HRTM 101 – Introduction to Resort Tourism Management

Walker 5th Edition) – Introduction to Hospitality Management

Chapter 11 – Gaming Entertainment

The gaming industry has spread dramatically over the last 30 years. Previously, only a few select
cities allowed gamine or casino gambling (such as Atlantic City, NJ or Las Vegas, NV). Today,
that has changed. And, modern casinos combine gaming, lodging, hospitality, and amusements
into stand-alone resort experiences.

 There are 150 hotel/casinos on Native American Tribal Land.

 Riverboat barge gambling has spread.
 Cruise ships typically provide casino gambling (while in international waters)
 Locally, gaming in international waters (leaving from Little River) has brought legalized
gaming to more people.

 20 of the 30 largest hotels in the world can be found on the Las Vegas Strip (see below),

27 Harrah's Las Vegas 2,576

26 Imperial Palace Las Vegas 2,635
25 Bally's Las Vegas 2,814
24 Disney's Pop Century Resort Orlando 2,880
23 Gaylord Opryland Resort Nashville 2,881
22 Treasure Island Las Vegas 2,885
21 Paris Las Vegas 2,916
20 Las Vegas Hilton Las Vegas 2,956
19 Venetian (Macau) Macau China 3,000
19 Monte Carlo Las Vegas 3,002
17 Mirage Las Vegas 3,044
16 Hilton Hawaiian Village Honolulu 3,386
15 Flamingo Las Vegas 3,565
14 Shinagawa Prince Hotel Tokyo 3,680
13 Planet Hollywood (Aladdin) Las Vegas 3,697
12 Circus Circus Las Vegas 3,774
11 Bellagio Las Vegas 3,993
10 Caesars Palace Las Vegas 3,998
9 ARIA Las Vegas 4,004
8 Excalibur Las Vegas 4,008
7 Ambassador City Jomtien Thailand 4,210
6 Mandalay Bay / THEHotel Las Vegas 4,332
5 Luxor Las Vegas 4,408
4 Wynn Las Vegas / Encore Las Vegas 4,750
3 MGM Grand Las Vegas 5,044
2 Venetian / Palazzo "MEGACENTER" Las Vegas 7,128
1 Genting Highlands (First World Hotel) Malaysia 10,000+
Learning Outline the history of modern casinos
Objective 1

Year or Era Notable Happenings

1910 Most gambling (cards, dice) as outlawed in the United States

1931 Nevada approves commercial gambling throughout the state. Las Vegas and
Reno were early leaders with downtown gambling districts
1941 First casino (El Rancho Vegas) built on what would become the Las Vegas
Strip. These were first efforts to combine gambling, lodging, food, and
entertainment.
Mid-1950’s Nevada creates regulatory body to oversee the gambling industry

1970s Entry of corporate ownership of casinos in Las Vegas

1976 New Jersey voters approve legalized gambling in Atlantic City as part of an
urban renewal effort.
1987 Supreme Court decision allowed the introduction of gaming of Native
American lands.
1991 Riverboat gambling is introduced in Illinois and Iowa. This model soon
spread throughout the Midwest and South.
1990s Las Vegas operators, following the lead of Steve Wynne, moved away from
the ‘loss-leader’ philosophy to rooms, food, beverage, and entertainment.
2000s US-based Casino companies expand internationally

Casino gambling is introduced into horse-racing and dog-racing tracks.

Learning Describe the various components of modern casino hotels

Objective 2

Learning Explain how casinos have been integrated into larger hospitality operations
Objective 3

 Hotels
 Food and Beverage
 Casino Operations
 Retail Operations
 Entertainment
The Mirage Effect

Year or Era Notable Happenings

1990s Las Vegas operators, following the lead of Steve Wynne, moved away from
the ‘loss-leader’ philosophy to rooms, food, beverage, and entertainment.
Instead, they worked to upgrade their offerings and to reduce their reliance on
gambling revenue by increasing their non-gambling revenue. Yes, to be sure,
gambling is their draw. But, they have diversified their offerings.

 Enlarged and Upgraded Rooms

 Celebrity Chef Restaurants
 Marquis Entertainers in Residence
 High-End Retail Shops
 Ultra-Trendy Night Clubs
 Non-Gambling Attractions (art work, car collections, unique pools,
amusements, etc.)

