Casino Operators Research Articles

Development and validation of the casino service quality scale: CASERV

With intensifying competition among casino operators, consumers are demanding better services. This research conceptualizes casino service quality as a second-order, four-dimensional construct which assesses casino patrons’ perceptions of service delivery, service environment, food service, and service product. Based upon a rigorous psychometric process of scale development and validation through three studies in the casino setting, the authors propose the CASERV scale as a comprehensive instrument for measuring casino services that is reliable, valid, and distinct from other service quality measures. The paper concludes with discussion of managerial implications and future research directions.

A mathematical approach for optimizing the casino slot floor: A linear programming application

Linear programming is a tool that has been successfully applied to various problems across many different industries and businesses. However, it appears that casino operators may have overlooked this useful and proven method. At most casino properties the bulk of gaming revenues are derived from slot machines. It is therefore imperative for casino operators to effectively manage and cultivate the performance of this department. A primary task for the casino operator is planning and deciding the mix of slot machines in order to maximize performance. This paper addresses the age-old task of optimizing the casino slot floor, but it does so as a linear programming problem. The method has been applied to data supplied by a Las Vegas repeater market hotel casino. Two models were developed, and both produced results that improved the performance of the casino slot floor. The research provides casino operators with a systematic method that will help analyze and enhance their slot operations.

Exploring Seniors’ Casino Gaming Intention

To better understand seniors’ intentions in visiting casinos, this study proposed an extension of the theory of planned behavior (TPB) with casino gaming motivation. The results of this study suggest that among motivations for seniors to visit casinos, winning and enjoyment directly and positively affected behavioral intentions, and all predictable variables of TPB positively affected seniors’ casino visiting intentions. Contrary to our expectations, past casino visits did not have a moderating effect on the relationships between the major TPB variables (attitude, subjective norm, and perceived behavioral control) casino motivation and behavioral intentions. The overall study results suggest that the proposed extended model is a useful tool for explaining seniors’ casino visiting intentions. Some theoretical and practical implications for casino operations are also discussed.

Examining Casino Service Quality in the Asian Las Vegas: An Alternative Approach

The burgeoning development of integrated casinos and the rapid growth of the gaming industry in Asia have attracted much interest in understanding the success of this market. This research explores the roles of 3 casino service quality drivers—game service, service environment, and service delivery—on customer satisfaction and loyalty intention in Macau, the world gaming capital. Based on 2 empirical studies on Chinese casino players, the results reveal that both the service environment and the service delivery are significant predictors of customer satisfaction. However, despite the importance of game service in the casino operation, its relationship with customer satisfaction is insignificant. The results suggest that not every service value proposition is necessarily important to customer delight. The authors discuss implications of the findings and provide directions for future research.

Examining the indirect impact of showroom entertainment on hourly slot gaming volume: The case of a Las Vegas hotel-casino

With the advent of the destination casino resort featuring multifaceted entertainment and convention venues in the gaming industry, researchers have attempted to estimate the indirect gaming contributions of non-gaming casino amenities such as showroom entertainment and restaurants. The daily data of aggregate gaming volumes analyzed in previous gaming research, however, do not allow exploring transient gaming volumes associated with casino amenities during a much narrower range of time periods (i.e., hourly). The current investigation addressed this limitation by examining the relationship between showroom headcount and hourly slot gaming volume for the time period that fell adjacent to the show's start and end times. Based on the time-series regression analysis of daily data from a Las Vegas Strip hotel-casino, the current study found a positive and statistically significant effect of showroom headcounts on hourly slot volume at 6 p.m., 9 p.m. and 10 p.m. The estimated incremental slot revenue per paid showroom attendee, however, was financially immaterial. Considering major investments in showroom entertainment at many casinos, the current study will help casino operators evaluate the showroom's return-on-investment.

Gambling Motivation and Passion: A Comparison Study of Recreational and Pathological Gamblers

The aim of this study was to examine the structural relationship among gambling motivation, gambling passion, and behavioral intentions to gamble between recreational and pathological gamblers. Specifically, this study aimed to shed light on the different ways in which gambling motivation and affective attitude are associated with recreational and pathological gamblers. Using a purposive sampling method, 400 subjects were selected for and participated in this study during their visits to a casino. Study results echoed the notion of distinctive and separate gambling motivations and passions between recreational and pathological gamblers. Also, results identified specific areas to which casino operators or policy makers should pay special attention in developing effective marketing strategies to promote responsible gambling.

