Battered by a soft domestic economy and stiff international competition, Las Vegas casinos are struggling to land their share of whales.
Once flooded by moneyed players from Taiwan and Japan, the Strip’s high-roller action has thinned out in recent months.
“High-end action is static. It’s up one month and down the next,’’ says Bobby Baldwin, president and CEO of Mirage Resorts.
But there are some bright spots.
Las Vegas resorts are luring more big players from mainland China. Though a communist country, China has its millionaires and they like to gamble. One industry source estimated that Chinese visitors may have dropped up to $300 million here in the past year ””a figure that tops action from both Taiwan and Japan.
With Beijing winning the right to host the Olympics in 2008, gamers expect more cross-pollination over the Pacific. “Don’t underestimate the fact that they (the Chinese) want to know how we operate,’’ said one industry analyst.
Whatever the motivation, the Chinese connection comes not a moment too soon. In the past two months, the Venetian and the Rio have laid off casino hosts and marketing employees. Collections are becoming more difficult as players’ stock funds flounder.
“(Highrollers) are still coming, but for how long?’’ wonders one host who asked not to be identified. “I don’t think we’ve seen the full effect of the dive in the Nasdaq yet.’’
Bill Hornbuckle, outgoing president of the MGM Grand, said his hotel’s bottom line depends on just a handful of players. “Out of 40,000 customers, the daily reports that I receive come down to just five or six names,’’ he noted.
While the Strip $10 billion-a-year cash flow exceeds Hollywood’s, gaming leaders are looking to aggressively tap new markets. It’s imperative, they say, to “open up” mainland China.
Industry insiders say high-end players are increasingly selective and demanding in their approach. “It used to be that the hotel that had the best entertainment or the best rooms got the traffic. Now players want the best deals. They’re treating it more like a business deal,’’ said a veteran host.
To expand the pool of whales ”” generally defined as players who will spend $100,000 on a hand and drop $1 million in a single visit ”” casinos liberalized rules for domestic players a few years back. Under these changes, American players could get the same promotional chips and discounts on losses enjoyed by foreign gamblers.
But as competition has intensified on the Strip, savvy gamblers have played the field. Now casinos might want to scale back such costly come-ons, but can’t for fear of losing business.
Boosted by strong baccarat numbers, May’s gaming report was bullish for the Strip. And that has spurred some optimism. Gene Kilroy, senior marketing executive at the MGM Grand, said he expects a strong second half of the year.
“The high-end action is up 10 percent over the last two years,’’ he estimates. “Remember, when times are tough, entertainment does well.’’
The Aladdin shares that rosy scenario, reporting monthly increases in play at its London Club. Casinos are also hopeful that the new state law permitting exclusive high-roller salons will bolster trade and draw more xenophobic Chinese who already must jump through bureaucratic hopes to get to the States. And for the lower-end player from the Orient, Palace Station has been aggressively advertising its Asian Pit.
Still, high-rollers aren’t what they used to be. In the old school, big players were guaranteed money-makers for host resorts. “It doesn’t matter how much we pay her,’’ a gaming executive once said of Diana Ross, implying that Ross’ paycheck was invariably retrieved at the tables.
But with brand loyalty out the window, whales are roaming like never before. And that has some gaming execs invoking another time-tested adage these days: Give us 10 $5,000 players and we’ll make more than we will with one $50,000 player. Can 10 dolphins trump a whale?