Online Casino Score

One of the biggest advantages of online and land-based casinos is the loyalty programs. It is important to take full advantage of these offerings because you earn as you play. The more you play, the more comps and free merchandise you receive. Online casinos even offer money credited back to your account. The primary advantage is that the player does not need to enter a code or make a claim, they just earn.

The Process

It is important for players to first evaluate different loyalty programs as they vary greatly. During the evaluation, factor in the pros and cons of the overall casino, the graphics, number of games, number of players, etc. Most programs utilize comp points based on the amount wagered. These comp points can be used to purchase items from their store, buy-ins for tournaments and equate to real cash back.

There are always guidelines as to how much the player must bet and how much each credit is worth. Also review the method in which credits are given to the player. Some are credited each day and others each week. Credits added each month are much more difficult to track. Also, the larger the number of credits, the better chance there is of a mistake being made.

An additional area to consider is how long the casino will honor unredeemed comp points before they expire. If they expire in a short period of time then it is not feasible and worthwhile to deposit your money. If they never expire and the casino is full of activity (meaning they won’t go under), then you should play here.

Betting Levels

Many casinos base their reward programs on the amount of money wagered. This is consistent with bonus reloading. For instance, a reload bonus of 5 percent may be a low tier while 10 percent may represent high deposits. Players should take full advantage of this tiered structure. Also, many casinos provided a quicker turnaround of comp points for those at higher betting levels, commonly referred to as VIP levels.

Players should not solely rely on the casino to track their comp points. Keep a spreadsheet handy for tracking. Also, if on the border between regular and VIP levels, it may be beneficial to wager at a higher level just to reap the increased advantages of that stage. Casino loyalty programs are a great way for the player to earn more from their betting. Also, they are an excellent method of keeping players at their gaming site.

The Riviera Las Vegas is set to receive new gaming equipment, compliments of their parent company’s reorganization plan. With $291 million in debt and outstanding liabilities, Riviera Holdings Corporation filed bankruptcy with reorganization on July 12^th, 2010. This includes their Las Vegas and Colorado locations.

Their Savior

The Riviera Holdings Corporation is being bailed out by investors. Hotel and gaming guru Barry Sternlicht of the Starwood Capital Group has acquired most of the debt and plans to save the company.

The Numbers

In the second quarter of this year, the Riviera Holdings Corporation lost $4.2 million vs. a loss of $13.5 million just one year ago. However, revenue was down slightly over $2 million. These loses can be attributed to their isolated location at the Northern end of the Las Vegas strip in addition to the economy. With an abundance of hotels rooms and expo center space, all gaming properties are struggling.

During the past economic boom, each acre on the Riviera’s property was worth $30 million. This has significantly declined to $6 million per acre. This is attributed, once again, to their location as well as a lack of development of the surrounding area.

Recent Announcement

This past Friday, the company announced that they are planning to conserve cash with little investment in capital improvements. New, small improvements include, window treatments, exterior paint, exterior and interior signage improvements and elevator upgrades. Other improvements include, new slot machines and gaming software and hardware. These will be applied to both of their locations.

The Reorganization Plan

The proposal includes replacing its $291 million in debt with a $50 million term loan and possibly another $30 million. After the company emerges from the debt, it will be worth $216.5 million.

Projections

Maintenance and spending will jump from $3.6 million in 2010 to $9 million by 2015. Also, net revenue is expected to increase to $140 million by 2011, $145 million by 2012 and $171 million by 2015. Interest will resume once they emerge from debt will cause the company to lose additional money until 2015.

Many casinos are opting for bankruptcy with reorganization. Like in sports, the casino industry is experiencing a few rebuilding years. They will remain in decline then emerge stronger than ever. Once the Riviera and other properties are able to reinvest in capital projects and improvements, they will become quite the spectacle.

Financial resources needed to keep the Problem Gambling Center afloat are beginning to run thin. The center is operating at only 70 percent of its usual budget due to state cutbacks derived from the global recession. In addition to the cutbacks, many more people with gambling addictions are seeking treatment.

