During the 1950s and 1960s, the marquees that lined the Las Vegas Strip were dominated by superstar crooners and comics (Sinatra, Martin and Lewis, Judy Garland) and lounge acts (Don Rickles, Shecky Greene, Louis Prima). For a few bucks and the cost of a highball, players could hit the showroom for headliners, and later on, after losing their nut at the craps table, recover in the casino lounge.
In those days, entertainment was not a moneymaker, but almost an afterthought, designed to keep players in the house, on the gaming floor, and in a gambling mood.
Fast forward to November 31-December 1, 2012, when a boy band still in the acne-and-adenoids stage made Mohegan Sun the hottest place on the planet, and arguably stirred the kind of mania once created by the Rat Pack.
Tickets for One Direction (virtually unknown before the group appeared on Britain’s X Factor in 2010) sold out two shows in 20 minutes before crashing Ticketmaster. Then the real frenzy began. Desperate fans willingly paid double and triple the face value of tickets in the “secondary market” (online resellers like BigStub.com and Ticket Liquidator), and scalpers undoubtedly got much more. In one zany promotion, fathers in feather boas and heels participated in a “Daddy Drag Race” to get their little darlings into the show. And for two nights, 10,000 high-decibel teens and tweens crowded the resort arena to see (and maybe even hear) the young heartthrobs.
How times have changed.
“Twenty years ago you wouldn’t think One Direction would ever have had a place in the casino industry—now it’s the complete opposite,” says Tom Cantone, vice president of sports and entertainment at the Uncasville, Connecticut resort. “The weekend they were here, we were the No. 1 tweeted brand in the world, the most talked-about brand on social media—Mohegan Sun was everywhere, from Southeast Asia to Europe to South America.”
The bonanza wasn’t limited to ticket sales and brand buzz. Because most ticket-holders were adolescent girls (some from as far away as California), they were accompanied by dutiful parents. During the concert, the “drop-off crowd” had nothing to do for two or three hours but eat, drink, shop and play. “Most hotels and restaurants were jammed,” says Cantone with satisfaction. “And we had the biggest merchandising night ever.”
That phenomenal two-night stand validated Cantone’s entertainment strategy, which can be summed up in three little words: Follow pop culture.
“That’s your roadmap—follow it and you’re going to have a success rate in the casino that’s better than your competition,” says the industry veteran, who’s been credited with revolutionizing the role of entertainment as a revenue generator. “In my opinion, any property of any size can upstage anybody at any time. All they need is the right artist and the right booking at the right time—because it’s all about the timing.”
You Can’t Please Everybody… Or Can You?
Even Cantone may be surprised by the breadth of today’s casino entertainment, which includes not just headliners and lounge acts but celebrity chefs, Broadway hits, sporting events, ethnic acts, tribute bands, “diva” extravaganzas, and 1,001 variations on Cirque du Soleil. Then there’s the seemingly inexhaustible roster of reality TV stars, from the casts of Jersey Shore, Dancing with the Stars and the Real Housewives to Pawn Stars and the fishermen of The Deadliest Catch.
Think of these celebrities du jour as “the class of the year—the class of 2012, the class of 2013, the most popular kids in your class,” Cantone says. “Some are recording artists, some are TV stars, some are movie stars, but they all have one thing in common: they’re in demand right now. When you corral that energy zone into your facility, you’ve got yourself a party.”
In an increasingly competitive industry and still-challenging economy, every casino amenity and every customer has become exponentially more valuable. For that reason, Mohegan Sun continues to host its “Winning Authors” series, and though the literary meet-and-greets are free and attendance may be moderate, they bring in people who otherwise might have no reason to patronize a casino resort. (Last year’s authors included former O.J. Simpson prosecutor-turned-novelist Marcia Clark and mom-and-daughter mystery writers Mary Higgins Clark and Carol Higgins Clark.)
Casting a wide net through entertainment not only normalizes the casino experience for a broader group of patrons, but in the case of One Direction and other kiddie acts, it also sets the stage for the future.
“The next generation is in already in the house,” says Cantone. “Those young people who came to Mohegan Sun are going to know and have a comfort level with the brand.” Another advantage is the power these customers wield via their Facebook pages, Twitter accounts, smart phones and other social media outlets. “We have tens of thousands of people selling our shows,” says Cantone. “These events are now bookings on steroids, Super Bowl kinds of events that people want to be around. And when you tie into that kind of firepower, you really win the day.”
The talent also can set the Twitterverse abuzz. When comedian Conan O’Brien was forced out of the Tonight Show in January 2010, he booked one night of his concert tour at Mohegan Sun. As Cantone recalls, “We went on sale, he did one tweet, and we sold out in a minute. We never spent a nickel.”
