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Back to the Pit?

New jurisdictions, new games and new players place the table game sector at a crossroads

Back to the Pit?

“Resurgence” is a word that’s thrown around a lot in our business, sometimes recklessly. Some feel that’s exactly what’s happening in the table game sector of the industry. For others, the “resurgence” in table games can be pinpointed to new jurisdictions discovering freshly legalized blackjack and craps.

For operators and suppliers alike, though, something is happening in the pit. If table revenues are not up everywhere, there at least is a universally recognized opportunity to grow revenues, if the right emerging market segments are tapped.

For the most part, those segments are dominated by younger players and the always-reliable Asian customer. However, there also is a concerted effort among suppliers and many operators to add table game offerings that appeal to a broad spectrum of customers. Combined with the new jurisdictions, this has contributed to an attitude toward the pit that gives hope that the decades-old dominance of the slot machine on the casino floor could at least be starting to wane.

While significant table game revenue jumps have not yet happened for local-casino giant Station Casinos in Las Vegas, one of the operator’s table game executives says it may only be a matter of time. “Table games are making a comeback,” says Bart Pestrichello, vice president of casino operations at Station’s Red Rock Resort. “The challenge has been that the comeback has been overshadowed by a weak economy and an increase in supply.”

Melissa Price, vice president of gaming for Harrah’s Entertainment, says the world’s largest casino operator also has seen growth in table games—particularly poker. “Harrah’s continues to see growth in both live poker and poker-derivative table games,” Price says. “Our 41st annual World Series of Poker tournament just finished at the Rio in Las Vegas, and each year this tournament is bigger and more spectacular.”

One thing is certain: The table game death watch appears to be over, and the pit has come through in remarkable health. Ten years ago, idle dealers and surging slot play meant typical removal of tables to make more room for the electronic money-makers. As the pit sunk to 30 percent of gaming revenue or less in some markets, tables came to be viewed by many as an archaic offering better suited to a rapidly disappearing World War II-era customer than to anything resembling a game for the future.

That attitude has disappeared, as many younger players—drawn in first by the poker craze, and later by films such as 21 and by a variety of new specialty poker games—have shown a preference for the social interaction of the pit over the comparative solitude of slot play. More recently, new interest has been generated by a variety of side bets and slot-like progressive jackpots appearing on table games.

Youth Is Served
Price at Harrah’s says the poker growth definitely “has much to do with the younger demographic; poker is appealing to many,  but particularly to the 21-30-year-old age group.”

Pestrichello, as well, credits the overall health of the pit partially to the appeal of poker and poker-related specialty games like pai gow poker and Three Card Poker to a younger audience. “Having spent four years at the Hard Rock in Las Vegas before returning to Station Casinos, I learned that the younger demographic is definitely one of the reasons table games are making a mild comeback,” he says. “My experience has been that the younger demographic plays table games to have more interaction with other players, as men and women are interested in being social at the gaming tables to meet one another.”

This view has not been prevalent across the industry. Peter Klugsberger, executive director of table games at Ontario’s Great Blue Heron Casino, says that at least in his market, the youth factor is “more hype than reality.” “I cannot see that a younger demographic is replacing the droves of hard-core table game players who are slowly retiring from being our customers,” he says.

Dean Macomber, president of the industry consulting group Macomber International and a veteran of several top-level executive posts in casino operations, adds that those under age 30 and particularly under 25 have a “total gaming spend that is quite a bit less than the other demographic strata above them,” and a presence more felt in the clubs and hot bars than on the casino floor.

Still, while younger customers may not be “replacing” older table game players, many feel that 30-and-under players are definitely augmenting that tried-and-true baby-boomer group at the tables, and that many of the new table games and new side-bet versions of traditional games are drawing those players in, creating a profitable new market segment.  

“A younger demographic is definitely helpful for any resurgence of table games,” comments Roger Snow, executive vice president of table game supplier Shuffle Master, Inc. “From what I have seen, younger players like the aggressive betting action that is provided by table games and poker. Plus, younger players seem a bit more willing to try something new, like a table game on field trial.”

“Younger players who grew up in the personal computer age love the interaction with others on the table games, compared to the ‘man vs. machine, push the button and watch the video screen’ aspect of slot machines,” adds Robert Saucier, CEO of Galaxy Gaming, a company that produces progressive jackpot systems for table games and traditional games with new types of side bets. Saucier notes that the Hard Rock in Las Vegas—a casino designed for a young customer—tripled the number of table games on its casino floor during its first decade of operations. At Hard Rock, he says, “I personally witnessed table games filled to capacity while rows of slot machines remained vacant, even on the weekends.”

