Abstract This paper examines the exciting world of the gaming industry. By studying the history, present state, and future of gaming in the United States our analyst team will present a probing overview into this rapidly changing industry. We have collected and analyzed secondary information from a variety of quantitative and qualitative publications. Our perspective of the gaming industry will be conveyed by an understanding of business practice, and will be concluded with a Christian perspective on our findings. Table of Contents Introduction: Lifestyles of the Gamer and Gambler pg. 3 History of Gaming pg.
4 A Brief History of Las Vegas Gaming pg. 7 Competing Firms in the Industry pg. 9 Market Forces Impacting the Industry pg. 15 Future Trends for the Industry pg. 18 Christian Perspective and Conclusion pg. 22 Introduction: Lifestyles of the Gamer and Gambler The bright lights seem almost blinding, the smoke creates a haze around your face, and the intoxicating abundance of themed ambiance floods your senses.
You are in Las Vegas, also known as Sin City, with the hope of striking it rich. The glamour of decadence makes you feel like a celebrity, you are the king for the weekend. Haley (2004) writes, "From the deep-pile carpets to the space age chandeliers, wealth permeated resort hotels on the Strip. Publicists dramatized the lives of the rich and famous, and at every turn patrons might be reminded that casino gambling had traditionally been the exclusive province of upper classes around the world." (p. 64) Today, Las Vegas symbolizes the aspirations of a culture drawn to the ideal of getting rich without working hard. A culture obsessed with celebrities, certain that if they can live their romanticized lifestyle of indulge, they too could become famous in their own worlds.
Gaming is not a recent phenomenon confined to the desert of Las Vegas, but has been a growing industry that has hit the jackpot in the past twenty years. McGowan (2001) records, "In 1984, all forms of gambling (casinos, lotteries, pari-mutual betting: the three segments of the gambling industry) accounted for less than $15 billion in revenues. In 1995, these gambling activities generated $55. 3 billion in revenues, nearly a 400 percent increase in 11 years.
Gambling had become the largest component of the American entertainment industry." (p. 3) (Exhibit 1) Gaming has evolved from cave antiquity to prohibited activity to state assisted fundraising. The gaming industry has moved from the backstreets to the forefront of American entertainment culture. Its journey has been prodded by governmental regulation and societal mores. However, the future of the gaming industry may burn brighter than any hotel on the Las Vegas strip. By analyzing the past, present, and future of gaming we will provide insight into the excitement of how this industry has beaten the odds to become the billion dollar giant it is today.
History of Gaming From Antiquity to the Colony The American Gaming Association (2004) has recorded evidence that dice have been found in early Egyptian tombs. They share Chinese, Japanese, Greeks, and Romans were also known to play similar games that involved skill and chance. These games have been dated back to 2300 BC. In America's history, Native Americans and various European colonists also have brought a rich history of chance games. These games were described by explorer Roger Williams in 1643 as he entered Rhode Island. He had found that the Narragansett Indians had created games in which gods determined their fate and chance.
State Sanctioned Lotteries (1607 -1840) The Revolutionary War sparked the first organized form of gaming in the United States. The approved form was not a dice or skill game, but a lottery system. As the only approved gambling form at the time wartime fundraising could be accomplished by these games of chance. McGowan (2001) writes, A few of these lotteries were sponsored by states to help finance their armies, but most lotteries were operated by non-profit making institutions such as colleges, local school systems and hospitals in order to finance building projects or needed capital improvements." (p.
4) National Lotteries (1860 - 1890) Another war brought another lottery system. The Civil War divided the nation, but gaming united the North and South in its promise to raise revenues for their respective sides. The South was the first to finance their depleted resources with a lottery system. Reconstruction of roads, bridges, and buildings was imperative to the health of the losing counterpart.
McGowan (2001) explains, "The primary difference between this period of lottery activity and the previous period of lotteries is the scale of ticket sales. Whereas in the previous lottery boom sales of tickets were confined to local regions, these southern lotteries took on a national scope and ironically were particularly popular in the North." (p. 4) Pari-Mutuel Betting (1920-1964) During the time of Prohibition gaming started to become what it is today. Although a strong social stigma was attached to gambling, its popularity continued to increase.
