High rollers can alter
the bottom line

Aug 15, 2006 9:27 PM

Nevada regulators last week reported that casinos in June saw a decline in table game revenue of 10.2 percent from June a year ago.

If it weren’t for the casinos high-end players, it could have been worse.

Nevada’s baccarat tables — normally the province of high rollers — raked in $41.6 million, a solid 22.8 percent increase over a year ago.

All other table games, from craps and blackjack to roulette and Pai Gow Poker, generated less win than a year ago.

The high rollers’ affect on a casino’s bottom line is nothing new.

"The average Joe coming in and leaving $50 or $100 pays for operating the place," said Pinnacle CEO Dan Lee. "And the high end is your profit."

As gaming revenue weakens due to market conditions, high rollers can shore up the bottom line.

For instance, Bellagio enjoyed a lucky streak at the high end tables last quarter, which helped MGM Mirage post healthy profits amid a slowing overall market in Las Vegas.

"The results underscore the volatility that’s inherent when you do cater to high rollers," said analyst Matthew Jacob of Majestic Research. "A casino can have a swing in luck much like an individual gambler does."

The Venetian and Wynn Las Vegas — both of which cultivate a healthy high roller clientele — report that gamblers’ winning streaks actually took a nick out of their bottom lines.

At the Venetian, table games’ win percentage — the amount of money it won from gamblers — was 17.6 percent, compared with its expected range of 20 percent to 22 percent.

Similarly, Wynn Las Vegas reported that lucky high end players pushed its table games win percentage to 19.8 percent, on the low end of the expected range of 11 percent to 22 percent.

High rollers or "whales" are casino customers that often win and lose into the millions of dollars during a visit.

And, even though there are more of them around today than 20 years ago, their overall impact is said to be weakening as casinos get more of their revenue from non-gambling sources, such as hotel rooms, retail, restaurant and entertainment sales.

Nevertheless, casinos are usually willing to bend over backward for a solid high roller.

"There is a much greater representation of high net worth individuals willing to risk seven-figure amounts on a trip," said Bill McBeath, president Bellagio. "And their corresponding betting limits have been raised as well."

The trick is keeping them from getting too lucky.