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Best of Liz Benston

Gaming Guru

Liz Benston
 

Looking in on: Gaming

13 September 2007

LAS VEGAS, Nevada -- Harrah's Entertainment Chief Executive Gary Loveman, a former Harvard Business School professor and MIT grad who perfected the art of converting average folk into repeat gamblers, is keen on developing research that isn't slot machine or green felt-oriented.

Loveman's wish list for the proposed hotel research campus for UNLV's William F. Harrah College of Hotel Administration, called INNovation Village, doesn't sound sexy but would flesh out practices that are already a big part of the profit engine at casinos.

Research could include testing so-called yield management software, to help hotels such as those owned by Harrah's maximize prices for rooms on busy weekends, and examining efficient staffing levels.

High-tech, math and management skills that can be applied across the hospitality industry are important at Harrah's, where a majority of employees don't work in gaming operations, Loveman said.

Research could be as mundane as testing new kitchen grills, chair fabric or hotel room lighting for makeup application or bedside reading, hotel college Dean Stuart Mann says. Laundries, janitors and security companies could also test new devices and methods.

Alongside some of the biggest high-tech companies around, interested vendors include InfoGenesis and Micros - companies that make inventory management and point of sale systems for hotels. Mann said he has consulted chief information officers at other gaming companies for their input. These companies expect to join Harrah's in commissioning private research at the campus as well as participating in public studies benefiting the entire industry, Mann said.

• • •

The state's gaming revenue report for July is the strongest evidence yet that local gamblers, a result of home foreclosures, soaring mortgage rates and a slump in home values, haven't been as free with their cash this summer.

As measured by the total volume of slot machine wagers rather than the amount won from customers (a less accurate measure of overall demand because it depends on luck and excludes wagers won back by patrons) the Boulder strip was down 1 percent compared with July 2006, North Las Vegas was down 8 percent and the rest of the Las Vegas Valley, excluding downtown and the Strip, was up less than 2 percent.

Then why do the revenue numbers shown in the report, up 6 percent in these regions, look better?

Casinos report slot revenue only after money is physically pulled from the machines. Typically, months that end on a weekend aren't reported until the following month because the cash isn't taken out until Monday. Because June ended on a weekend, revenue from that weekend is included in July's total.

Volume figures are strictly month-to-month comparisons because they are read by real-time electronic metering systems monitored by computers.

The locals market has been "softer than expected" the past couple of months, although the state can't pinpoint why, said Frank Streshley, a senior analyst with the Gaming Control Board. Construction industry layoffs were partly to blame in the winter months, when the board last polled operators as a result of lower volumes. That's when operators reported lower spending and fewer customers than usual, Streshley said.

• • •

MGM Mirage's proposed partnership with Dubai World for a half interest in CityCenter and a 9.5 percent stake in the gaming giant caught Wall Street off guard and has become the investment equivalent of bagging a rare whale.

The holding company for the Persian Gulf state already plans a 25 percent equity stake in another MGM Mirage project - its nearby joint venture resort with Kerzner International. There could be further upside for the gaming giant besides freeing up more of the company's own cash.

Once Dubai World is licensed in Nevada, some think the entity could increase its stake in MGM Mirage, allowing the company to go private with help from majority shareholder Kirk Kerkorian.

Looking in on: Gaming is republished from Online.CasinoCity.com.