Instead of ignoring the industry or placing greater penalties upon gamblers, states decided to join in on the action. McGowan (2001) writes, the two states, Kentucky and Maryland, which had the longest tradition of horse racing, decided to legalize wagering on horse races taking place in racetracks that had long and noble histories. Kentucky and Maryland sanctioned pari-mutual betting for two reasons. First, these states were searching for a means to replace the excise tax revenues that were lost due to the imposition of Prohibition by the Federal government." (p. 5) Pari-mutual betting was a technology that allowed winners to take a large percentage of pool bet, while leaving a smaller percentage in which management, operations, and the state retained.
State Operated Lotteries (1964-1993) The success of pari-mutual betting led states to capitalize on other aspects of the world of gaming. The social stigma of gaming was now beginning to fade, and differing regulations from state to state could not harness the growing industry. State lotteries grew in clustered regions as locals traveled to borders to purchase lottery tickets in states where it was lawful. States without lotteries, and moreover without the economic benefits from ticket sales were forced to set up gaming in their own states. Between 1980 and 1990 gaming began to transcend from strictly lottery to other means of state supported activity. McGowan (2001) shares, 'During this time, 25 states not only approved lotteries but other additional forms of gambling such as off-track betting, keno and video poker machines.
All of these new forms were meant to supplement the revenue capabilities of lotteries. By 1993, only two states (Utah and Hawaii) did not have some form of legalized gaming. (p. 7) Gaming had now become a viable part of entertainment in the U. S. ; however the industry's growth had only begun.
Casino Gaming (1993 - Present) In 1993, casino gaming became the largest revenue builder for states, surpassing lotteries. Three factors led to the rise in casino gaming. These factors included casinos in Las Vegas and Atlantic City becoming resort destinations, Indian gaming regulations weakening, and the innovation of Riverboat gambling across the country. Gaming now became a business cleverly marketed to middle class America.
McGowan (2001) explains, this development returns the control of gambling operations to private concerns, since the casino gaming operations are owned and operated by private corporations although they are certainly heavily regulated by the states." (p. 9) A few large private corporations now drive the industry that seems to be gaining more and more momentum every year. These private corporations mostly reside in one place, the fabulous Las Vegas. A Brief History of Las Vegas Gaming Las Vegas Defies Prohibition and Recession In the Nevada desert illegal gambling, not gaming was played with little resistance from local government.
Hsu (1999) writes, "Between 1910 and 1931, gambling, although illegal, remained widely available because there was little or no enforcement of the laws against gambling." (p. 4) After the Prohibition era, a time of recession hit Las Vegas as hard as it did the rest of the country. Illegal gambling had continued to run the city, but had not yet been accepted as viable business in the rough desert. Hsu (1999) relays, "Noting that government was either unable or unwilling to suppress illegal gambling, they concluded that the state should legalize gaming, obtain the tax and economic benefits that gaming could produce, and reduce the corruptive effect of illegal and uncontrolled gambling." (p. 4) Las Vegas led the charge to turn "gambling" to gaming, in making it a legal part of American entertainment. However, Las Vegas' growth did not merely come from its acceptance of gambling, but the creation of "The Strip" was driven by hotel growth.
El Rancho: The Birth of the Strip Las Vegas had merely been a roadway that connected California to Salt Lake City, Utah. The desert provided little appeal for business and community. The extravagant resort destination we gawk at today could never have been realized if it were not for Thomas E. Hull and his car trouble. De Matteo explains, "In 1938, Thomas E. Hull, a hotelier who had built and managed eight hotels...
had envisioned the complex when his car broke down in front of a vacant lot right next to the Las Vegas city limits. While sitting on the side of the road in the scorching sun watching the traffic go by, he said 'What I wouldn't give to jump into a pool!' When Hull returned to Los Angeles, he attended a board meeting and announced, 'Gentlemen, I want to build a resort hotel in Las Vegas, Nevada.' (Las Vegas Strip History, 2004) Hull had envisioned his hotel as an oasis for weary travelers. Many other hotels followed suit with expansive hotels, that clustered together to form the Las Vegas Strip. From Mobsters to the Mirage The Strip grew in strength over the years and organized crime or the "Mob" had a hand in its growth. Many hotels in large part were owned by various crime families in which they would retain partial earnings from gaming proceeds.