Increase in Elderly Attendance

The Problem Gambling Center is the largest public, non-profit walk-in establishment in Nevada. One office on Sahara Avenue in Las Vegas is seeing a large increase in treatment for the elderly who are the most vulnerable citizens. The numbers show that slightly over 43 percent of those seeking treatment are over the age of 51. In the past, those over 50 years old only represented 30 percent of all patients.

Treatment Services

In 2009, 150 problem-gamblers finished the center’s outpatient program. Over 1,000 others were treated by the staff through group counseling, basic financial planning and family therapy. With four months remaining in 2010, the numbers are already approaching last years. Unfortunately bankruptcies and foreclosures are the seeds of gambling addiction. Also, many elderly individuals are depleting their retirement savings through gambling.

As a result of the growing number of seniors attending the Problem Gambling Center, they created a senior outreach program 3 years ago. The program provides presentations, one-on-one help and in-home therapy visits. Also, the center picks up and drives the disabled to sessions in a handicapped-accessible vehicle.

Economic Effects

The center is primarily focused on improving the lives of individuals. Many center employees believe that individuals young and old are hitting rock bottom much more quickly during these tough economic times. As a result, they are seeking immediate help due to their lack of funds.

The Problem Gambling Center’s Numbers

This year the center has a budget of only $400,000. This derives from donations by slot-machine vendors and casinos. Unfortunately a few casinos had to cut funding due to the economic climate. This is not a reflection that they do not want to help; they simply lack the money. Luckily, last week the Association of Gaming Equipment Manufacturers sent a surprise $50,000 check to the center. This will help them get through the next few months.

The Future

Next year, the center’s two-year funding commitment from Nevada ends thus calling for an appeal to lawmakers requesting additional money. Due to budgetary problems, they may not get much or any money and must search for alternate sources.

The Problem Gambling Center provides a much needed service in the gambling Mecca of the world. Unfortunately the future of the center looks grim. Hopefully, some business entity will step in and donate to keep this necessary establishment alive.

The opening of CityCenter Las Vegas brought fun and excitement. Month’s later statistics are showing that there are more hotel rooms in Las Vegas than people to fill them. Evidence is appearing that indicates CityCenter is stealing business from other resorts.

Single-Property vs. Multi-Property Owners

This information is much more detrimental to single-property casinos such as, the Riviera and Tropicana which have more to lose than their competitors like MGM International who own multiple establishments on the Las Vegas strip. In the end, the single-properties are generating less money and have a smaller customer base to market too.

Also, visitors are staying at fancier, more expensive hotels because they have lowered their rates (which are aligned with budget hotels) due to the global recession. Many properties are back in the black, but aren’t making as much as they would if CityCenter wasn’t open.

The Numbers

From January through May of this year there was a 1.5 percent increase in visitation to Las Vegas. On the other hand, the number of overall hotel rooms jumped by 5.6 percent over the previous year. The occupancy rate throughout the city from January to May was 80 percent which is a 10 percent decrease from 2007 when Las Vegas tourism was at its greatest.

The total cost of CityCenter is $8.5 billion. The whole complex continues to struggle, not yet turning a profit. In the second quarter of 2010, an operating loss of $128 million dragged down MGM International’s earnings.  MGM believes that its competitors are losing even more money due to decreased gambling and room revenue.

MGM’s Aria consists of almost 30 percent gamblers. This is higher than any casino and resort in the Las Vegas area. This is due to marketing specifically to the gaming community who are expected to take the place of the traditional business. The gamblers are MGM loyalty program registrants that receive discounts.

Causes of a Decrease in Revenue

The global recession is the primary cause for the decline in the leisure and entertainment business. Also, with the opening of CityCenter, there has been a huge influx of competition in a tight market. Additionally, there is currently an overabundance of convention space but not enough conventioneers to fill it.

The combination of these things adds up and results in a major decrease in business. Casinos and resorts will need to look to new methods if they want to attract new guests and retain the loyal. Promotions and offers don’t seem to have the same effect as they once did. A new idea must be implemented for the gaming industry to jump back on its feet.