While it may be tempting to try and skew young and hip—after all, mainstream media including TV, radio and motion pictures seem to believe the only consumer worth wooing is between ages 18 and 35—the typical casino patron in many cases may still be a “53-year-old woman who plays slots,” says Clint Billups of CFB Productions, a Las Vegas-based entertainment agency.
Presumably, says Billups, that middle-aged, middle-class woman—known in some advertising circles as “Barbara”—has a husband who plays table games, and married kids who sometimes come with them to the casino. And casino properties will disregard Barbara at their peril.
“Here in Las Vegas, three casinos in the last decade really tried to focus on the 20- to 30-year-old market,” says Billups. “Of course, when the recession hit and suddenly the 20- and 30-somethings didn’t have the disposable income they were accustomed to, all three properties—the Palms, the Cosmopolitan and the Hard Rock—ran into financial difficulties.”
The Palms has recently pulled a turnabout, Billups notes. Though the resort still courts the young adult market—through a recent spring break promotion, for example—it is not narrowcasting to younger patrons. Under President Joe Magliarditi, who took the helm during an ownership change in mid-2011, the Palms is courting locals, a demographic it overlooked before, as well as women. In 2012, the change in direction prompted the Las Vegas Sun to dub Magliarditi a “quick-change artist.”
“I get a kick out of it when I walk through the Palms now,” says Billups with a laugh. “On Thursdays, it’s Seniors Day. I never thought I’d see that.”
“It’s a mistake to think you’re gonna be young and hip 24/7,” agrees Cantone. “You’ve got to mix the recipe so the perception is you’re young and hip, but you still have enough there for the demographic that’s paying the bills.”
Loss Leader or Profit Center?
In the 1930s and 1940s, when the gaming halls of Nevada were nothing more than bars with slot machines, entertainment—if it was provided at all—usually was a piano player with a tip jar.
“The introduction of headliner entertainment came when Bugsy Siegel opened the Flamingo and wanted to get people to drive in and fly in to his casino in the desert,” says Billups. “Today it’s come down to two philosophies: The traditional approach is that entertainment drives traffic; this was Bugsy Seigel’s original idea. The other approach sees entertainment as a profit center; it should generate a profit like slots or anything else.”
But selling out the showroom isn’t good enough, he adds. “What impact does it have on hotel rooms, food and beverage, non-gaming amenities like the spa and even right down to retail? It’s one thing to sell out every seat, but if hotel occupancy isn’t up because of it, and people are eating at the food court instead of the steak house, perhaps it’s not the best choice of entertainment. It has to round the bases and serve every venue and offering in the resort.”
At MGM Resorts International, with 10 resorts on the Vegas Strip alone, the operative word is “options,” says Chris Baldizan, senior vice president of entertainment for the global company. In the 1970s, when the U.S. casino industry was limited to Nevada, entertainment was little more than an amenity— with the only game in town, it didn’t have to contribute appreciably to the bottom line. “It was, ‘Come stay at our place and gamble, and by the way, see a great show or have a nice dinner,'” says Baldizan. “Those amenities were either complimentary, or the price points were such that they were not revenue drivers.”
Today, with gaming revenue not always the biggest slice of the pie, entertainment has to pull its own weight. “Not only is it the traditional lounges and theaters, it’s arena acts and headliners, it’s dining, it’s shopping, it’s going to nightclubs, it’s going to day pools and day clubs,” says Baldizan. “That same dollar has been split so many different ways—and oh, by the way, we’re still trying to find some people who are gaming.”
The Cost of Doing Business
A key demographic in Las Vegas is the business customer, who doesn’t travel to Sin City solely to sell widgets. More than 19,000 conventions and trade shows brought approximately 5 million people to the city last year, and when day is done, those conventioneers and meeting attendees are ready to cut loose. Bundling entertainment with the convention or meeting crowd is a natural, says Baldizan.
“A property like Mandalay Bay is geared more toward convention clients, especially during the mid-week, but we’re also adding a new nightclub there and a new Cirque show (Michael Jackson: One). We try to strategically place entertainment options at each of our properties that make the most sense to the demographic going there, or those we’re trying to get there. We have an army, literally, of sales associates and sales managers who keep entertainment as a tool in their bucket—the ability to offer group discounts or buyouts for specific shows,” he says.
Last month, for example, country singer Carrie Underwood performed a public show at the Mandalay Bay Event Center on a Saturday night. The following Monday—usually a “dark” night for headliners—a convention group staying at the MGM Grand “piggybacked on that (to get) a private show,” says Baldizan. “Another example is Santana, which has a residency at the House of Blues. Many conventions will do a buyout of a show or buy a block of 200 tickets for a show.”
