Bleeding Every Penny Out Of Las Vegas Strip Tourists Might Not Be A Winning Long-Term Strategy

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And then there were three; three zeroes that is at select roulette tables inside Las Vegas Strip casinos Planet Hollywood and New York-New York.

The new aforementioned casinos are not the first to field test Triple Zero Roulette. The Sheldon Adelson owned Venetian earned that dubious honor in October 2016, when it stealthy hid its third zero behind a Sands icon, even going so far as to call the game Sands Roulette.

We could personally think of a couple of other “S” words to call that game.

At least PH was more brazen in its approach, adding a large “000” spot to the felt that all but screams to gamblers that their cash is about to be separated from their wallet.

The proliferation of Triple Zero Roulette is just the latest in an ongoing trend among Las Vegas Strip casinos to squeeze every penny they can out of tourists who they perceive as either oblivious or who don’t care about the house edge. Let’s call them “fun players.”

But is this the right approach to increasing revenue? Or will the need to appease bean counters and shareholders in the short-term result in a violent backlash?

The Las Vegas Strip is a different animal

It’s fairly apparent why Las Vegas Strip casinos were among the first to spread table games with less than favorable rules, like 6:5 Blackjack and now Triple Zero Roulette.

Put simply, the Strip is completely different than any other gambling destination in the United States. In fact, it may even be inaccurate to call Vegas a “gambling destination” at all, as it’s evolved more into a sensory experience dominated by exclusive eateries, lavish nightclubs, and an assortment of awe-inspiring spectacles.

Last year, rooms and food/beverage accounted for 57.6% of Nevada resort revenue versus just 42.6% for gaming revenue. Even putting aside the ridiculous resort fees and newly implemented parking charges, that ratio is extraordinary, and we’re fairly confident that no other casino state boasts anything even close.

Today’s Strip is designed for care- and money-free tourists looking for a Las Vegas experience, not necessarily vacationers who research return-to-players on their flight (make them drive 30 minutes to Red Rock).

As such, it’s become a fertile testing ground for games reviled not just by advantage gamblers, but also enthused recreational gamblers with at least a basic understanding of house edges.

The table gaming phenomenon

In the past six months Strip casinos have made even more revenue off table games than slots. Again, this is virtually unheard of in any other US gambling market, where slots tend to dominate.

From September 2017 through February 2018, Las Vegas Strip table game win was $1.69 billion versus $1.62 billion for slots, accounting for 51% of total win. Compare this to destinations like touristy Atlantic City, where the table game heavy Borgata still generates 63.7% of gaming revenue from slots. Or how about Pennsylvania, where in 2017 table gaming revenue only accounted for 27.6% of land-based gaming revenue, despite operators pushing Stadium Gaming and other table games on their patrons.

One last comparison: online casinos in New Jersey make roughly 75-80% of their revenue off slots, even though slots return somewhere in the vicinity of 96% to players — extraordinarily high by casino standards.

The reason why Strip tourists favor table games is again, fairly apparent. Tourists to Sin City are more apt to travel in packs and thus, participate in communal activities. Grinding out slots and video poker in isolation doesn’t exactly appeal to a raucous group of twenty-somethings. But super casual-friendly games like craps and roulette, now these are games that allow the herds to unleash their inner beast.

And the prevailing attitude among bean counters is that these players don’t give a damn about the house edge, so why not keep increasing it?

The problem with pushing the envelope too far

To some, including poker professional and #morerakeisbetter poster child Daniel Negreanu, adding a third zero to a select few roulette wheels isn’t perceived as a big deal:

Negreanu does make a fair point. Strip players in particular are probably less likely to care about the presence of a third zero than most gamblers, and even if they do notice it, they might not understand its significance. But it’s exceedingly short sighted to suggest that the addition of a fourth, fifth, or thirty-sixth zero would go just as unnoticed as zero number three.

More importantly, each new cash grab by casino operators is going to be felt by players on some level.

Envision a scenario where a player, let’s call him Adam Loeb Bigs, plunks down $200 bucks on a double zero roulette table, and bets in $50 increments. On balance, it will take 58 spins of the roulette wheel before Bigs doesn’t have enough money left to make his $50 bet. Assuming one spin per minute, that’s almost an hour of play. Not bad for a game with a low bar of entry.

Now, our unsuspecting gambler takes that same $200 to the Triple Zero Roulette wheel at Planet Hollywood. Bigs will now go see his bankroll whittled away to under $50 after just 39 spins, or roughly 40 minutes.

Casinos appear to believe that as long as players are having fun, they can spring whatever trap they want. But what exactly is so fun about going broke in two-thirds the time as you did on your last trip, we wonder. And say casinos adapt Negreanu’s attitude towards tourists, and add a 0000 and a 00000. Now our friend Bigs only gets 25 minutes of play before going broke. How apt is he to play roulette on his next jaunt to Las Vegas? 80%, 50%?

And yes, there is something to be said about Triple Zero Roulette tables sporting a lower minimum wager than their single- and double-zero counterparts, but remember, it was only a matter of time before 6:5 blackjack spread to the $25 tables.

More house edge isn’t better

Point is, there exists a critical juncture where even uninformed gamblers will gravitate away from the tables, fearing yet another short-lived pummeling. Given recent gaming table gaming revenue trends in Nevada, we haven’t reached that point yet, but it looms.

We say that because there already is a pretty severe backlash brewing among Strip-goers. And because we live in an informational age, more people are learning what constitutes a good game, a bad game, and a game akin to shooting hoops for stuffed animals on the Seaside Heights boardwalk.

Problem is by the time casinos realize their mistake, the bad taste will already be embedded into the tastes buds of their primary demographic — those in search of a memorable Las Vegas experience. Spread enough ill-will and roulette revenue will melt in the desert heat.

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Robert is a veteran writer and analyst for the gambling industry, with a particular focus on the emergent US online gambling market. An avid poker and gambling enthusiast, Robert offers unique perspectives from both the vantage point of the player and industry professional, and is fit to cover a broad spectrum of topics.

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