Even those who disagree with the concept that younger players like social interaction on table games concede that younger players have made their presence known.

“The younger generation grew up with an Xbox or PlayStation controller in their hand,” comments Earle Hall, president and CEO of DEQ Systems, Inc., a Canadian company that provides several side-bet systems for table games. “The ‘social interaction’ is very solitary when you’re a video game player. It is an artificial environment, or it is online against people you don’t know. When you sit down at blackjack or poker, the only social interaction consists of pointed comments between players. Not a lot of people are there for a friendly, beer-drinking event; they’re there to make money.”

Hall says it is this factor of table games, not the social factor, that has brought young players to the pit. “A lot of 25-year-olds are figuring out they can make extra cash on weekends playing poker,” he says. “Those same guys have been reading all the math books on 21, and these guys are actually outstanding players.”

Youth movement or not, expanding options for table game play, along with new jurisdictions, has been keeping both table game suppliers and casino managers busier than they ever were a decade ago.

Saucier says casino operators are beginning to realize that the pit is essential to the casino atmosphere. “Table games add life to the gaming floor,” he says, “and without them included in the mix, the ‘something is missing’ syndrome occurs. In my opinion, that is why we are seeing more jurisdictions adding table games. Without them, gaming establishments are often thought of merely as slot joints.”

New Games, New Business
In addition to new jurisdictions such as Florida, Pennsylvania, Delaware and West Virginia adding table games to formerly slot-only casinos, there is ample evidence that table game business is either healthy or growing in many established jurisdictions.

“The growth in poker is spurred more by people’s access to poker on the internet, and their interest in the strategies and social interactions of the game, than by expanded gaming in markets like Pennsylvania or Delaware,” says Price of Harrah’s.

“I think the table game resurgence began a few years ago, and if anything, it is accelerating,” says Shuffle Master’s Snow. “And this is the case in established markets as well as the new ones. Look at Macau and Singapore—they are two of the most lucrative casino markets in the world, and they subsist almost entirely on table-games revenue. In the U.S., Pennsylvania and Delaware just switched from slots-only casinos to full Las Vegas-style gambling. I think this all serves as evidence of the resurgence of table games.”

Snow adds that new jurisdictions have only been part of the story in the increased business. “Don’t get me wrong: Pennsylvania and Delaware were big scores for us,” he says, “and from the rumblings we hear from Massachusetts and other states, the stars may align once again. But from what I have seen in the established markets, table games are increasing in popularity.”

Officials of TCS John Huxley, one of the world’s leading table game suppliers, also say business has been brisk. “For the last three years, we have experienced growth year-on-year in volume of tables manufactured for all our trading areas,” says Roger Hawkins, Huxley’s CEO for the Americas. “With new states opening up in the U.S., we have seen significant growth, along with replacement tables into existing properties. Many of these include incremental tables to meet increasing player demand.”

One aspect of the business that has brought in new players and increased revenue for casinos is an increasing number of specialty games, side bets and slot-style progressives being added to traditional table games. Shuffle Master was a pioneer in this area with games like Three Card Poker, Four Card Poker, Let It Ride and Caribbean Stud, the latter of which the company purchased from the former Progressive Gaming International.

According to Snow, business for these games has never been better. “Through our first two fiscal quarters, we are on pace to set the single-year install record for proprietary table games,” he says. “Even if Singapore hadn’t opened, we would still have been on pace to do it. The big needle-movers for us this year have been progressive upgrades to games like Three Card Poker and Fortune Pai Gow, as well as premium games like Ultimate Texas Hold’em, Blackjack Switch and Mississippi Stud.”

According to Hawkins, who says TCS John Huxley is marketing several new table game enhancements—such as its new Double Action Roulette, which delivers two winning numbers on a single spin—one key to the success of new table enhancements is that they make the games more interactive.

“The introduction of new table games is being driven by the new, younger demographic visiting casinos, which is more technologically astute,” Hawkins says. “These new players, who are familiar with everyday devices such as the web, iPhones and video consoles, migrate much easier to new products, and demand something more interactive.”

Macomber agrees. “Any number of progressives, side-betting, and new games have been introduced on the table game side of our business,” he says. “The side bets extract more money from existing players while, perhaps, the new games might be attracting new players.”

There certainly is no shortage of ideas on the supplier side to support the need for new experiences at the tables. For instance, last month, Galaxy Gaming launched the Inter-Casino Jackpot Network, a wide-area progressive system designed to link tables at multiple sites to a single jackpot, triggered by a hand on one of the tables. “We combine the power of table games from multiple casinos into a common jackpot network, capable of producing and sustaining even larger, life-altering jackpots,” says Saucier.

