Battered by a recovering domestic economy and stiff international competition, Las Vegas casinos are struggling to snag their share of whales.
Once flooded by well-heeled players from Taiwan and Japan, the Strip’s high-roller action has thinned out in recent years.
"High-end action is static. It’s up one month and down the next,’’ says a key executive at 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 year, several high-profile Strip casinos have laid off casino hosts and marketing employees. Collections are becoming more difficult as players’ stock funds flounder.
"(High-rollers) 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.’’
An official at 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 $12 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.
Casinos are finding that the new state law permitting exclusive high-roller salons hasn’t really landed the more xenophobic Chinese who already must jump through bureaucratic hopes to get to the States. And for the lower-end player from the Orient, mid-sized casinos like Palace Station haveÂ been aggressively advertising theirÂ Asian pit and facilities.
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’Â 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?