High-roller rooms not ready to roll over

Aug 5, 2003 6:12 AM

The supposedly slow start reported by the state’s three high-stakes gaming salons shouldn’t come as a surprise, according to a casino insider.

"You have to remember there’s been a huge drop-off in international travelers," says a source close to a major gaming operator in Las Vegas. "Plus, keep in mind that the goal of these so-called international salons was to generate new business. That will take time."

According to published reports, international traffic to Las Vegas last year was off more than 30 percent from 2000 levels. And, the U.S. Department of Commerce’s Office of Travel and Tourism predicts travel won’t return to 2000 levels until at least 2006.

Other issues that may have had an impact on international travel is the downturn in the economy and the SARS epidemic.

The source, who spoke on condition of anonymity, added that the mandate from Nevada’s legislature, which passed legislation in 2001 allowing for private, high-stakes salons, was to "lure high-stakes gamblers who previously played only in Macau, Australia, London or other jurisdictions already offering private gambling."

"Getting new gamblers to come to Nevada, especially in the post 9-11 era, is no simple task," the source said. "It takes time to set up sales offices overseas, then work to gain those players’ trust."

Indeed, gaming giant MGM Mirage initially said it would target gamblers who would be new to the Nevada casino market.

"We’re not going to try to convert current customers into international gaming salon customers," MGM Mirage Marketing Chairman Bob Moon said last summer, when MGM Mirage received the state’s first private-salon license.

Moreover, some casino operators aren’t yet ready to concede that private gaming is already a failure.

"I’m not so sure it’s off to a slow start," said Robert Stewart, vice president of corporate communications for Park Place Entertainment. "As long as people are using the rooms, we’re satisfied."

Steward added that the high-stakes room at Caesars Palace is used nearly every day, and only when a high-stakes customer wants the doors closed will the casino contact regulators and so announce.