Galaxy also has had much success with its Bonus Jackpot System, a flexible link that operators can use to link tables within one casino; and has been introducing a steady stream of new games, including Deuces Wild and Triple Attack Blackjack, versions of poker and blackjack that offer additional betting and side-bet opportunities. Later this year, the company will launch Kokomo Stud, another specialty poker game.

“What we have done is to give the player aggressive betting structures on the primary wager, and various proposition bets that range from high hit frequency/lower odds, with a low house edge; to low hit frequency/higher odds with a high house edge,” Saucier says. “This is an obvious trend, and I believe we are now at the genesis of a whole new breed of table games that will be based on this formula.

“We also determined the importance of having a low house edge on the primary game, with the ability to make it up with additional, higher-edge proposition wagers.”

Galaxy also is known for side bets like Lucky Ladies, which pays if the player’s dealt blackjack hand is a 20, from 4-1 for any 20 to 125-1 for matching Queens of Hearts in a multi-deck shoe—the “Lucky Ladies.”

DEQ also has several side-bet products, the latest being EZ Baccarat, a side bet that replaces the paying of commission on the banker’s hand. Called the Dragon 7 wager, it pays 40-1 on banker bets if the banker’s hand totals seven. Hall says it’s been successful at speeding up the play of baccarat and, thus, increasing the game’s earnings.

Part of the success of EZ Baccarat, Hall says, parallels an important factor in the burgeoning table game business—the cultural factor. He says casinos and suppliers are catering more to Asian players, and that is reflected in the new products. “I never thought I would ever, in my career, see a casino take a blackjack table off the floor and replace it with a baccarat table,” he says, “but I’ve seen that in Southern California, and in Atlantic City. So, there is a resurgence in tables that is culture-based, and the makeup of table games on the floor is shifting to reflect that demographic shift.”

Maximized Marketing
Whether promoting the pit to Asian customers or to a younger demographic, targeted marketing to the most valuable customers has been a key to success in the table game arena.

For Klugsberger at Great Blue Heron, that means identifying and catering to high-end Asian customers and to individuals who have shown their loyalty.

“Our table game business has flourished over the past few years, and I believe part of that success is to clearly understand who your paying customers are, and how to serve them better,” Klugsberger says. “We adapted our gaming mix and table setup to our most profitable segments, and reaped the rewards due to increases in frequency and betting behavior. I am a strong proponent of targeting your most valuable customers and working incredibly hard on improving their experience while they are in the casino.

“We put a lot of effort into developing training programs that focus on employee behavior that improves the customer experience. Most of our competitors cut their training expenditures as ‘non-essential;’ we felt we couldn’t afford not to do them.”

Employee training also has played a big part in the way Station Casinos, and Red Rock in particular, has catered to younger players in the pit. According to Pestrichello, dealers have been trained to mix more with the younger demographic. “With a younger player, it is very important for the dealer to have more interaction with players,” he says, “such as high-fives, knuckles, etc.”

In addition to interaction with customers, Pestrichello says marketing of the pit means making sure the games players want are available to them. “At Station Casinos, we provide more games of choice,” he says. “Blackjack is the game people come to Vegas to play; therefore, we offer more at lower limits. We strike a good balance of poker-related games, and we’ve learned that our games need to be more productive by keeping the players entertained as long as we can. This is also accomplished by providing great guest service.”

He adds that offering limits the players can afford has been important to maintaining and growing the table business. “On a Friday or Saturday night, it is OK to have slightly higher limits, but on weekdays, we make sure there are plenty of $5 and $10 games available.” Red Rock, he says, has even purchased software that aids pit supervisors in managing table limits, “assuring we are never priced too high or too low.”

Pricing strategies, targeted marketing, new games and multiplying side bets are all evidence that table games, while maybe never destined to regain the dominant position they once held on the casino floor, are alive and well—and in many places, growing.

They may not be your grandfather’s table games, but they very well could be your grandson’s.

Frank Legato is editor of Global Gaming Business magazine. He has been writing on gaming topics since 1984, when he launched and served as editor of Casino Gaming magazine. Legato, a nationally recognized expert on slot machines, has served as editor and reporter for a variety of gaming publications, including Public Gaming, IGWB, Casino Journal, Casino Player, Strictly Slots and Atlantic City Insider. He has an B.A. in journalism and an M.A. in communications from Duquesne University in Pittsburgh, PA. He is the author of the books, How To Win Millions Playing Slot Machines... Or Lose Trying, and Atlantic City: In Living Color.