Investor Carl Icahn recently made the decision to continue to hold construction of mega-casino, Fontainebleau until the economy vastly improves. He pulled Fontainebleau out of bankruptcy and despite talks of selling the property; he’s decided to hold on to the asset. So far, he’s acquired a $52 million profit on the property.

Icahn has not commented as to whether construction on the property will resume soon. The location of Fontainebleau is at the northern edge of the Las Vegas Strip, between the Riviera and the Sahara.

Construction of the hotel-casino stopped last summer due to bankruptcy from the first developer, Turnberry Associates. The banks halted funding for a $2.9 billion, 3,815-room resort and casino. Due to a poor economy, declining revenue forecasts, a lack of condominium sales and high costs, the company filed Chapter 11. To finish this project, the cost is estimated at $1.5 billion.

Icahn Entertainment’s official response was to hold on to the property until the global economic climate greatly improves. This was stated today during a regulatory filing hearing.

Icahn Entertainment also stated that they’ve completed a fair-value study to ascertain the property’s market-worth. The study used an as-is cost model to compare to other market properties and their sales approaches. The total value of the unfinished property in this market climate is valued at $200 million. $91 million of the total was due to its prime location on the Strip.

Currently, Icahn Entertainment controls Tropicana Entertainment Inc. They have hotels and casinos around the country. The most popular areas are Las Vegas, Atlantic City and Laughlin, Nevada. Recently, the Tropicana in Las Vegas dodged a bankruptcy thus causing it to be partially owned by a separate set of private investors that are not part of Tropicana Entertainment.

The forecast for Las Vegas gaming venues has plateau’d. Although casinos are showing little growth, they are not losing any customers either. This is a clear indication that they have hit rock bottom and can only improve from this point. Holding on to Fontainebleau will prove to be a wise and profitable decision once the economy stabilizes.

Although holding a property with no growth for a significant amount of time can be costly, the long-term benefits greatly outweigh the short-term costs. As the economy improves, more visitors will travel to Las Vegas looking for excitement and entertainment. This property could become a major factor in fulfilling that need.

Boyd Gaming is implementing a nationwide multi-property player loyalty program into all of its casinos. The old program used at the Gold Coast, Sam’s Town and the Orleans will be replaced by B Connected. All points and benefits registered under the old program will be transferred.

Reason for Change

The change gives the company a more streamlined program with consistent rules and the customer reaping the benefits by being able to gamble at any Boyd location and collect points. Boyd Gaming currently owns 13 properties across the United States, all of which will be on board with the B Connected player loyalty program.

The Program

There are three levels to B Connected, each with different rewards and benefits. These include Ruby, Sapphire and Emerald memberships. All three memberships benefit from discounted rooms at all locations with the higher level status receiving larger rate reductions.

Another great feature is the B Connected iPhone and iPad app. Users can view point balances in real time, exclusive offers for members and receive personalized messages. Also players can view casino news, event information, schedules, dining and gaming specials, utilizing the slot search feature, a Boyd Gaming locator and make hotel reservations.

An additional helpful feature of the B Connected program is the online community created exclusively for loyal customers. Although launched only last year, the community has over a quarter of a million registered users. With online access, users have the ability to personalize their home page, update account information, view Las Vegas sites with the Boyd Gaming webcam network and all other features included in the iPhone app.

The Slot Search

Of these features, the most interesting and advanced is the ability to search for specific slot machines. On their website or from your phone, you can fill out a form with a drop down box listing all properties, denomination from $0.01 games to $500, the game type such as keno and reel and the specific game name. From 10 Carat to Zulu Dawn Progressive there are literally hundreds of options.

With the implementation of B Connected, Boyd Gaming is setting the industry standard with a centralized loyalty program. This is advantageous for the customer as they are able to use their card at locations closest to them and accumulate points. It’s also beneficial for the casino because they are one of the first to institute this technology. In time, all casinos will utilize a consolidated player loyalty program; until then Boyd Gaming is at the forefront of their industry.

