Generally speaking, the experts we surveyed expect "more of the same," in the words of Raving Consulting President Dennis Conrad. In other words, the sort of discount and cash-back offers you see now will continue, "but a little richer and more of them."
"Eventually it will pay off for Vegas," Conrad says of the coming slot boom in California, "as it always has," by creating more players. In the meantime, he expects the effects to be felt mostly at second-tier Vegas properties. He singles out the Riviera Hotel and Casino, the downtown casinos, and those at Primm as the ones that will probably be most aggressive in their counter-marketing.
"Southern Nevada has not been openly hurt," says Navegante Group CEO Larry J. Woolf, who has operated casinos on the Strip, in downtown, and in Carson City. "I’m sure there has been [business] siphoned off by Indian gaming, primarily in the older clientele that would drive to Laughlin and Las Vegas," who he predicts may make fewer trips per year now. "The person who normally flies probably won’t be affected too much."
Without giving away trade secrets, Woolf opines that, since casinos make a science of player tracking, they’ll now make offers "targeted to the customers that have a proven track record ... They can give them a free room," not to mention the traditional lure of a "good solid food product."
Jeremy Aguero, a principal at Applied Analysis, is even more sanguine, saying that it’s important to remember that the expansion of gambling in California has had minimal impact on Nevada and has perhaps even been a positive. Second-generation California casinos are more competitive, he notes, but are still not "destination" properties. Quarter-slot players might now gravitate to a Pechanga or other tribal casino but, "realistically speaking, we don’t expect a measurable impact. ... We’re operating today at 90 to 91% occupancy."
Not quite so sanguine is William Eadington, director of the Institute for the Study of Gambling and Commercial Gaming, at the University of Nevada-Reno. He reminds us that tribal casinos have had a "pretty dramatic" effect on northern Nevada and may have played a role in the "very low single-digit growth" seen in Las Vegas. "They’re not dramatic in terms of 'time to close the doors,' but they are noticeable.
"We’ll remove a lot of the capacity constraint," Eadington adds. Meaning? "They’ll get more players to the machines." Which is good news if you find Strip slot floors too crowded for your taste. But as tribal casinos expand to 5,000-7,000 slots, they could build facilities comparable to Station Casinos’ Red Rock Resort. "If that occurs," warns Eadington, "they could be seen as viable substitutes."
Still, as Conrad points out, it’s not as though southern California tribes are competing in a vacuum. They also have to vie with each other for slot players, which plays into the hands of the So. Cal. customer. Conrad describes southern California as a tight marketing environment that's now ripe for a "gradual softening. There would be some loosening of the marketing piece to fill those machines, I would imagine."
