The domestic casino gaming experience used to be a rare one that Americans could only enjoy in Las Vegas, Reno, Nevada and Atlantic City, New Jersey. However, in the last two decades over a dozen small and middle markets have joined this one-time exclusive club, allowing the majority of Americans to enjoy a complete casino gaming experience within their home region.
“Gaming was introduced to Atlantic City for the specific purpose of improving the city and bolstering a flagging tourism industry during the 1970s,” says Jeffrey Vasser, president of the Atlantic City Convention & Visitors Authority. “For about 30 years, we had a monopoly on gaming on the East Coast and made Atlantic City a highly popular destination. Since there is no longer a monopoly on gaming, the levels of dining, entertainment, spas, shopping and other amenities have grown and are now the focus of the tourism industry. The days of relying solely on gaming are past.”
Doing AC
Atlantic City’s new “Do AC” marketing campaign does not mention gaming at all, but gaming put Atlantic City back on the map in the last decade after a rough decade in the 1990s. The positive influence of gaming has also made Atlantic City a more robust destination for conventions.
2012 has already has been a strong year at the Atlantic City Convention Center, with several new conventions and events, including the recent Fantasy Football Fest in August. Fantasy Football Fest is produced by Reed POP, a company that was hesitant to come to Atlantic City until recently but now has faith in the market.
“Casino gaming has made Atlantic City a more robust destination for conventions,” says Vasser. “Meeting and convention delegates enjoy coming here, and often return later with their families.”
When tourists come back with their families, they come back to enjoy a lot of the non-gaming activities highlighted in the “Do AC” marketing campaign. This year the Tourism District debuted in Atlantic City, and more attractions are being added, like “Duality,” a three-dimensional light show projected several times each night on the Boardwalk Hall façade.
“The Boardwalk, beach and other natural attractions that the city was built for originally are still strong draws,” says Vasser. “Entertainment is a great draw, and Boardwalk Hall consistently ranks as one of the top-grossing arenas of its size in the world. The casinos also host a huge variety of the top names in entertainment throughout the year, and many of the food franchises rank at the top of their chains.”
Like its big brother to the west, Las Vegas, Atlantic City has become a great “foodie” destination, with restaurants from celebrity chefs and others.
“We are concentrating on building the non-gaming aspects, similar to the Las Vegas model where revenue from gaming and revenue from non-gaming are basically even,” says Vasser. “What is most gratifying to see is that Atlantic City is no longer just a summer destination; it is now a full-service, year-round resort.”
Renovating Reno
Reno, Nevada’s history as an international casino gaming destination goes even further back than Las Vegas. The first half of the 20th century saw Reno establish itself as the country’s leading gambling haven. The job of Chris Baum, new president and CEO of the Reno-Sparks Convention & Visitors Authority, is to embrace the history of the “Biggest Little City in the World,” while treading a new path for tourists in the 21st century.
“The traditional mold for casino operators was for their guests to stay onsite 24 hours, but casino operators have realized they benefit if guests are allowed to enjoy destinations beyond the casino,” says Baum. “When I came on board I talked to all internal and external stakeholders, and we agreed that we have to position ourselves as a four-season destination resort. We see our competing markets as Phoenix, Scottsdale, Arizona and Tucson, Arizona.”
Baum sees those markets as competitors because the Reno-Lake Tahoe area is home to over 50 golf courses and a variety of outdoors sports, including skiing, snowboarding, kayaking and motorbikes.
“Casino gaming is still a big part our DNA, and an important part of revenue,” says Baum. “Gaming is fun, but many visitors do not want to spend three days straight in a casino, and our casino operators get that.”
The high-desert backdrop may be similar to their competitors in other markets, but Reno differentiates itself by offering Nevada’s state art museum, a children’s museum, an extensive automobile collection and the Truckee River that runs through downtown. The ability to offer a variety of activities allows the Reno-Lake Tahoe area to market to a wider variety of consumers than major gaming domestic and international destinations like Las Vegas and Dubai.
“Las Vegas has gone to one extreme, which works perfectly for them,” says Baum. “We are more focused to middle America at a lower price point, which works perfectly for us.
Outfoxing the Competition
Perhaps the sole model for middle-market success over the last two decades in the casino gaming industry has been Foxwoods Resort Casino and the Mashantucket Pequot Tribal Nation in Connecticut. As the largest casino in North America, Foxwoods employs over 8,600 people and is the driving force in the local economy. It has transformed a sleepy, rustic part of Connecticut into one of the country’s premier tourism destinations.
