Steve Wynn changed the face of gambling in Vegas

Jan 29, 2013 3:01 AM

Special to GamingToday

Some have said that in order to operate a successful casino, you need to be a gambler. This is especially true today because corporations and hedge funds are now buying and investing in casinos at a record pace.

However, there is a huge difference between being a CEO of a Fortune 500 company and a senior-level executive in a casino. The rate of failure proves it is very difficult to be successful in the gaming business without involving someone who understands the psychology of gamblers.

As a professional poker player and gaming consultant with 30 years of experience, I have had many meetings with senior-level executives in both casinos and card rooms about their gaming business, and some were completely clueless. I once met with a casino owner, and I told him you cannot take $6 out of a $4/$8 poker game. He said, “Robert, isn’t the idea to get as much as you can as fast as you can?” I had a hard time responding because this person obviously didn’t understand the psychology of gamblers or the business of gaming. His casino business is now in steady decline, and he has no idea why.

The owners and general managers I have worked for could quote numbers, facts and statistics, but they failed to understand the underlying reasons players come to a casino, become a loyal customer or never come back. They understand the cost of the acquisition of that customer because that is simple math, but when it comes to the reasons they keep him or lose him, they are at a loss to explain why.

Casino management often puts too much faith in simple numbers. Let’s be clear, numbers built Vegas, but what has been lost in translation is the understanding of the psychology of gamblers.

A perfect example is the Cosmopolitan of Las Vegas. When it broke ground in October 2005, the poker boom was at its peak. It is a known fact poker rooms do not make a lot a money, if any, but it can be used as a marketing tool to attract gamblers; and a casino as big as the Cosmopolitan could easily have accumulated a database of 500,000 poker players over a five-year period.

If its owners were afraid to compete with Bellagio or Caesars, why go into the gaming business at all? By excluding poker players, they excluded a potential database of a million poker players in Southern California alone.

The Tropicana is another example of not understanding the psychology of gamblers. They wanted to be in the poker business, but went about it in a haphazard way. They put in six tables, hired the wrong people and had no direction. It closed within a year. They have no understanding why they failed when the room was doomed from the start.

Now let’s talk about the most successful operator in Las Vegas and how he was able to incorporate the understanding of the psychology of gamblers into his philosophy of running casinos. That person is Steve Wynn.

Steve Wynn changed the face of gaming. When he opened the Mirage in 1989, the first thing I noticed was all the young people working there. It looked like Disneyland had come to Vegas. But that is just the image they project.

In reality, Wynn’s executives include gamblers who achieved great success in both gambling and the gaming industry. Bill Boyd, Charlie Meyerson, Bobby Baldwin, Eric Drache, who was inducted into the Poker Hall of Fame this year, and many others were all successful gamblers who were given the opportunity by Steve Wynn to reach the highest levels of management at his casinos.

If you could clone Eric Drache, you could make any casino a success because he understands the psychology of gamblers more than anyone I know. Even Wynn’s current Executive Vice President and Chief Financial Officer John Strzemp, who has been with Wynn since the Golden Nugget days, is a long-time successful poker player who came in second in the Main Event of the World Series of Poker in 1997.

Steve Wynn understands the psychology of gamblers because he is surrounded by them every day in his executive offices; and his success in the casino business is a testament to this.

Next week in Part 2, I will discuss more in-depth how to use the psychology of gambling to make any casino, whether brick-or-mortar or online, a success.

Robert Turner, a legendary poker player and billiard marketing expert with over 30 years of experience in the gaming industry, is best known for inventing and creating Omaha poker and introducing it to Nevada in 1982 and California in 1986.

Turner also created Legends of Poker for Bicycle Casino and the National Championship of Poker for Hollywood Park Casino, both in 1995; World Team Poker, the first professional league for poker, in 2000, and Live at the Bike, the first live gaming site broadcast on the Internet in 2002. He is an expert in both casino and online gaming marketing and player development.

Currently, he is working with his new companies Crown Digital Games, developing entertaining and engaging apps across all platforms, and Vision Poker, a poker marketing and managing group. Robert Turner can be reached at [email protected].

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