Hsu (1999) writes, "The association of mobsters with casinos in Nevada, particularly Las Vegas, has, over the years, resulted in much negative publicity for Las Vegas. This association lasted from the 1940 s until the 1980 s in some casinos, and one unfortunate result is that many people associate all casinos with organized crime, though the "mob" was never involved in all casinos, even in Las Vegas." (p. 14) The growth of the gaming industry took over the special interest of organized crime. Large resorts heavily funded by private organizations pushed the mob out of the strip.
Hsu (1999) explains, "With the opening of the Mirage in 1989, a new era dawned: the age of the entertainment mega resort. A resort could offer at least 2, 000 and as many as 5, 000 rooms; a decorative theme; interior and exterior design features that attract and entertain visitors; lots of shopping; a variety of types and venues fro entertainment; and activities for the whole family, if desired." (p. 16) The Mirage opened up doors to the glamour and excess that is Las Vegas. In the next section we will analyze the key competitors that make up the Strip and the Gaming industry we know today. Competing Firms in the Industry Over the past several years, there have been a number of changes as mergers and acquisitions have reshaped the gaming industry. At the end of 2000 the industry was a combination of corporations, some focused primarily on gaming, while others are multinational conglomerates.
The largest competitors, in terms of revenues, combined multiple industries to generate both large revenues and substantial profits. According to Standard and Poor's (2004) the five primary competitors in the industry are; Caesars Entertainment (previously Park Place Entertainment 2003 revenue of 4, 455), Harrah's Entertainment (2003 revenue of 4, 324), MGM Mirage (2003 revenue of 3, 909), Mandalay Resort Group (2003 revenue of 2, 491), and Trump Hotel and Casino (2003 revenue of 1, 161). (p. 36, all numbers in millions) Park Place was founded from the separation of the lodging and gaming operations of Hilton Hotels in December, 1998. Park Place merged with the Mississippi gaming operations of Grand Casinos, and then was soon bought out by Caesars Entertainment. The company now comprises a total of 29 casinos, 20 of which are located in the United States.
The company's most recent venture is Paris Las Vegas Casino and Resort located next to Bally's near the center of the famous Las Vegas strip. The 760 million dollar project features a 50-story replica of the Eiffel Tower, 85, 000 square-feet of casino space, and 13 restaurants. Caesars Entertainment is the largest casino operator in the world, with approximately 2 million square-feet of gaming space, 28, 000 rooms, and revenues of 4. 5 billion in 2003. (Caesars Entertainment, 2004) Harrah's Entertainment Inc. in 1973 became the first casino to be listed on the New York Stock Exchange.
Now the company is primarily engaged in the gaming industry, with casinos / hotels in a variety of areas including; Reno, Lake Tahoe, Las Vegas, and Laughlin Nevada, as well as in Atlantic City, New Jersey; riverboats in Joliet, Illinois, Vicksburg and Tunica, Mississippi, two Indian casinos; and one casino in Auckland, New Zealand. In January 1999 it merged with Rio Hotel and Casino, Inc. in Las Vegas. In 2000, it sold Showboat and purchased Players International.
Harrah's Entertainment now has approximately 1, 258, 000 square feet of casino space, 11, 562 hotel rooms, and 86 restaurants. (American Gaming Association, 2004) Harrah's attempts to target the experienced gambler who likes to play in numerous markets by establishing strong brand names of consistent high quality. MGM Mirage (formally known as the MGM Grand) owns and operates eighteen hotels and casinos worldwide. Some of these properties include the MGM Grand Casino, the Mirage Casino, and the Bellagio.
