Las Vegas casinos chase the colors of money

Jul 31, 2001 6:46 AM

Minorities in the United States constitute a $1.4 trillion market, and casinos are angling to get their share of the action.

With wide-ranging diversity programs targeted at employee recruitment, suppliers and consumers, Las Vegas’ major gaming companies have found that reaching out to minorities is no longer a socially conscious option — it’s a bottom-line necessity.

“It’s the right thing to do, and it’s good business,’’ says Debbie Munch, corporate spokeswoman for Park Place Entertainment, which promoted two African-Americans and a woman to top executive positions in the past two months.

MGM-Mirage feels so strongly about the issue that it created a corporate diversity office. “The commitment comes from the top, from (Chairman) Terry Lanni and (Vice Chairman) Dan Wade,’’ said Tony Gladney, the company’s vice president of diversity.

Gladney, a 1987 UNLV graduate who spent part of two seasons playing for the San Francisco 49ers, said MGM-Mirage is dedicated to expanding its minority workforce and contracting corps. “Our goal is to continually grow our numbers,’’ he said, adding that diversity objectives are an integral part of the company’s performance review process.

Terrence Johnson, a Las Vegas consultant specializing in minority business development, rates MGM-Mirage No. 1 in its emphasis on diversity. “They are the most advanced. It’s like a religion to them,’’ he said.

Johnson says it’s a smart play because African Americans spend more at casinos than any other form of entertainment except music. Hispanics and Asians, meantime, are the fastest-growing segments of the U.S. population. In 1999, local and visiting ethnic minorities accounted for roughly 40 percent of the $24 billion spent in Las Vegas.

“Minority guests size places up quickly to determine a comfort level,’’ said Alan Feldman, corporate spokesman for MGM-Mirage. “One way they can tell right away is by the employees you have.’’

Five years ago, in the wake of the Rodney King riots, the MGM Grand hired 1,462 economically disadvantaged employees, one of the biggest minority hiring projects in the nation.

Gladney says that commitment has spread to vendors and marketing. Locally, minority on contracts and the company even has a free-standing division called “purchasing diversity.” Nationally, MGM-Mirage sponsors outreach programs, such as hosting an evening of entertainment at the recent NAACP convention in New Orleans.

Boyd Gaming has explored similar avenues as it builds the Borgata in Atlantic City. There, the company is sponsoring Chamber of Commerce memberships for minority-owned firms. Edna Ortiz, the equal employment opportunity officer for the resort, calls it community goodwill.

But there can be pitfalls. This month, a New Jersey court struck down the state’s minority preference program. The judges sided with a white contractor who argued that a 30 percent set-aside for minority subcontractors was unconstitutional.

Las Vegas casino companies say they do not set hard quotas, but strive instead for a general expansion of minority opportunities.

Louie Overstreet, president of the minority-oriented Urban Chamber of Commerce, praises Park Place for making high-profile minority appointments. In the past two months, two African-Americans ”” Steve Bell and Lorenzo Creighton ”” have been named, respectively, senior vice president for human resources and vice president for government affairs. A woman, Kim Sinatra, was hired as a senior vice president and deputy general counsel.

Overstreet ranks Station Casinos’ second for its diversity efforts. “They’ve got the best plan for vendors and employment,’’ he said.

Looking to boost business, casinos are just now beginning to develop data on the minority market, and Johnson’s firm, Experience the City, is gathering detailed information on minority preferences. Conducting online surveys, he asks more than 40 casino-related questions, such favorite hotel, best staff, worst staff and best entertainment. Personal spending habits are tracked, too, such as how much time a player spends gambling, on what games and the average bet size. The surveys are tailored to black, Hispanic and Asian respondents.

“Las Vegas is getting younger and hipper,’’ Johnson says. “That’s good for minorities’’ — and for the business that cater to them. He believes ethnic market savvy is essential to fending off the competition from Indian casinos springing up around urban centers in California.

Yet amidst the flurry of diversity initiatives, Feldman cautions that corporations can sometimes be too clever by half. He recalled that awhile back some of the Mirage brass thought the fare at the Caribe Café, larded with open-face turkey sandwiches and other American staples, had become “too pedestrian.’’

But when the menu was revamped to include to current cuisine, diners revolted. “The lesson there was don’t out-trend yourself,’’ Feldman said.