The indirect impact of casual dining on low-end gaming in destination and local casinos

The role of casino amenities is an important issue for casino operators and developers seeking to maximize gaming revenues, space utilization, and return-on-investment. The indirect impact of casual restaurant covers on low-denomination slot volume and cash table drop was investigated using daily data from two casinos. One casino primarily served local repeat customers while the other catered to a drive-in tourist business. Using estimates from time-series regression analysis, restaurant covers were significantly related to gaming volumes. The impact of dining volume on low-end slot play was especially strong in the local market casino, resulting in a substantial financial contribution.

Casino customers in Asian versus western gaming jurisdictions

PurposeMost of the growth in casino expansion for the foreseeable future will take place in Asia. Western casino operators appreciate the immense opportunities afforded by the Asian markets, but judging by their performance abroad some have not adapted in ways necessary to survive and prosper. The purpose of this paper is to expose key differences between Asian and Western gaming jurisdictions. In light of these differences, it is a serious mistake for Western casino executives to follow an ethnocentric approach when planning marketing activities and customer service initiatives for Asian customers. To rectify this situation, a framework is advanced that will assist Western operators to adapt to Asian markets.Design/methodology/approachDifferences between Asian and Western gamblers in both their game preferences and behaviours are based upon cited data sources and upon the authors' observations during flied trips to various casino jurisdictions. When appropriate, insights gleaned from a series of informal interviews conducted with senior executives in Macau as well as gaming‐related consulting conducted by the authors in both Asia and North America are shared, albeit for legal reasons the sources are confidential. The TROPICS framework presented herein was developed by the lead author and presented to senior gaming executives at the University of Nevada, Reno 2008 executive development program. The seven elements of this framework – now refined – are targeting, retention, organization, people, incentives, culture, and systems.FindingsThis paper concludes that in order to better serve Asian markets, there is an urgent need to empirically assess patron behavior and the attendant casino marketing adaptations that will be required to succeed in these markets.Practical implicationsA series of questions and issues related to each of the seven elements in the TROPICS framework are raised. The proposed framework is equally applicable to firms operating in Western countries as well as those in Asia; however, when put into practice, the outcome will be different marketing strategies adapted to each casino's market structure and macro‐environment. Regardless of context, this systematic approach to strategy formulation will ensure consistency and alignment across various elements of strategy.Originality/valueThe paper identifies the differences between Asian and Western gamblers to assist Western operators to adapt to Asian markets.

The myth of a booming town: a two-sector model of Macau economic growth

This paper builds a trade-based equilibrium, two-sector model to reveal the inefficiency of a foreign-dominated, gaming-biased, bubble growth in Macau. This fast GDP growth that has not led to much real development as measured by the effective GNP would likely have adverse impacts on the city's long-term prosperity. We employ the model to analyze why various gaming markets have adopted differing tax rates. This work provides a rigorous argument against the problematic attempts to push for low tax convergence in the Asian gaming market. To neutralize the damaging effects of foreign domination in the local economy, we offer several policy recommendations for reviving home businesses and enhancing domestic welfare in Macau. It is suggested that enforceable laws should be made to prevent the foreign firms with cross-market operations from stealing away Macau customers, that differential taxes on casino operators and income taxes on player winnings should be chosen to support Chinese-owned casinos and curb pathological gambling, and that a sovereign wealth fund should be established to stop too much of Chinese gaming money from being lost too fast and foster Macau's economic autonomy by reducing its overreliance on foreign concerns for output growth.

Cracking the Cultural Code of Gambling

International expansion by Las Vegas casino operators has so far been uneven, notably in Macao. Information on different cultures’ understandings of gambling, which is scant, could be instrumental in supporting international expansion. Instead of using the common-macro level cultural comparison survey-based method, this research uses early childhood memory elicitation to focus on how individuals in three countries were initially exposed to gambling in their own families as children. This method is used to uncover the cultural code of gambling in the United States, the People’s Republic of China, and France. The analysis indicates that each culture has its own code for gambling, a code that reveals that culture’s gambling myth. These codes should help marketers understand the underlying motivations for gambling in each culture and should assist casino operators to market more effectively.