The MGM Las Vegas is located on approximately 116 acres at the northeast corner of Las Vegas Boulevard. The casino is nearly 171, 500 square-feet in size, and it is one of the largest casinos in the world with 157 table games. (American Gaming Association, 2004) In March, 1999 MGM and Prima donna Resorts Inc. merged, resulting in the ownership of New York New York Hotel and Casino and three hotels on the California/Nevada border. There have been rumors that MGM is looking to establish itself with a casino / hotel on the boardwalk in Atlantic City in the near future as well. Mandalay Resort Group is one of the major players in the Las Vegas, Reno, and Laughlin markets in terms of overall casino square footage and hotel rooms.
Each Mandalay location has a distinctive atmosphere, and it seems as though the Mandalay corporate structure allows each site to utilize that difference to their best advantage. In the past Mandalay had the reputation of being the bargain spot for "low class" rollers. However, Mandalay has worked hard to broaden its market which now targets the middle to upper class gambler as well as the family-oriented vacationer. In March, 1999 the largest and most expensive casino for Mandalay Group was opened, Mandalay Bay, at a cost of 950 million (excluding land). (American Gaming Association, 2004) This is the third addition to what is known as the Mandalay Mile, a contiguous mile at the southern end of the Las Vegas strip that currently contains the Mandalay Bay, Luxor, and Excalibur resorts. Mandalay owns and operates eleven properties in the state of Nevada.
Another aspect competing firms are taking action on now is emphasizing entertainment for the entire family at their "theme" properties. Many architecture and interior designs allude to certain places or periods of time. This is being done in an attempt to differentiate and add additional interest for incoming customers. Examples of this are the newly constructed Venetian (representing a modern day Venice, Italy with Gondola's going throughout the resort), Paris (representing modern day Paris with a replica of the Eiffel Tower), and the New York New York (representing modern day New York with a roller coaster winding throughout the top of the casino).
All these recently built casino's are desperately trying to differentiate themselves so they can stand out in visitors minds and hopefully bring them back for multiple visits in the future. A number of newer casinos are also featuring retail stores inside as a means to attract casino winner's money. It also appeals to individuals who might not be attracted to gambling but enjoy the shopping of Vegas. In order to receive a better understanding of the Las Vegas strip, which remains the largest U. S. gaming market with more than 125, 000 hotel rooms and hosting more than 35.
8 million visitors in 2000 the map has been provided in Exhibit two. (American Gaming Association, 2004) Now that we have taken a closer look into the primary competitors in the gaming industry it is beneficial to look into the upcoming mergers and acquisitions that will have an enormous impact on the industry, especially in Las Vegas. In mid-2004, a pair of proposed mergers was announced which would ultimately combine four of the casino industry's largest companies into two. According to S&P (2004), "This past July Harrah's Entertainment stated that it had signed a definitive agreement to acquire Caesars Entertainment Inc.
in a transaction through which Caesars's hare holders would receive 66. 3 million Harrah's common shares and 1. 8 billion in cash." (p. 12) This monumental deal, which is subject to numerous approvals, is likely to be completed sometime around mid-2005. Around a month earlier, in June, MGM Mirage and Mandalay Resort Group announced a merger agreement whereby MGM Mirage would pay around 4.
8 billion for Mandalay's common stock. (S&P, p. 12) After the acquisition, MGM Mirage would operate and / or have an ownership interest in about 28 gaming properties, including an especially large presence in Las Vegas. S&P looks for the deal, after various approvals, to be completed by mid-2005. (p. 12) S&P (2004) suggests, "These large gaming industry mergers will reduce price competition for room and convention business, especially in Las Vegas, which should ultimately help the profitability of the combined companies." (p.
13) Perhaps McGowan addresses the issue for these mergers head on when he stated, "An industry consolidates, for two reasons: first there is a mature market that needs to be "rationalized"; and second, economies of scale enable firms to successfully compete in the industry. In the case of the casino industry both factors seem to operate." (p. 40) With the four largest casino operators merging into two mega-corporations cost savings and economies of scale are likely to prove very beneficial for the future of these companies in the casino industry. After these four major players in the industry (soon to be two) most competition comes from Native American Gaming and the newest and most controversial form of gaming, internet gambling. In the past two years large gains in revenue growth have come to Native American casinos. In 2003 gaming revenues at Native American casinos totaled around 15.
