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Gaming Guru


Atlantic City - The Next Generation

30 January 2011

Everyone knows the news from Atlantic City is grim. The economy and competition from neighboring states is devastating the casinos' bottom lines. In the strongest properties monthly profits continue to decline. The weaker properties are watching their losses mount and barely hanging on. In an effort to boost the bottom line, casino executives are tapping a new revenue source and it has little to do with the traditional gambling market. The new target demographic is the "Jersey Shore" crowd. It is the "Snookies" and "The Situations," the hard-partying, free-loving, more-money-than-brains crowd.

Traditionally Atlantic City has relied on day trippers and weekend warriors as its base. They were the target demographic and the casino marketing department targeted them with promotional offers.

The day trippers came in by bus. They were strictly low rollers. Many had coupons that provided food credits or slot play to offset the bus fare. They played slots mostly, maybe a few table games. Many were senior citizens looking to escape the monotony of daily life. Just getting out of their apartment was a treat. They arrived with their canes and oxygen-equipped wheelchairs. Some brought a sandwich to save money.

Casino executives knew that they were not making much money from them individually but they made it up with volume. Plus they were a reliable source of visitors.

The weekend warrior was the middle-level player. In life most were at the height of their earning potential and made a comfortable living. They had ample discretionary income for entertainment and recreation. These folks would come down with their wives or girlfriends. They would have dinner and maybe catch a show. The wife would hit the spa while the husband hit the craps table. They hoped to win, but saw the loss as the price for a fun weekend. Most expected some comps to offset their losses and make them feel like a welcomed, valued guest.

Depending on their level of play the casino profits for each would vary, but in the long run the casino was sure to make back any comp expenses many times over.

Today, competition has provided the day trippers with casinos closer to their homes. They no longer have to endure long, unpleasant bus trips that bust their bladders. There is a casino much closer to their homes. The home casino is probably a "racino" that does not have all the amenities of Atlantic City, such as opulent hotels and gourmet restaurants, but the day tripper has no interest in that. They just want a place to hit the slots and a get a cheap meal.

The weekend warrior has become an endangered species. They have been devastated by the economy. They worry about their job security. Many have not gotten a raise in salary for several years. Their 401 retirement plan is now a 201. They have also lost the false sense of wealth the real estate bubble had provided them. Their house now appraises for much less than it was three years ago.

Some were using their homes as ATM machines. They would regularly refinance to draw money to satisfy their every desire. "Home equity" was used to buy cars, boats and finance vacations and gambling, Many of these people now find they owe more on their mortgage than the home is worth.

In an effort to stay alive, the casinos are changing their focus. They have turned their backs on their traditional customers. They are less inclined to pursue players that have limited profit potential. They have cut back on comps. The low-rolling day tripper is not receiving offers from marketing. The weekend warrior's profit potential is being scrutinized by accountants using mathematical algorithms that would confuse Einstein. Comps are doled out very sparingly.

The casino executives have turned their casino marketing gurus' sights on the younger crowd, the self described "Guidos" and Guidettes". They are the hip, moneyed twenty-somethings.

This demographic does not have the responsibilities and concerns of the older patron. They are not concerned with mortgage payments, college tuition and shrinking retirement savings. They live for the day. They think nothing of blowing a week's pay partying on a Saturday night.

Visit the hot properties on a weekend evening and you will find the hotel lobby jammed with the tattooed, steroid-inflated muscleheads and orange-skinned scantily clad nymphets lining up to get a suite. This crowd is not clipping coupons for two-for-one buffets or lining up for a free toaster. They pay full price for everything.

The main draw is the "Club Scene". It may be "The Pool" at Harrah's, "Mixx" at The Borgata," or "Dusk" at Caesars The new Jersey Shore crowd will willing fork over their cash to enter the casino clubs, where they will be pounded by Hip-Hop, Rap, and techno disco.

Those desiring the full V.I.P. experience will reserve a cabana or private booth, where the minimum cover charge could rise to the thousands of dollars. They will rub elbows with hip hop stars and the newest hot celebrities.

If the full V.I.P. experience is too pricey, there is also the new phenomenon known as "Bottle Service". This will also provide the V.I.P. experience but at a lower price point. Those availing themselves to "bottle service" usually are seated in a special section at a reserved table. Cocktail waitresses that look as though they just stepped out of the Victoria Secrets catalog provide glasses, ice, a mix or two and the bottle or bottles of liquor of their choice. The big sellers are Gray Goose Vodka, Hennessy Cognac and Patron Tequila. The charge for each bottle is usually several hundred dollars.

To the Jersey Shore crowd, the gambling is secondary. After the clubs close, it is either a night of passion with a newfound friend or a drunken stroll around the casino.

Since they were unlucky at love some will try to court Lady Luck. Fortunately for the casino this crew has little or no knowledge of the various casino games. The house edge is not in their vernacular. They believe one bet has the same chance of winning as any other. The casino executives are well aware of this.

Game placement decisions take advantage of their ignorance. High house edge games and those with inferior pay-outs such as 6:5 blackjack beckon the hapless gambler.

For example, in the Borgata, as the club lets out the patrons gravitate toward the action of the casino floor. In doing so they pass "The Big Wheel," which is placed not far from the entrance of "Club Mixx".

They recognize this from carnivals and the boardwalk arcades that dot the New Jersey shore. The rules are simple and they feel comfortable with the games. They have no idea that the house edge ranges from about 11 to 25 percent. They eagerly place their cash on their favorite lucky number and cheer the occasional win as the house quickly grinds them down.

Whether these young patrons will be the longterm savior of Atlantic City remains to be seen.

If you do not have a similar club scene in the casinos in your area, it is probably coming. There is just too much money there for the properties to ignore.

Scan works in a top-secret government agency and he is therefore not allowed to reveal his real name or show a picture of himself. We’ve used a clip-art drawing to indicate his nature. Needless to say, he is an extremely bright guy. He is an active member of the private members-only Web site where he posts his thoughts and gambling theories on a regular basis.
Scan works in a top-secret government agency and he is therefore not allowed to reveal his real name or show a picture of himself. We’ve used a clip-art drawing to indicate his nature. Needless to say, he is an extremely bright guy. He is an active member of the private members-only Web site where he posts his thoughts and gambling theories on a regular basis.