Typical TOTAL Revenue Breakdown

Component % of Total
Gaming 39%
Rooms 24%
Food 15%
Beverage 6%
Other 16%

Total 100%
Typical CASINO Revenue Breakdown

Component % of Total
Table Games 45%
Slots 51%
Poker 2%
Race Book 1%
Sports Book 1%

Total 100%

Typical CASINO Expense Breakdown

Component % of Total
Bad Debt 3%
COMPS 28%
Gaming Taxes 8%
Payroll 19%

Total 70%

Typical ROOMS Occupancy Breakdown

Room Treatment % of Total

Sales – Rooms 75%
COMPS - Rooms 25%

Total 70%

Overall Occupancy Rate 90% of rooms available

Typical Casino Employment – Distribution of Employees

Component % of Total
Casino 23%
Rooms 19%
Food 27%
Beverage 7%
General and Administrative 13%
Other 10%

Total 100%
Learning Understand the basic principles of casino operations
Objective 4

Casinos offer guests a change to combine games-of-chance (gambling), lodging, food and
beverage, entertainment, and retail all in one place in a resort setting. To be considered gambling,
the following conditions must be present:

 Something must be wagered (the bet)

 A random event determines the outcome (game, roll, flip, etc.)
 A pay-out occurs as a result of this random event to those who have wagered correctly.

Casinos offer 2 types of gambling:

1. Social Gambling – individuals bet against EACH OTHER. Winning is a zero-sum game.
That is, one can only win if another losses.

a. Poker players play/bet against the hands of their competitors

b. Given the random nature of the game, each player enters each hand with (in
theory) an equal probability of success. Then, cards are distributed and decision-
making begins to occur to determine winners and losers.

2. Merchantile (or Commercial) Gambling – individuals best against THE HOUSE. Winning
is a zero-sum game. That is, one can only win if another losses.

a. All games found in a casino are merchantile games.

b. Lotteries are merchantile games.
c. HOUSE EDGE – small mathematical advantage for the house. Over time, the
house always wins. But, in the short run, players can/do beat the house.
d. KEY: If the house didn’t always win over the long-run, the industry would fail to
exist as the incentive to offer the business would not exist.
i. Poker is the notable exception here. The HOUSE EDGE disappears for
the Casino. The house simply takes a ‘fee’ or ‘rake’ as a way to
compensate themselves for providing the poker game. So, poker tends
not to be an overly profitable game. But, it is offered as a service to
gamblers to ensure their buyer loyalty.

Tracking the House (ensuring fair games for participants)

 The Handle – Total Amount of Money Bet in the Game

 The Win – The Handle minus money paid out on winning bets. (The WIN refers to the
money HELD BY THE CASINO)

 The Hold Percentage – the % of the total Handle that is retained as a win.

Slot machines – hold percentage is very close to the house edge

Table games – hold percentages are higher (thus, house makes more money here)
COMPS (Complimentary Rewards for Players)

Casinos provide COMPS to players to attract their business. So, we may provide COMP rooms,
COMP food, COMP entertainment to attract a player to come gamble in our casino.

BUYER LOYALTY PROGRAMS (part of what marketers call CUSTOMER RELATIONSHIP

MANAGEMENT) help track player performance (frequency, betting levels, etc.)

Operating Department % of COMPS

Rooms 25%
Restaurants 17%
Beverages 35%

Blackjack Explained

The object of the game of blackjack is to get a hand that is a higher total than the dealers but
which does not exceed twenty one. While multiple players can play the game at the same time
they are not playing against each other, each player is playing only against the dealer. Each player
will be dealt two cards face up. The dealer will deal himself one card that is face up and one that
is face down. Number cards count for their face value while face cards all count for ten. An ace
can count as either a one or an eleven.

If a player is dealt a two hand card he has a blackjack and has won, usually this pays at three to
two rather than the even odds that are usually paid. If the total is less than twenty one the player
has the option to hit and take another card or to stand where they are. A player can take as many
cards as they want but if they go over twenty one they lose so you have to be careful.

After each player has finished playing their hand the dealer will turn over the card that was dealt
upside down. At this point the dealer may have to hit or to stand depending on what the card is.
The dealer does not have a choice about whether he hits or stands, he will hit on anything sixteen
or under and stand on anything that is seventeen or over. After the dealer has finished his turn any
hand that has a total that is higher than his but less than twenty one will win. If the dealer goes
over twenty one any hand that did not go over twenty one will be a winner.