1 billion, or around 36 percent of the industry total. (S&P, p. 3) A lot of the gaming revenue at Native American facilities comes from 43 high-volume locations. (S&P, p. 3) The primary reason for this significant growth in Native American casino revenue can be attributed to more expanded and more state of the art facilities. In the past few years Native American casinos such as Pechanga, Morongo, and Fantasy Springs have added large hotel facilities, therefore moving the classification from casino, too resort.
In doing this they are trying to entice customers to stay at a "Vegas style" casino but without having to fly or drive nearly as far. The new wave in gambling due to its convenient access is internet gambling. From a business standpoint, Standard & Poor's views Internet gambling as both a threat and an opportunity for traditional casino companies. (p. 14) If prospects for internet-based gambling draw newer industry entrants (an example being an online casino) their presence could easily take market share away from older more traditional casino companies. On the contrary, some of today's bigger casino companies, like Caesars, Mandalay, and Harrah's have the financial power and brand image that could make them fearsome participants in the online world of gaming.
The commercial casino industry does not seem to oppose Internet gambling because of a fear of competition. In fact, many casinos would like the opportunity to market their services over the internet. Internet gaming is estimated to be a multi billion-dollar per year industry. However, according to Lessani (1998) there are four primary concerns with this form of gaming: 1. The potential of fraud over the internet 2. Children's access to gambling sites 3.
State regulations that "lock out" commercial casinos from the Internet gaming industry (Nevada being one of them) 4. The need to preserve state revenues generated from legally enforced and state-run gambling operations. (p. 1) Although the federal government does not ban internet gaming, many states have passed laws regulating its use. S&P states, "Even if the US Congress passes new laws banning various forms of internet gambling, such activity is unlikely to end, and enforcement could be difficult. Some Internet-based gambling is currently offered from foreign locations where operations are beyond the jurisdiction of US officials." (p.
7) The American Gaming Association expresses concern over Internet gambling because Internet gambling companies are not regulated for fairness and integrity, their revenues are not taxed equitably, and those who wager may not be protected or guaranteed the same quality gaming experience they might expect from a commercial casino company. Market Forces Impacting the Industry In every industry both internal direct competition as well as external forces exists. Each holds the potential to significantly impact an industry and must be taken into consideration. Although the market forces may not be as apparent as direct competitors; a company must have a contingency plan in the event that the market forces pose a negative threat on the industry.
Some of the market forces that influence the way the gaming industry operates include the tourism and leisure (alternative means of vacation), transportation, consumer confidence, macro economic factors, world events, regulations, as well as the economy. The tourism and leisure industry significantly impact the gaming industry due to its dependence on tourism including both business and leisure travelers. The two largest and oldest gaming areas Nevada and Atlantic City collected an estimated $14. 1 billion in casino winnings in 2003 alone (view exhibit three), $9.
6 billion in Nevada and $4. 5 billion in Atlantic City, much of which resulted from out-of town visitors. (S&P, p. 11) Due to gambling's classification as a leisure and recreational activity; it is a customer's discretionary income that is allotted for gambling. This can be spent on alternative means of vacation such as Orlando, Florida, or the national parks and is easily "affected by factors such as personal income, consumer confidence levels, and people's willingness to travel." (S&P, p. 16) Equally important to the gaming industry is transportation.
With a majority of the revenues coming from business and leisure travelers these customers need a means to arrive at the casinos and other various locations. Many customers arrive by airline due to the long distances traveled. "At Boyd's three hotel / casinos in downtown Las Vegas, Standard and Poor's estimates Hawaiian visitors accounted for about 62% of total occupied room nights in 2003." (p. 21) Customer perception of the airline industry in terms of punctuality and safety plays a large part in their willingness to travel as well as the future potential to book and cancel flights. The cutbacks in airline routes have also made it less convenient to reach travel destinations. The most influential market force is consumer confidence.
