The release last week of March 2002 gaming revenue figures for the Las Vegas Strip reflect a slight decline from the revenue reported in March 2001.
Most experts agree that was to be expected in the wake of the slowdown following 9/11.
But what wasn’t expected was the sharp drop-off in baccarat revenue, which helped fuel an overall decline in table game revenue.
According to Nevada regulators, table game revenue (excluding baccarat) in March was $164.7 million, a 7.2 percent decline from last year.
Meanwhile, baccarat revenue slumped to $99.3 million, a hefty 45.2 percent decline from last year. It was also the first time in seven years that baccarat drop was less than $100 million.
Other table games that suffered a decline in revenue include blackjack (5.7 percent) and roulette (13 percent), while craps was slightly higher at 0.5 percent.
And slot revenue, while declining 2.9 percent from last March, showed an improvement over the declines experienced in January and February (combined 4.1 percent), as well as December (4.8 percent), November (6.4 percent) and October (8.1 percent).
In effect, slot machine revenue has shown the strongest recovery since Sept. 11, and continues its trend of supplanting table games revenue.
Â Â "While we’re not ready to start moving our table games out of the casino, we’re definitely trying to bring in more slot machines, especially the popular multi-line, multi-coin nickel video games," said the casino manager of a Strip resort. "Slot
revenue is less susceptible to fluctuations in seasonal and other factors."
Slot machines also don’t require a lot of personnel to maintain them, such as dealers, supervisors or pit bosses.
"Some casinos are having a hard time covering their operating expenses in the pit," said the supervisor at a Strip casino. "Obviously, the dealers and other pit personnel have to be paid. Then there are the amenities, the free drinks and free buffet tickets. Throw in the tables’ share of the utility bills, amortization of space, taxes and whatever else. That’s why it makes sense to have a slot machine that earns $200 a day and requires practically no upkeep."
The Sands Casino in Atlantic City is following that trend and replacing many of its table games with slot machines. By early July, the Sands will eliminate more than half of its table games, leaving 28 traditional games and 10 poker tables, and adding 400 slot machines.
"You would hope to reduce costs that you don’t need, and enhance revenue opportunities," says Sands president Herbert Wolfe, who adds that the casino should be more profitable as a result.
|MOVING EXPERIENCE ”” Casinos, like this one in Asia, are removing table games in favor of slot machines.|
In addition to economic factors, the World War II generation of craps and blackjack players is fading away, and they’re being replaced by a high-tech generation of gamblers attracted to flashy, electronic slot machines.
That’s a trend that will continue to squeeze table games.
In Las Vegas, slot machine revenue accounts for about 69 percent of overall gaming revenue, with table games raking in about 31 percent. That gap has grown steadily since the early 1980s, when the percentage for each was about 50-50.
In the late 1970s, table games were king of the casino, accounting for nearly 60 percent of the take, with slots garnering about 40 percent.
The tables have turned in Atlantic City as well, where table game revenue hit its peak in 1988. Its share of the overall gaming pie has been sliced ever since.
The power of the almighty slot machine is underscored in California, where the 46 tribal gaming casinos rely heavily on slot machine revenue.
Although tribes don’t report actual revenue, estimates have placed the number of California slot machines at 42,000, and about 780 table games.
Experts estimate that slot machines account for about 70 to 75 percent of gaming revenues, which translates to about $150 to $160 per machine per day.
Casino experts in California say the state’s largest casinos in San Diego and Riverside counties pull in much more than the state average, perhaps as much as $200 per machine.
By comparison, the 47,000 slot machines on the Las Vegas Strip bring in about $116 per machine per day.