The shareholders of the Las Vegas Sands Corporation filed another lawsuit in federal court recently for securities law violations. This is the second class-action suit filed against the company since May 24^th.

Shareholders are looking for restitution from the massive drop in the Las Vegas Sands stock from $144 per share in 2008 to less than $2 per share in 2009. Due to the struggling economy, investors have become disgruntled with the corporation and their business methods for attracting new customers.

There has not yet been a response from the Sands’ attorneys. The defendants in this lawsuit include:

• The Sands Corporation
• Chairman and CEO Sheldon Adelson
• President and COO William Weidner

These defendants are accused of making bogus statements regarding the organization’s prospects which resulted in an inflated stock price. The first suit was filed by O’Mara and O’Mara attorneys on behalf of Frank Fosbre Jr. The current suit was filed by attorneys from Bernstein Liebhard LLP and Mark Wray on behalf of Wendell and Shirley Combs.

Since 2009, the Sands have implemented a few capital raising exercises to compensate for the major loss. Also the company has opened the Las Vegas Sands’ mega resort in Singapore. These actions have increased the stock to $24 per share.

In a previous lawsuit occurring last year involving the same defendants over the same issues, the judge ruled in favor of the Sands Corporation and its members. The judge stated the attorneys for the shareholders failed to show any mismanagement by the board members of the Sands Corporation. Also, the attorneys didn’t present a breach in their financial duties.

Despite a lack of charges filed, Adelson used $1 billion of his own money to reunite the Sands Corporation. Also, since the board members acquired property in Macau, they helped boost the stock to $140 per share. These decisions in the short-term were extremely risky and could result in the collapse of the Sands Corporation; only time will tell.

The Sands has been a major player in the gaming industry for many years. Although expansion is always a positive trait, timing must accompany the decision to ensure financial success. Since several lawsuits continue to arise due to complaints from the shareholders, the Sands Corporation may in fact be mismanaged by their board of directors. In time the financial stability of the company will be clear as day.

The Nevada Council on Problem Gambling believes marketing to gambling addicts is an acceptable practice as long as the casino property’s amenities are focused on instead of the actual gaming inside. They feel companies need to continue to be considerate to problem gamblers, but not ignore them completely.

New Marketing Focus

The Nevada Council on Problem Gambling states that casino marketing agendas should cater to those that do not gamble. This includes customers that do not have pathological gambling problems and choose not to gamble as well as those that are afflicted with gambling addiction.

Since many casinos have developed into more than just betting by offering numerous entertainment options, there are many chances to lure non-gambling customers to the area. Casinos are encouraged to learn the culture of non-gamblers and find and develop programs that will appeal to them.

The Statistics

A recent study found that 75 percent of customers eat at casino establishments, 60 percent attend the shows, 48 percent attend bars, 41 percent shop and 35 percent utilize the property recreational facilities like the pool, bowling and movie theaters.

Promotional Items

One promotional item that casinos continually distribute are loyalty cards and gambling coupons. Giving these to recovering gamblers is detrimental to their progress which, over the long term, will result in lost money by the casino.

Solutions

One alternative to this is each casino should distribute colored bracelets to indicate a non-gambler. That way they don’t have the annoyance of being flooded with giveaways. Another method is to eliminate having employees immediately saying, “good luck” to all guests. Instead, greet them with a simple, “how are you doing today” or as they’re exiting, “have a nice day.” This will go much further with those that are not gamblers.

Additionally, The Nevada Council on Problem Gambling recommends giving the customer a choice to which type of giveaway they’d like to receive. That way, everyone collects something. Expand loyalty cards to make them useable for amenities on the property.

Although most casinos display the national gambling problem hotline around their property, sometimes this isn’t enough. Small modifications to the way they conduct business can go a long way.

Las Vegas gaming companies now have a social and ethical responsibility to their community and customers to downplay gambling and attract patrons in other ways. Since Las Vegas is the entertainment capital of the world, they should have no problem finding news methods of attracting customers.