The perception of the American economy has the greatest impact on the American people's willingness to spend. If they have a positive perception they are much more likely to spend money specifically on discretionary decisions. Due to the fact that casino visits and vacation travel are classified as discretionary expenditures these are the first decisions to be postpone or forfeit if a consumers confidence is low. Consumer confidence embodies subcategories such as macroeconomic factors and world events, such as terrorist threats, which produce negative results such as higher insurance and energy costs, inventory shortages, and political unrest.
After the terrorist attacks of September 11 th, casinos such as those in Las Vegas recorded loses much more severe than those relying on drive in customers. Following the attacks, casino winnings in the Las Vegas strip were down 10. 6% in comparison to the 3. 0% of Atlantic City who relies primarily on drive-in and local customers. In a case as severe as this, the tourism, transportation, and gaming industries all suffered based on their status as discretionary expenditures. (S&P, p.
17) Every state and industry is subject to rules and regulation which force a company to adjust accordingly. The gaming industry is no exception. They are subject to numerous regulations ranging from state and national down to the individual casinos. A large majority of casinos are likely to face zoning review which can affect its size, location and other various attributes.
Not only must a licensed casino conform to regulations within the industry; some states such as Illinois and Indiana make it especially hard to obtain a casino license by limiting the number distributed. This is done to give each license a stronger sense of importance and an asset. According to S&P (2004), "Casinos are now looking at facing higher tax rates as well. Numerous states have tapped the gaming industry for additional tax revenue, in the expectation that voters will be less likely to protest increases in casino taxes than in sales or income taxes." (p.
7) From an industry perspective, higher taxes can mean lower expected returns on capital. Also, encumbering casinos with this burden could result in the need for them to reassess the amount of new investment for future casino projects. According to the American Gaming Association (2004), taxes paid by US commercial casinos totaled four billion in 2003 (this total excludes Native American facilities, which are tax exempt or tax advantaged in many states). Recently the internet has been helping various casinos fill there vacancies. Many times now third party web sites book hotel rooms at various casino / hotel properties, often at a discounted rate.
Online sites such as Hotwire, Priceline, Expedia, Travelocity, and Orbitz have helped a great deal with room bookings for various casinos. S&P (2004) states, "Caesars Entertainment said in November 2003 that year to date, it had sold more than 500, 000 domestic room nights through its 18 U. S. web sites-31 percent more room nights than in year 2002." (p. 14) Because of this increase in booking capability via the web it has helped customers examine and compare lodging and other travel costs. Most likely this will restrain casinos from being able to raise room rates.
This would be truer in areas where there is a significant concentration of lodging, like in Las Vegas. With the internet now, more availability and competition brings cheaper prices. Nevertheless, in the past several years new booking sites on the internet have had an impact on casino hotel bookings and vacancies, especially in high concentration areas. Future Trends Truly successful companies understand the importance of looking into the future, especially in an industry as competitive as the gaming industry. Companies must recognize the changing trends within an industry and adjust to meet consumer's needs before the future becomes the present. The following trends can be seen in the industry today that will soon shape the gaming industry of the future: Native American casinos, international expansion, lodging, coin slots, as well as internet gambling and technology.
When looking at the industry as a whole it does not seem as though the gaming industry is going away anytime soon. In fact, not only do casinos provide tourism, jobs, and a boost for the local communities but it also provides a great amount of taxes for the states in which casinos exist. In a statement made by the American Gaming Association in 2003 taxes from US commercial casinos totaled $4 billion. According to S&P, "In mid 2004, in California, Governor Arnold Schwarzenegger had reached an agreement with Native American tribes that could lead to a sizeable increase in the number of slot machines at some of the casinos in the state... in exchange for helping to provide the state with $1 billion in funding in the year ahead." (p. 3) When focusing on casino revenues Native American casinos stand out through their large numbers and revenue growth.