“For the last 20 years, Foxwoods has brought in millions of patrons, completely changing the landscape of this area,” says Rebecca Carr, chief marketing officer at Foxwoods Resort Casino. “Numerous new businesses, hotels and restaurants have popped up to serve the tourists in this area.”
As gaming draws in the millions, tourists learn about the area’s major historic and cultural attraction, the Mashantucket Pequot Museum and Research Center, the largest of its kind in the country. Non-gaming interests continue to make the Foxwoods experience more dynamic and key for the region’s economic interests.
“We collaborate with a broad range of businesses and co-develop programs to drive tourists to this beautiful part of Connecticut,” says Carr. “We enjoy strong partnerships with other local tourism attractions such as the Mystic Aquarium, Mystic Seaport and Connecticut Science Center. Foxwoods Rewards patrons have the opportunity to take advantage of these discounts and other local attractions.”
Foxwoods also utilizes the draw of regional historical landmarks to add to its consumer base. Fort Griswold, Fort Trumbull and the Essex Steam Train are all popular attractions that help ensure that Foxwoods Resort Casino will remain not only a regional leader in casino gaming, but on the forefront of setting national trends for the entire industry to follow.
“Foxwoods visitors are constantly seeking new and interesting experiences, and our local tourist attractions uniquely complement each other in providing exciting, remarkable trips,” says Carr. “Our natural resources, including beautiful beaches plus the variety in entertainment, dining and shopping, all combine to make Connecticut the most diverse and intriguing vacation destination in the Northeast region.”
Southern Hospitality
In the 1980s, riverboat gambling initially allowed small and middle markets to enjoy the economic benefits of casino gaming, transforming stereotypical rural images to regional hotspots that have also become a favorite live event destination for promoters of sports and entertainment.
“The casino industry has taken us above and beyond,” says Beth Carriere, executive director of the Mississippi Gulf Coast Convention & Visitors Bureau. “It has been an excellent provider of jobs, taxes and a wonderful addition to our tourism destination mix. The current trend of investors includes the largest of the gaming businesses in the world, and our destination is certainly on its way to a premiere status on many levels.”
During the same two-decade span that saw Foxwoods Resort Casino’s spectacular rise, the “Mississippi Gulf Coast Miracle” that started as small riverboat gambling has transformed to large, land-based resorts. A laundry list of local industries and sectors have benefitted from the “miracle,” including architects, banks, farmers, cleaning and food services, construction, printing companies and retail establishments.
Although there is a heavy reliance on casino gaming in the industry, Lady Luck had little to do with the current success that the region is experiencing. According to Carr, the leaders of the state of Mississippi and local levels of officials performed the necessary due diligence of research, and adopted a free-market attitude and laws to ensure the development opportunities had the highest chance of success.
“It is not an automatic money-maker or miracle for all markets; we were a good match from the beginning,” says Carriere. “The total experience of a full destination on the Gulf of Mexico is what makes the Mississippi Gulf Coast casino industry special. Casinos are plentiful across this nation now, so the rich, cultural cuisine and the natural friendliness of the people in this region add those special ingredients needed to prosper and grow.”
Show Me Success
The casino gaming industry has transformed the eastern, western and southern portions of the state of Missouri into regional hotspots for tourists. Every year, 24 million people visit Missouri casinos, which have expanded to include two new St. Louis-area casinos, as well as a Kansas City, Kansas and Cape Girardeau, Missouri casinos, all built in the last decade.
The 2008 passage of no-limit wagering in Missouri helped; the buy-in limit in Missouri benefited casinos in the bordering states of Kansas and Illinois.
“The average guest spends a little more than two hours per visit at the casino, which leaves plenty of time for other activities such as shopping, dining, golf or other sporting events,” says Troy Stremming, senior vice president of government relations and public affairs for Ameristar Casinos and president and chairman of the Kansas City Convention & Visitors Association. “Since guests come from several hundred miles away to play, this leaves ample time to explore other areas of the city such as Royals baseball, Worlds of Fun amusement park, the home of President Harry Truman, the Negro Baseball League museum and the Power and Light District.”
Many guests are surprised by the high level of luxury offered at Missouri casinos, which serves as a positive introduction to the tourism experience. The ability to integrate the casino gaming experience into regularly scheduled sports and leisure activities by consumers has been a large part of the growing popularity of the region. A recent rebranding of the Kansas City Convention & Visitors Association reflects this experience.
“Operating in communities that work hard to support all forms of tourism is vital to our success,” says Stremming. “Guests who initially stay at casinos just for the gaming, or in response to a coupon offer, tell us they leave the property during their stays to enjoy the attractions and entertainment that Kansas City and St. Louis have to offer. We hire compassionate, caring and dedicated team members, from right here in Missouri, who have made serving others their passion.”