Billups recalls an instance in which two dozen high rollers wanted to meet legendary singer Tony Bennett, who was in concert. The casino arranged a meet-and-greet, and the gaming activity that night “covered the cost of Bennett,” Billups says. “The 10,000 people in the arena became profit. So is the value in the ticket sales or the casino, or is it in the meet-and-greet afterward?”
How much have times changed? Cantone of Mohegan Sun notes that today, many casinos do not even include the word “casino” in their brand name. “People say, ‘What business are you in?’ Well, we’re not in the gaming business. We are in the entertainment business, all of us. Whether it’s a restaurant or a club or an event or a show, we are in the entertainment industry. Gaming happens to be part of it, and it’s a very important part, but it’s not the only part.
“All we do,” he says, “is create memories.”
Billups agrees. “We see this all the time in Vegas. I ask, ‘How did you enjoy your trip? Did you win or lose?’ and they say, ‘Oh, it was great, but we were so busy we hardly had time to hit the slots or the tables.'”
Q&A with Jason Gastwirth, Caesars Entertainment
His title includes the word “entertainment” not once but twice, so Jason Gastwirth?senior vice president of entertainment for Caesars Entertainment?keeps his finger firmly on the pulse of pop culture, watching who’s hot on TV, in music, and in the virtual universe. We asked the architect of programming strategy and operations for dozens of Caesars venues nationwide to weigh in on the value of entertainment in the casino environment.
GGB: Do you have an overarching philosophy about entertainment?
JG: Given the breadth and depth of the various resorts we oversee, we really are able to be all things to all people, but we don’t go about it in a haphazard manner. Unlike our industry peers, we house a number of brands under the Caesars Entertainment umbrella, each with its own identity and appeal. The diversity of our brands allows us to book a wide variety of entertainment, and variety is really the hallmark of our booking strategy. The Las Vegas market demonstrates this best: a guest can enjoy Celine Dion in the Colosseum one night, the next evening be wowed by the magic of Penn & Teller at the Rio, and follow that up by catching Jersey Boys at Paris or Million Dollar Quartet at Harrah’s. And that’s just scratching the surface in one market. The type of entertainment you might find inside Caesars Palace Las Vegas is going to be different than the style of entertainment you’ll find at Planet Hollywood. Our entertainment offerings are appropriate to the brand and resort where they’re booked.
GGB: Can you name some offbeat acts that succeeded beyond expectations?
JG: Without a doubt, Absinthe at Caesars Palace is one of our biggest and most unexpected hits. Part Cirque-style spectacle, part raucous comedy?and everything in-between?it’s become a must-see. One of our newest headliners, American Idol winner Taylor Hicks, is runaway hit. He’s brought the roadhouse to the Vegas Strip and it couldn’t be more fun.
We’re also ramping up programming inside our 7,500-seat venue PH Live at Planet Hollywood. We’ve had big concerts there?Nicki Minaj, Linkin Park, Journey, Peter Gabriel?and we’re continuing to play with that venue and bring in bigger acts.
GGB: Lunar New Year is a big deal because the Asian customer is so important. Are your courting other ethnic groups to?
JG: Multicultural entertainment bookings are increasingly important to us. Historically, this content was scheduled around a particular holiday or time of year?Lunar New Year for Asian guests, Mexican Independence Weekend for our Latino patrons?but we’re now seeing a greater demand for these bookings all year. This February, we hosted Ricardo Arjona at PH Live and we plan to continue booking more and more multicultural entertainment.
GGB: Are there problems that come with courting Asian customers? It’s not one size fits all. Chinese is different from Japanese, which differs from Korean and so on.
JG: We rely on the expertise of our multicultural marketing departments to make booking recommendations for culturally relevant acts. For Lunar New Year, in particular, we’ll often book international artists that have large crossover appeal and a strong following throughout Asia, as opposed to an act that’s specific to a particular sub-demographic. Mando-pop star Sandy Lam, who performed inside the Colosseum this Lunar New Year, is a great example of this type of booking, or Waikan Chau, who performed there last year.
GGB: Do you bundle convention business with entertainment packages?
JG: Entertainment for meetings really runs the gamut, whether it’s hosting a show or a headliner inside convention space or providing group packages for conference attendees inside the showroom. This is a growing part of the business at Caesars, and we work closely with our convention and sales team to provide entertainment recommendations for meeting planners.
GGB: So what’s up next?
JG: Vegas is now a place for icons, rising stars, and mid-career artists alike, rather than a place to end your career. The Colosseum and Celine Dion’s residency created a paradigm shift. I think you’ll see Vegas become an even greater factor in the entertainment industry and a top consideration for an artist’s career trajectory.
GGB: At one time it might have been considered extraordinary for people to line up for a TV chef or Real Housewife. Is it a worthwhile investment for casinos to showcase these folks?
JG: If it’s of interest to our guests, we’re going to book it.