A significant number of Native American casinos are being constructed due to their benefits. Native American casinos are not subject to the same state and local taxes as those of other casinos because they are covered by federal law. Standard and Poors (2004) makes note that Native American casinos are seeing the largest gains and expected to be a source of growth for the industry in years to come. (p.
4) In southern Connecticut two high volume casinos are expected to surpass $1. 8 billion; each claiming revenues greater than any of Atlantic City's 12 casinos. The United Kingdom has become an attractive destination for a few of the US casino companies. If gaming laws were to become slightly more flexible in the United Kingdom there is great potential for the future possibility of development opportunities. Look for these new casinos to be placed near population centers and transportation stations where they are easily accessible and visible. In the past, consumers would visit a casino to experience the thrill of gambling.
Now they not only gamble but also expect to be amused by mammoth entertainment complexes that cost billions of dollars to build. Examples of this are Mandalay Bays Shark Reef, MGM Grand's tigers, New York New York's roller coaster, and Stratospheres Insanity the ride. On a slightly smaller scale casinos are attempting to modify through the addition of lodging as well as retail outlets. This is mainly a concern for those casinos that are heavily dependant on "day trippers" and who would like to attract over night guests and individuals who seek an alternative to gambling.
This would help increase casino revenues as well as boost the local economies. The addition of stores in a casino would attract customer's winnings as another way for the casino to make a profit. S&P (2004) declares, "Over the long term, we expect that non-casino activities will be used more frequently to draw a larger visitor base to gaming markets and keep guests entertained." (p. 11) Three major developments that are sure to have an impact in the future are: player cards, slot technology, and linked jackpots.
(American Gaming Association, 2004) Many casinos now offer a players card, which is much like an airlines frequent fly er card. The card is inserted into a slot machine prior to play, or it is run through a scanner at certain table games. The card is used to track player demographics and playing habits. How these cards will continue to develop is a big step in the future of the casino gaming industry. Now with these cards players can earn cash, various prizes, and complementary rooms, meals, and other amenities by accumulating points on their player cards. Gaming industry suppliers like International Game Technology have been developing new types of slot like games with themes revolving around Wheel of Fortune, the Addams Family, and the Richard Petty Driving Experience.
The goal of this new technology is to keep visitors excited and entertained. Sierra Designs just recently introduced a Raining Diamonds slot machine. The machine not only pays out money but also rewards customers with genuine diamond jewelry. There are a variety of new and innovative games on the market such as video based games, multi-game machines, and interactive games.
Linked jackpots pool revenues from around gaming areas; this makes it possible for customers to get paid out millions in winnings if a jackpot is hit. It will be interesting to see what the future holds for slot game technology. The need for innovation and excitement with slot games has become more and more of a necessity in today's gaming environments. Coin operated machines are a casinos primary source of revenue. In fact, coin operated machines reached the point where they account for more than half of all casino gaming revenues.
This is attributed to the fact that it is much easier to "feed a slot machine" than learn the rules of table games specifically for new gamblers. This trend can be seen through the mass increases in slot machines that can be found at horse and dog tracks. When these tracks introduce the slot machines the number of visitors and gambling customers has increased. Casinos are now allocating more space on the floors for slot machines in order to attract a larger customer base.
Slot machines are also much more stable in comparison to the instability of table game revenues. Without a doubt the fastest growing and most undeveloped area of gaming revolves around the relatively new dimension of internet gambling. Christiansen Capital Advisors addresses that from conception in August of 1995 many followed and five years later, 250 to 300 companies around the world operated more than 1, 800 internet gambling web sites offering various wagering options, including sports betting, casino games, lotteries, and bingo. Internet gambling revenue in 2003 was estimated at 5. 691 billion and is projected to triple by 2009, according to Christiansen Capital Advisors (CCA). CCA estimates that nearly 12 million individuals gambled on the internet in 2003; approximately 4.
5 million of those gamblers were from the United States. With all the hype and governmental regulations controlling certain issues related to gambling on the internet it will be interesting to see if in the future the government steps in to make a decision on banning internet gambling. However, with the widespread popularity and extreme difficulty with laws (some internet gambling operations are operated outside the U. S. making them out of governmental jurisdiction) it will be nest to impossible to stop this extremely popular and emerging market in the gaming industry. It is amazing to think that internet gaming did not even exist ten years ago and now it is a multi-billion dollar a year industry.
What the future could hold for internet gaming has many analysts astounded. It will be fascinating to see what the next few years unveil for this up and coming market. Christian Perspective and Conclusion The gaming industry has gained acceptance in our culture as America's new entertainment pastime. With market share growing due to huge conglomerate hotels packed with slot machines and card tables, the industry continues to be a large part of our country's makeup. In contrast, for many Christian followers the idea of gambling does not always match up to conservative values. Lears (2003) writes "Debate about gambling reveals fundamental fault lines in American character, sharp tensions between an impulse toward risk and a zeal for control.
Those tensions may be universal, but seldom have they been so sharply opposed as in the United States, where longings for a lucky strike have been counterbalanced by a secular Protestant Ethic that has questioned the very existence of luck." (p. 2) Whether Christians ought to gamble is an issue within itself. We are not addressing the implications of gambling with a faith follower's walk with Christ. On the other hand, it is interesting to address Christians' idea of luck, grace, and even wealth. Multiple bible verses shun a man who chases after material wealth.
Yet if gaming is merely a means for entertainment, then can the chase for luck truly be discounted as a sin? James warns Christians in the New American Standard Bible, "For the sun rises with a scorching wind and withers the grass; and its flower falls off and the beauty of its appearance is destroyed; so too the rich man in the midst of his pursuits will fade away." (Jas 1: 11) As followers of Christ, our analyst team believes in the growth of the gaming industry and its enjoyment as a viable means of entertainment. However, gaming in efforts to pursue riches will never override our faith in the plan of diligence God has chosen us to follow. Exhibit 1 Source: Breakdown of U. S. Entertainment Expenditures as of 1999. (McGowan) Exhibit 2 LAS VEGAS STRIP MAP Exhibit 3 CASINO MARKETS BY ANNUAL REVENUE Gross revenue is earnings before taxes, salaries and expenses are paid - the equivalent of sales, not profit.
CASINO MARKET 2002 ANNUAL REVENUES Las Vegas -- Strip $4. 7 billion Atlantic City, NJ $4. 4 billion Chicagoland (IL, IN) $2. 3 billion Connecticut (Indian) $2. 0 billion Detroit $1. 1 billion Tunica, MS $1.
1 billion Reno/Sparks, NV $916. 8 million Biloxi, MS $878. 8 million Southeast Indiana $841. 7 million Shreveport, LA $823.
5 million St. Louis (MO, IL) $804. 7 million Boulder Strip (NV) $665. 6 million Las Vegas -- Downtown $656. 7 million Kansas City, MO $637. 6 million New Orleans $556.
0 million Laughlin, NV $550. 9 million Black Hawk, CO $479. 8 million Lake Charles, LA $441. 7 million Council Bluffs, IA $383. 8 million South Shore Lake Tahoe, NV $336. 4 million Delaware Park $268.
2 million Vicksburg, MS $249. 7 million Mountaineer, WV $224. 7 million Charlestown, WV $221. 0 million North Las Vegas $202. 1 million Quad Cities (IA, IL) $201.
6 million Gulfport, MS $200. 5 million Dover Downs, DE $186. 9 million Baton Rouge, LA $179. 7 million Wheeling, WV $149. 1 million Des Moines, IA $149. 1 million Peoria, IL $145.
9 million Cripple Creek, CO $142. 4 million Metropolis, IL $138. 8 million Dubuque/Marquette, IA $127. 3 million Harrington, DE $110. 8 million Evansville, IN $105. 5 million Source: The Innovation Group (October 2003) Reference sAGA Facts Sheet.
(2004) American Gaming Association [Online]. Available: web Corporate Information. (2004) Caesars Entertainment Inc. [Online]. Available: web D.
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