By Damian Martinez, journalist at G&M News.
During the ten-year period that you worked on companies from the gaming industry like Harvey’s Resort Hotel Casino, Harrah’s, the MGM Grand, and the Palace Station Hotel Casino, what were the main professional and personal lessons that you learned?
Like many corporations, gaming companies can be somewhat risk averse. This is natural for a large organization that has experienced considerable success. One artifact of this condition is that any substantial change initiative will be a slow-moving process. It took me several years to accept and understand this reality. For new ideas that challenge the inveterate wisdom of the industry, there are considerable hurdles to overcome, for example, cognitive dissonance and fear of loss. I am someone who is given to the pursuit of scientific approaches like experimentation and randomized controlled trials, so my time in the industry was a difficult journey for me. I guess this is the bane of all those with the “discovery” gene. I wanted to run fast, and that just does not happen in most large organizations. Ultimately, I realized that academia was a better fit for me, but I still very much wanted to help the industry that I loved. I learned so much from my tenure in gaming, and I will always appreciate those who helped me obtain that knowledge. In closing, it seems as though things are a little better now with respect to the industry’s willingness to accept new ideas and conduct experiments. This is especially true in markets such as Mexico and Australia. My hope is that this trend continues.
As a professor at the University of Nevada, Las Vegas, what advice do you give to your students who want to pursue a career in the gaming industry?
Do it! It is a fascinating opportunity to participate in an innovative and dynamic industry that offers exposure to many different forms of business under one roof. If you think about it, it is difficult to name another industry that is as successful as gaming, with as much room to improve and grow. The latter is important for students, as job satisfaction is closely tied to opportunities to make positive improvements.
What marketing strategies can operators implement to make their casino floors more efficient?
Be careful with rebates on losses, as the face value of these discounts rarely represents their true cost. Rebates are not inherently bad but structuring them properly is very tricky. Better measurement of free-play campaigns, match-play offers, and drawing-based promotions would be most helpful. These tactics are also not inherently flawed, but the lack of appropriate measurement can conceal their failure to achieve their stated objectives. Optimizing slot revenues could be greatly assisted by way performance-potential modeling. In essence, this process considers the game and location characteristics in estimating each game’s potential. It then compares the game’s actual performance against its potential. It’s a great way to understand how to optimize the layout and design of a slot floor, while also providing valuable insight into which kinds of games to install on the floor, and which ones to avoid. Moreover, all of this business intelligence is derived from the preferences of each casino’s specific clientele. Positioning slot floors by way of volatility, rather than just house advantage. Improving our understanding on how the house advantage affects individual player experiences is something that would help to improve the profitability of slot floors. On this issue, there is a considerable amount of misunderstanding among operators. On a positive note, this is something that I believe is slowly changing for the better.
What are the most common false myths that exist around land-based casinos?
I cannot say these are the most common myths, but here are a few to think about. The usefulness of the outcome tracking signs on baccarat and roulette games. The frequency of outcomes is random, or at least it should be. These signs prey on the belief that short-term outcomes that differ from long-term probabilities must immediately be corrected to resemble the long-term probabilities. This is just not true. The hit/stand actions (right or wrong) of a blackjack player on third base do not affect the overall disadvantage of the other players on the game. I have seen folks come to blows over this one. A slot or video poker game that has recently paid a top-award jackpot should be avoided by players, because it will be less likely hit again (in the near term). This is not true, as this is an issue of sampling with replacement. Under this condition, the top-award has an equal chance of hitting on each spin, regardless of prior outcomes. Casinos can control/manipulate the occurrence of jackpots on slot machines. This is simply not true.
What are the main changes that you have seen in the last 15 years in casino floors?
In Las Vegas, most casinos have fewer machines on the slot floor. This results in less crowded configurations that feature more comfortable and approachable gaming positions. This strategy is consistent with the fundamentals of environmental psychology. Of course, the optimal number of games on a floor can vary according to specific market and demand conditions. In the United States, I would say the rise and evolution of the penny reel. These line games have come to dominate many slot floors. Of course, the footprint of multiple-denomination games also grew over this period.