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Gaming Guru

Rod Smith
 

Check Those Bags and Try Your Luck

3 August 2005

Helen Parks from suburban Chicago didn't know she was paying for operations at McCarran International Airport last month when she stopped to play the slots before heading to the baggage carousels. She thought she was just having a little fun at the start of a Las Vegas vacation.

"There's nothing I hate more than waiting, so why not?" she said. All I did was lose a little money, but it got my juices going faster for the vacation. And it's one of the things I like about Las Vegas -- no waiting. Wherever you go, there's something to do, even at the airport."

Ka-ching. The sound of quarters dropping on tin is one of the first sounds visitors hear when they arrive at McCarran and one of the last they hear when they leave.

But the airport slot machines are big business for operator Michael Gaughan, the airport, the gaming industry and the local economy.

Parks was one of nearly 41.5 million visitors passing, or stopping to play, the 1,300 slot machines at McCarran each year. Together those airport slot players pay for the biggest share of the operating pie at the nation's sixth-largest airport.

For foot traffic, that makes McCarran the biggest commercial casino in the country and probably the world.

Airport spokeswoman Elaine Sanchez said the airport's share of the total slot take at McCarran last year, $54.4 million, was $38.5 million.

Gaughan, who has operated the airport slots through his wholly owned Michael J. Gaughan Airport Slot Concession for 20 years, said that is an increase of more than 20-fold from 1985, when he started airport operations and the county's take was just $1.5 million.

Terrorist attacks and security alerts make little difference to the business, Gaughan and Sanchez.

"From year one, it's just kept growing without much in fluctuations," Gaughan said.

Sanchez said today slot revenues account for 30 percent of all concession revenues at the airport and 15.5 percent of all its revenue.

"Slot machines represent the largest single source of revenues we have," she said.

They're also important in helping lure visitors into other concessions, including shops and restaurants, because they're willing to spend more time at McCarran than they might elsewhere.

Ed Rogich, vice president of marketing for International Game Technology, whose company made the 1,300 airport slots, said one visitor who asked not to be named recently won $1 million on a Wheel of Fortune progressive slot machine.

"Basically, it's (the airport's) operation, but it's a great partnership that lets us showcase some of our progressive slots to an international audience," he said. "The slots provide entertainment, and with early check-in, they make a great entertainment venue. The airport is looking for entertainment venues for visitors, and (the slots) help entertain customers and raise revenues for the airport."

His company, the world's biggest slot maker, is just completing the conversion of airport slots to cashless, or ticket in-ticket out. Players may like the switch.

"In the past, we've had players actually miss flights while they waited (for their payouts) or to complete reporting requirements," Rogich said.

Gaughan said the cashless slots have become very popular with players, especially at the airport, because it cuts the time waiting for payouts.

"I had the first all ticket in-ticket out casino -- Suncoast -- and I was scared to death," he said. "But people today love ticket in-ticket out. There's no waiting, service is faster and they can mail the ticket in if they need to catch a plane or get to their hotel."

In 20 years, Gaughan said, there have been three major changes in the airport slot machine operations: the huge growth in the number of arrivals, the security gates and the attitude of the county airport manager.

The two most recent airport managers, incumbent Randall Walker and his predecessor, Bob Broadbent, have supported the slots; their support helped boost expansion and raise revenue.

The security gates at first cut into slot play, but then built business as long lines came to be expected, Gaughan said. The security gates' effect on airport slot play has lately been neutral as passengers are processed more quickly, he added.

Revenue from the slots for the airport and for Gaughan have correlated closely with the number of arriving and departing passengers, he said.

Gaughan pays the airport 86.5 percent of the gross revenue, adjusted for gross shared costs, for the right to operate the slot concessions, Sanchez said. The revenue is important for the county because federal regulations require the airport to operate like a business and prohibit using tax dollars for operations.

"So the slot revenues are a very important component because it allows us to have stable rates. They make us a very good bargain (in terms of landing and other fees) compared with other destinations," Sanchez said. "The airlines are doing well right now, and the slot revenues give the airlines an incentive to come here when fees are higher elsewhere."

Despite the success, Gaughan warned not to look for more airport slot machines anytime soon.

"I walked the airport recently with Randy Walker and there's just no more room. The airport's just too busy," he said.