Craps Explained

Craps is played with two dice so the possible numbers rolled are 2 through 12. The craps table
layout looks confusing because there are many different bets that can be made and because the
layout at both ends of the table are exact mirrors of each other. (It is merely duplicated in this
manner to allow more players at one table.) However, only one bet is played in basic craps play,
and it is placed on only one area of the layout. The rest of the layout can be ignored. Craps play
can look confusing and fast-moving because players can place multiple bets on different areas of
the layout at the same time. However, craps play can actually be slower than blackjack due to the
fact that the dice often have to be rolled multiple times before the outcome is determined.

When you place a basic craps bet, all you are doing is placing a wager that the person who is
rolling the dice will roll the number he needs to win. You're essentially just along for the ride. You
are in no way in competition with the person rolling the dice. In fact, you are betting on how
lucky they are with the dice. "The house" (the casino), on the other hand, is hoping the person
rolling the dice isn't so lucky. This is why you'll often hear a lot of hooting and hollering and find
a sense of camaraderie around a craps table. When the person rolling the dice does good, all the
players do good.

Roulette Explained

Roulette is a casino game named after a French diminutive for little wheel. In the game, players
may choose to place bets on either a single number or a range of numbers, the colors red or black,
or whether the number is odd or even.

To determine the winning number and color, a croupier spins a wheel in one direction, then spins
a ball in the opposite direction around a tilted circular track running around the circumference of
the wheel. The ball eventually loses momentum and falls on to the wheel and into one of 37 (in
French/European roulette) or 38 (in American roulette) colored and numbered pockets on the
wheel. Player attempt to predict (with their bets) where the ball will fall.

Poker Explained

Poker is played from a standard pack of 52 cards. (Some variant games use multiple packs or add
a few cards called jokers.) The cards are ranked (from high to low) Ace, King, Queen, Jack, 10, 9,
8, 7, 6, 5, 4, 3, 2, Ace. (Ace can be high or low, but is usually high). There are four suits (spades,
hearts, diamonds and clubs); however, no suit is higher than another. All poker hands contain five
cards, the highest hand wins.

Some games have Wild Cards, which can take on whatever suit and rank their possessor desires.
Sometimes jokers will be used as wild cards, other times, the game will specify which cards are
wild (deuces, one-eyed jacks, or whatever). Hands are ranked as follows (from high to low):

 Five of a Kind
 Straight Flush
 Four of a Kind
 Full House
 Flush
 Straight
 Three of a Kind
 Two Pair
 Pair
 High Card
Baccarat Explained

Baccarat, pronounced as bah-ca-rah, came from Italy during the middle Ages. The precise
ancestry and development of the game is still a topic of controversy. It has been said that baccarat
came about because of some spiritual practice during that time. Some say baccarat was invented
by a guy named Felix Falguierein around the 1480s. Whatever the case may be, baccarat became
one of those games only the elite was allowed to play. As you know this feature of baccarat has
come to change through the years.

So, how exactly is baccarat played? The banker first deals baccarat from a “shoe” that contains 6
to 8 decks of cards. A “shoe” is where the decks of cards are placed for keeping during games and
for dealing. The banker then gives two cards to the players and to himself. Wagers maybe made
on the banker’s “hand” or set of cards, the other player’s hand, or to a tie. A “tie” happens if the
players have the same total value of cards.

The objective of baccarat is to get as close as possible to the number nine. Queens, kings and
jacks have a value of 10, aces have 1 and the rest are taken at face value. The player gets the total
value by adding the values of the two cards together. If a two-digit sum results, only the value of
the last digit is taken into play. The player with the highest value is declared the winner.

If the player gets a total value of 6 or more with the first two cards then he must stand, which
means not get any more cards. If, however, he gets a hand with a total value of 5 or less then the
player must get another additional card.

If the bank has an initial total of 7 or more then he must stand. If he gets a total from 0 to 2 then
he must draw one card. If in the event that the bank’s total value fall in between 3 to 6 the draw
will depend on whether the other player will draw.
Learning Discuss the different positions within the gaming industry
Objective 5

 Dealers
 Slot Attendant
 Marketing Director
 Casino Surveillance

Croupier Table Section Asst. Game Floor Casino

Experience Supervisor Section Manager Manager Manager
Supervisor

Trends

 Growing importance of non-gambling revenue on casino performance.

 Continued marriage of gaming and lodging.

 Continued government scrutiny of industry by government (ensuring fairness and that casino
taxes are identified and collected)

 Continued focus on customer service to attract and retain players/guests

 Continued development of industry and employment opportunities