value” has happened slowly, but methodically, over time. But much of the squeeze has occurred more recently, especially during the pandemic.
Let’s take a look at just some of the ways that over the last decade or two, we’ve been sticking it to the customers. Sure, taken individually, each grab might not amount to that much (let’s call them “minor offenses”). Taken collectively, however, I believe we’re greatly jeopardizing the overall health of the gaming industry and the loyalty of its customers with an overall “capital crime.”
My case for this player erosion of value (granted, from the player perspective) is as follows.
Blackjack
The egregious 6-5 payoff for a natural blackjack (instead of the usual 3-2) has spread like wildfire. Other blackjack rules (double down, splitting pairs, insurance, etc.) have been tightened or eliminated. Minimum bets are higher. Blackjack side bets with a huge house advantage are embedded in many blackjack games like land mines. Games move faster with the advent of automatic shufflers and the focus is on “hands dealt per hour,” rather than the number of happy customers created per day.
Access to Cash
Looked at casino ATM fees lately? Sure, some of this is on the banks and/or the credit-card processors, but let’s lay the blame mainly where it belongs: on the casinos and their desire for a few more cents or bucks per transaction fee. Kudos to the very few casinos (Barona, Gold Dust West, etc.) that have no ATM fees as a standard policy in their casinos. And while I believe the advent of cashless gaming has great potential, my understanding is that it will also come with user fees, yet another chance to squeeze players when they’re just trying to access their own money.
Roulette
In North America, single-zero roulette is almost non-existent. Most games are double-zero. But really galling is the appearance of triple-zero roulette, I guess under the guise of “more betting options” rather than the actual “tripling of the house advantage” over single zero.
Hotel and Amenities
Resort fees aren’t just an insidious tool of casinos, but also of the entire hospitality industry. Yet casinos enthusiastically jumped on the bandwagon, raising the fees considerably and often. Parking fees, especially in Las Vegas, are a relatively new phenomenon, but already showing that they will be consistently raised. Some casino resorts with franchised restaurant operations now even have a “billing surcharge,” reportedly as a mostly sneaky way to offset the monthly lease payments to the casino landlord. And although they’re not a literal cost squeeze on customers, reduced in-room amenities, diminished offerings like room service, and/or having “rooms cleaned only upon guest request” are certainly a squeeze on the guest experience. Add it all up and customers are paying more for less, with a significant impact on gambling budgets as a result.
Slots
I’ve saved the biggest squeeze for last—slot machines, the cash cows of most casinos. Look at any state, region, or company reports over the last couple of decades and you’ll see that the casino industry is taking money from its customers at an ever-increasing rate. Granted, some of this cash grab is due to players’ penchant for entertaining (but much more higher holding) penny slot machines (which are often played for dollars, not pennies), but casinos consistently tightening slot hold percentages over time is certainly a major player squeeze factor. What bears mentioning here are a couple of academic studies that compared slot volumes on “tight” slots versus adjacent “loose” slots. Their conclusion: Players can’t tell the difference, so you’re leaving money on the table by not pursuing tightening opportunities. Even if that’s true, why would you use that to say, “Squeeze your slot players (some more), because they don’t know and don’t care?”
Casino customers also may not know (or care) about what they pay in casino resort fees. They may not know that casino parking never used to involve a fee. They may not care about a $6 ATM fee versus a $4 one. They may willingly submit to a $15 minimum blackjack bet over a $5 one.
But being one of those customers, and having talked with thousands more over the decades, I can tell you that casino customers widely do not trust casinos. They believe you’ve tightened the slots (true). They feel you’ve reduced players club benefits (mostly true). And they maintain that casinos have gotten greedier and don’t care about them anymore (draw your own conclusion).
Having been a casino operator myself, I can already hear some of your responses to this so-called “player-squeeze” that I’m describing. “Inflation goes up, so we have to raise prices.” “COVID is a big part of this.” “We still offer tremendous value.” “My management (or shareholders) are putting the squeeze on me to increase profits.” “Players have been getting the best of us for too long.” “Why shouldn’t we make as much profit as we can at all of our casino resort’s cash registers?”
I hear you. And I do know that it’s not the old days where casinos made it all in the casino and essentially used everything else as a loss leader.
But the alarm bell I’m ringing here, that I’m imploring you as an industry to consider seriously, is that you can squeeze your customers only so hard and for so long and in so many places. And when that happens, your lifeblood, your customers, may decide that casino-going isn’t worth it anymore.
Or worse (or maybe it’s better), they may run down the street to an enlightened casino competitor that’s trying to restore, or at least maintain, that customer value. As a wise man once said, “Casino players essentially come in your front door and willingly give you their money. Don’t do anything that might screw that up.”
Dennis Conrad is a long-time executive consultant who works exclusively with select gaming clients that truly care about being customer and employee focused. He can be reached at Dennis@conradworks.com.
Earlier posts by Dennis:
