Are we paying too much in lease fees as a basic cost of operations?

G2E a prime example…new games on the floor? It was like the “Vegas Vacation” movie!!

As this years G2E ends, another great show wraps up. I gave a couple of seminars, talked of my two favorite subjects, training dealers to be more entertaining and training supervisor for the new role that is asked of them in this technology age of table games. I saw many old friends and clients brining back many memories. The best thing about G2E is that I could drive there and sleep in my own bed!

The worst thing at G2E? For me anyway was wading through the borderline ridiculous amount of new table games, side bets and other lease fee products on the show floor. I saw more products all designed with the same concept in mind for table games…how to drive up the cost of doing business in a casino department that is struggling at best in improving profitability.

I saw so many new games on the floor it was comical. While some had merit, most belong in a board game for play at your summer cabin, not on the casino floor. Remember that movie “Vegas Vacation”? The scene where Chevy Chase was playing ridiculous games in a casino like “Rock, Paper Scissors” or “Guess How Many Fingers I have behind my Back”? Well we are close to that now with the majority of this…what’s next?.”. Biting the Heads of Chickens”. The casino game!

Is this what table games have come to?

As table game managers, the cost of doing business is of utmost concern. The key to success in table games is keeping operational costs in line with the most successful operations shining in this effort. While some costs are indeed out of control, some like payroll issues spiraling upward and their control is increasingly out of our hands. Let’s face it, people and their costs are a part of our department.

With some operational costs though, their usage and implementation is being adapted as a production enhancer but sometimes the cost of the technology and inherent fees that come with this technology is placing more of an economic hardship on our operating costs. Where is the point where the costs of doing business, especially with buying or leasing technology and new products, are overcoming its net worth? In some issues, we as table games operators have reached that point.

TECHNOLOGY AND LEASE FEES:

I don’t want to sound like the anti-technology people out there in our world. Some don’t like technology period, it scares them. I like it and use it all the time. Frankly speaking though, most technology does not do anything to grow your table games area and play. Table games that can measure handle and can track players for marketing information are a great thing. Shuffle machines that can crank out more hands per hour area a great thing. But not for the majority of smaller, regional casinos (read most Indian casinos) and the cost and usage of this equipment is more costly that their worth.

For a department that is floundering in most casinos, I cannot understand that how we as casino managers are constantly piling up operating costs by the constant usage of more and more costly equipment and new games that are simply becoming too costly! If I were to become a casino manager again (not in this lifetime!), I would ask this question on any piece of equipment or new game product I contract to use:” Will this cost is offset by an increase in revenue”? I don’t mean an increase in productivity or better game protection but an increase in player participation (read Drop). If the answer is no on this, save the money and try to show a profit without the costs.

I have no knock against shuffle machines. They serve a purpose when needed, (high volume of play, big betting limits, etc). Shuffle machines will generate more hands per hour, this is fact. But if your casino has a low limit and lower average bet, if your games are not going full bore most of the time, should you be adding to the unprofitability of your department by paying a monthly fee for a machine to shuffle your cards? In some instances, it may be more cost effective to have the dealer shuffle the cards and save the money. I know what some of you are saying here. How about shuffle trackers and false shuffles? Here's a novel idea, lets have the supervisor watch the shuffle! Just like they are supposed too without the machine!

How about all the leased games we are paying for and their escalating costs? Aren’t we paying too much for most of these products that are not adding more players but simply moving an existing player off of a product and onto another? I think we are. New games, to justify their spiraling costs ($1300 and more a month for a leased poker style game!!), have to bring in new players. New additions or twists to old games for use in spicing these products up must bring in new players. If you are paying for these products without seeing growth in your department’s drop, you may be wiser to save the money here.

We in table games are at a crucial point in our existence as a part of the gaming mix. To insure growth or even just survival of our departments we must get a grip on managing our departments better. A professional look at staff management is needed desperately here. Also a managed look at the costs we are paying for leased items has to be addressed. Management of our departments has to be handled both financially and personnel wise and then a sustained plan on growing play has to be implemented.

Here is a hint for all you Table Games Managers:

Free is better than paying for something… (Yes, I mean lease fee’s here!)

Here are some ideas…

1. Shuffler Machines…

Old school style. Manual shuffles…Have the dealers shuffle the cards!! Forget the shuffle machines…save the lease fee…will it cost you potential hands per hour? Maybe on full tables at peak hours but save the lease fee here!

2. New Games with a big lease fee…

Forget about it!! If it isn’t free, don’t put it on the floor…

3. Side Bets and Gimmicks…

Forget about these also…free is great. Pay a fee that for something that will grind out your players money faster and make all good games (and seemingly decent bets) outrageously high hold games for the casino…forget about these too says the old school manual….

So here is a word of advice for some of you table games managers, look at what the successful table games operators do in regards to their operations. The successful ones use the old school methods. One of the best table games operators in existence are the Coast Casinos in Las Vegas. Next time you are in Las Vegas, stop in one of their casinos, you will see a lot of players and not a lot of lease fees…

Date Posted: 03-Feb-2008

Vic Taucer is president of Casino Creations; a Las Vegas based casino educational, training and consulting company. Casino Creations specializes in table game evaluations, customer service training, dealer training and managerial training for table games operations. A former professor of casino management for the University & Community College System of Nevada and long time casino manager at many resorts, Vic can be reached at 702-595-7800 or vic@casinocreations.com

Look for Vic Taucer’s new book, Table Game Management, available at www.casinocreations.com and at booksellers nationwide.