Do Casinos Make More Money from $200 Slot Players or Whales?

Do casinos make more money from $200 slot players or $200,000 whales?

There are two kinds of casinos: those that cater to whales and those that don’t.

A casino cannot, all of a sudden, put out a whale shingle. For example, executives at Arizona Charlie's can’t suddenly decide that it’s now going to accept $250,000 bets at baccarat. First of all, it doesn't even offer baccarat. Secondly, it doesn’t have the supporting infrastructure to make such a move. No limos, no fancy restaurants, no penthouse suites. No international marketing department. No accounting department that understands the economies of whale scale. No cage personnel familiar with international transacting. No dealers who can handle millions with aplomb.

And, of course, no bankroll that can withstand the huge swings of fortune seen in the megaroller business. Thus, by design, Arizona Charlie's makes most of its money (apart from the occasional local big player who might wander into the place) from pikers.

MGM Grand, on the other hand, is in the megaroller business. MGM Grand can fulfill all of the above whale requirements. And the MGM would much rather take $20 million off of one Japanese industrialist than win $1 off of 20 million slot players, or $20 off of a million of them, or even $200 off of 100,000 of 'em.

It makes sense. Although MGM Grand has to put up Mr. Kawasaki and his entourage of eight in five Mansion suites with butlers, private chefs, and chauffeurs, plus pony up for shopping sprees and trips abroad, etc., and has to give him a 15% discount on losses over $5 million and a couple of $250,000 chips as walking-in-the-door money, it’s just one guy in the high-limit baccarat pit -- with a dealer, a boss or two, a cocktail waitress, and maybe a security guard. The MGM might have to spend a couple million for its shot at Mr. Kawasaki’s $20 million (and it also has to gamble that luck won't swing his way, though almost all whales are net losers), but it’s quick and clean.

On the other hand, the low-limit slots and blackjack and crap tables require a mind-boggling amount of infrastructure. Thousands of machines. Hundreds of tables and dealers. Four or five levels of bosses. Dozens of cocktail waitresses. Cage and soft-count personnel. The slot club. A big marketing department promoting to a database of millions. Taking that same $20 million, but only $200 at a time, is slow and messy.

The bottom line is that the casino has to invest less to take a lot off of a handful of players than it does to take a little off of tens of thousands of players.

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Kevin Lewis Apr-29-2023

I disagree

Which weighs more--all the elephant poop in the world or all the mouse poop?

[email protected] Apr-29-2023

Binion's Horseshoe

Can you describe, how Benny Binion was able to do this, with a small Downtown joint?

Brent Peterson Apr-29-2023

Overall

But do the casinos make more money off the total number of smaller players or the total number of whales? Assuming the casino can handle both types of players, unlike AZ Charlies.

dblund Apr-29-2023

Re: Overall

I think it is safe to say that the answer depends on when you ask.  The whale business may be more profitable this week, but last week 'Mr. Kawasaki' came in a bad mood, his stocks tanked so he wasn't playing his normal rate, and he left after only 2 days because of trouble at one of his businesses.  That business has to be more volatile by nature, where the lower end would generally be more constant day to day and month to month. The higher end business also has to be more competitive, as there is a much smaller pool of customers to attract. 
Keeping the masses coming must support the more profitable but riskier business of bringing in the whales.  It is the mix that makes the mega-resorts work.

salukidean Apr-29-2023

Poop cost

Kevin, there is no cost of infrastructure in pooping though.   No one pays cocktail waitresses to com around and serve drinks to all the elephants and mice taking a crap.  If they did, it would cost a lot more to get the mice drunk while they are relieving themselves.

O2bnVegas Apr-29-2023

sigh...

IMHO, asked and answered.  

Good question, good answer, and that from those closest to the subject matter.

Candy

[email protected] Apr-29-2023

Binion's - All GAMBLERS Welcome!

Benny wanted EVERY type of gambler in his joint and therefore offered better odds than most casinos (100X odds for instance on $1 craps) and lower AND higher limits than most. What they didn't do was "subsidize" prima donnas and divas that expected a red carpet to be rolled out with extravagent "freebies". The "old school" gamblers loved the joint because it offered a fair game with free or cheap drinks and a $2 steak dinner for everyone.

Mr. Seafood 21 Apr-29-2023

Small players

Although I agree with what you say in your answer, in the long run the casinos would not be open if they only catered to the High Roller. They are paying the bills and keeping the doors open because of the small players that come to Vegas and lose their $200.00 to $2000.00 on a 3-4 day trip.

IdahoPat Apr-29-2023

Imagine that ...

... a response from true experts in the field, yet people are still challenging what's being said. Reminds me of all the armchair epidemiologists we had during the pandemic.

As for Benny Binion, he'd take any wager, but there was a condition: Your max bet had to come with your first bet.

Tabbycat Apr-30-2023

Where do you get off of

I recommend you get off of the temptation to write “off of,” especially thrice plus once in one sentence. 😸

Doozey May-01-2023

Poop

Fertilizer is expensive.

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