Las Vegas continues fall victim to the repercussions of the economic recession with fewer visitors, all of whom are spending less money in the city. It was recently reported that overall winnings on the Las Vegas strip fell by 6.3 percent during the month of May. The biggest hits were taken on the Baccarat tables and at the sports books. This is the second straight month of decline.

Clark County May Results

Across the state, combined winnings by all casinos have fallen by 4.7 percent. Although better than May 2009 still not good for business. Gambling winnings dropped 0.7 percent at downtown Las Vegas casinos while falling 8.8 percent at North Las Vegas properties. On the other hand the Boulder strip saw a rise by 5 percent, but Mesquite casinos fell off by 5.8 percent. Overall the amount of winnings across Clark County fell by 5 percent which was 6^th straight month of decline.

Other Nevada Counties

Washoe County claimed a 7.9 percent decrease in winnings, South Lake Tahoe 12.5 percent decline, Elko County was down 1.1 percent along with Carson Valley. It was a tough month for casinos throughout the state of Nevada.

The Strip Breakdown

The Las Vegas strip accounts for more than 50 percent of Nevada’s profits. In May Baccarat earnings fell nearly 37 percent which ended a period of 12 month increase in profits from the game. Ironically casino guests wagered more in Baccarat but the “hold” within the game dropped from 13.3 percent a year ago to 8.2 percent in May. This simply means the casinos didn’t have luck on their side.

Similarly the profits at sports books fell significantly by 42 percent as bettors won more at the beginning of the NBA Playoffs. On the other hand Blackjack profits improved by 2 percent along with a 21 percent increase in craps. This was only the second improvement in the past 10 months. Finally, slots went up by 3.5 percent while roulette fell 14 percent.

Overall the state of Nevada collected 3.69 percent less taxes than the previous fiscal year. Although these drops are a direct effect of the recession (and a little bad luck), as always the economy will rebound and so will the casinos. In the interim, it’s simply going to take a little innovative and creative though to lure guests back onto the casino floor.

The long-standing Riviera Hotel and Casino filed for Chapter 11 bankruptcy this past Monday; a sad day in the Las Vegas casino community. However the Starwood Capital Group is contributing to the takeover of both the Las Vegas and Colorado locations. The Riviera stated that more than two-thirds of its $270 million worth of debt has been supported by holders with the primary debt holder being Starwood Capital.

Barry Sternlicht

Starwood Capital is headed by Barry Sternlicht, a hotel industry giant. During the late 1990’s he ran the Caesars World. He is also well known for expanding the Heavenly Bed at Westin Hotels. Up to this point he hasn’t commented on this progressive takeover. He is also well known in the real estate industry as being an entrepreneurial real estate investor. Recently, Barry raised $3 billion in two years for investment in loan portfolio Corus Bancshares.

Terms of the Deal

Starwood Capital and other investors completed a deal with Riviera Holdings to exchange their debt for controlling equity stake in the company. Also they will provide $10 to $30 million in financing to the Riviera. Other terms of the deal were that $220 million of the debt will be paid back leaving only around $50 million.

The Future

There are plans to continue to operate as the bankruptcy filing has had little effect on the Riviera’s operations. Their plans are to restructure its indebtedness and allow for new investment into the company. The hope is to emerge in a much improved financial situation with a stronger operational advantage.

Unfortunately stockholders will receive no return on investment. The Riviera foresees little recovery for equity holders. This filing will provide the Riviera properties with a viable capital structure and additional financing to expand. Since both Riviera Holding properties are continuing to show a positive cash flow, the money will be used to           pay operating costs in a timely manner and fund maintenance expenditures.

Reasons for the Filing

The primary reason for filing Chapter 11 is the economy. The Riviera lost $4.5 million in the first quarter of 2010. The company has been hurt by declines in trade show and convention attendance and the establishment’s isolated location.

The Riviera appears to have a strong rebound plan. With proper money management, a rise in the global economy and clever marketing techniques, they may be able to return to their old profitable ways.