Dynamic in the Desert
The desert Southwest is home to a recent wave of casinos that have added a needed boost to the region’s economy. Casinos across southern California, Arizona and New Mexico are serving as enticing alternatives to Las Vegas, while keeping the discretionary income of their states’ citizens at home.
“It is imperative that you give guests a truly memorable environment and quality experience,” says Mark Scheller, spokesman for Casino del Sol in Tucson, Arizona. “I believe our variety of gaming supports a destination for local, rural and regional residents to retreat to an affordable environment. Guests can relax and enjoy the excitement of Las Vegas-level entertainment without the hassles and costs attributed to it.”
As a market, Tucson has followed the successful model of incorporating regional attractions into its gaming experience. Popular attractions like Old Tucson, the Pima Air Museum and Desert Museum add to the length of stay for the average tourist.
Like Atlantic City and Kansas City, the increased popularity of the casino gaming industry has led to an increased demand in Tucson for meetings and conventions from regional and national groups. However, simple traditional rules still are fundamental to the success of this growing market.
“Entertainment venues and cutting-edge enhancements are all important, but at the same time you have to be very good at knowing your player, your guest and your market,” says Scheller. “It is all about community and quality. We want to be extremely visible and never let a guest or player down in the experience that we promise.”
A State of Benefit
Consistent high revenues from casinos have been one of the few economic revenue sources that states have been enjoying since the onset of the recession nearly five years ago. Many of these states face additional budget and municipal economic woes that would be seriously inflated without the gaming revenue.
The Missouri casino industry employs 10,500 people and pays more than $340 million a year in salaries.
“The taxes alone make a significant impact in Missouri,” says Stremming.
Almost $380 million in direct gaming taxes go directly to support state and regional governments, along with $108 million in admission fees and $51.7 million in real estate and sales taxes. Casinos have made $3.5 billion of capital investments since 1998, including construction labor and materials.
“It takes a tremendous amount of vendor support for casinos to deliver the service and amenities our guests expect,” says Stremming.
Foxwoods purchases hundreds of millions of dollars in goods and services supporting a myriad of businesses operating in the state of Connecticut.
“As one of the largest tax contributors in the state of Connecticut, the value we bring to all citizens and tourists is immeasurable,” says Carr. “Over the last 20 years, Foxwoods and the Mashantucket Pequot Tribal Nation have donated millions of dollars to hundreds of nonprofit organizations. Gaming and tourism are both important fixtures in an overall state economy where every industry is critical to the well-being of our residents.”
Revenue from gaming and its related tourism can single-handedly transform state budgets. Just ask the state of Mississippi. Not surprisingly, states with minimal debt and balanced budgets feel the greatest impact from their casino gaming revenues. Municipalities, counties and the state government are the beneficiaries, including their vendors, the school systems, fire and police departments and residents, who enjoy the enhanced quality of life from infrastructure improvements.
“Casino taxes, jobs created, facilities constructed and additional advertising from the casino industry has transformed the product and budgets of the entire state of Mississippi,” says Carriere. “The Mississippi Gulf Coast product continues to provide the lion’s share.”
In 2011, Ameristar and its team members contributed $6.8 million in the communities where it operates. The team members volunteered thousands of hours for charities—painting, planting flowers, cleaning up neighborhoods, organizing fundraising events, servicing meals and many other meaningful endeavors.
Today, commercial casinos including land-based, riverboat and racetrack casinos operate in 22 states, according to Stremming. The American Gaming Association states that nationwide, commercial and racetrack casinos employ about 350,000 employees, and paid $7.2 billion in gaming tax revenue and distributions to state and local governments in 2009.
“In Missouri, casinos are the highest-taxed industry, and they contribute more revenue to the state than all the approximately 60,000 corporations operating in the state,” says Stremming. “Casino taxes rank as the fifth-largest source of revenue in the state.”
A Winning Hand
The list of states that want to benefit from casino gaming revenue only will continue to expand. It has transformed the Northeast, the Sun Belt and America’s plains states and gulf regions into a national circuit of casino gaming and entertainment.
Simultaneously, local and state governments are converting slightly used land into multimillion-dollar revenue streams to a welcoming general public.
“The very lifeblood of the casino is our local community,” says Scheller. “We have a vested interest in helping to ensure the local environment continues to thrive. The development of the casino/resort underlined a defining moment for our community.
“There is a sense of pride about what we offer,” he says. “Our success allows us to give back more all the time. We are touching organizations that otherwise may struggle.