New Developments in Casino Gaming Business: Singapore’s Approach to Responsible Gambling

Gambling is ancient leisure pursuit. In Asia, the practice of casino gaming is spreading in recent years. Now, even the idea of a casino in the sky is becoming a reality as passenger aeroplanes become fully fitted casinos. Casual, recreational gambling can become a compulsive and pathological activity. Gambling addicts live a chaotic life, using an average of 25 credit cards by the time they declare bankruptcy. Their families are disrupted, with many members developing stress-related health problems. The social problems that accompany compulsive gambling include loss of time and productivity in the workplace, theft and embezzlement. This article looks at how Singaporean legislation has introduced new measures not only to deal with the law and order aspects of casino operations but also to contain social problems by imposing corporate social responsibility on casino operators.

High stakes: Florida Seminole gaming and sovereignty

In 1979, Florida Seminoles opened the first tribally operated high-stakes bingo hall in North America. At the time, their annual budget stood at less than $2 million. By 2006, net income from gaming had surpassed $600 million. This dramatic shift from poverty to relative economic security has created tangible benefits for tribal citizens, including employment, universal health insurance, and social services. Renewed political self-governance and economic strength have reversed decades of U.S. settler-state control. At the same time, gaming has brought new dilemmas to reservation communities and triggered outside accusations that Seminoles are sacrificing their culture by embracing capitalism. In High Stakes , Jessica R. Cattelino tells the story of Seminoles’ complex efforts to maintain politically and culturally distinct values in a time of new prosperity. Cattelino presents a vivid ethnographic account of the history and consequences of Seminole gaming. Drawing on research conducted with tribal permission, she describes casino operations, chronicles the everyday life and history of the Seminole Tribe, and shares the insights of individual Seminoles. At the same time, she unravels the complex connections among cultural difference, economic power, and political rights. Through analyses of Seminole housing, museum and language programs, legal disputes, and everyday activities, she shows how Seminoles use gaming revenue to enact their sovereignty. They do so in part, she argues, through relations of interdependency with others. High Stakes compels rethinking of the conditions of indigeneity, the power of money, and the meaning of sovereignty.

Individual Change Schemas, Core Discussion Network, and Participation in Change: an Exploratory Study of Macau Casino Employees

Individuals'participation in organizational change is crucial to the success of a change initiative. We propose that such participation is based on three aspects of individual change schemas: change salience, change valence, and change inference. We further propose that the core discussion network of individuals may moderate the relationships between their change schemas and their participation in change. Using a sample of employees from a major casino operation in Macau, which suddenly faced intense competition after enjoying a 40-year monopoly, this study empirically examines how individuals' change schemas, participation in change, and core discussion network are related. The results support most of the hypotheses. Theoretical and managerial implications are discussed.

Casino Customers in Asian vs. Western Gaming Jurisdictions: Implications for Western Casino Operators

Most of the growth in casino expansion for the foreseeable future will take place in Asia. Western casino operators appreciate the immense opportunities afforded by the Asian markets, but are largely ill-equipped to deal with the adaptations needed to survive and prosper in the new and emerging Asian markets. We look at the key differences in gambler behavior between Asia and the West, and proceed to suggest a framework along which Western operators could make their adaptation decisions for Asian markets. The seven elements of this framework are targeting, retention, organization, people, incentives, culture, and systems.

Transformational change in the SA gambling and lotteries sector

Purpose: This paper examines the transformation of the South African gaming and casino sub-sector after South Africa's democratic dispensation in 1994 and the National Gambling Act (33 of 1996). These developments introduced an adapt-or-die scenario to the gambling and lotteries sector leading to a total overhaul of strategy, structure, systems, processes, technology, work, culture, behaviour and mindset. More specifically, Sun International's gaming and casino division's response to transformational change was examined by tapping into, and reflecting on, the experiences of managers involved in day-to-day casino operations. Design: The conceptual framework of the research is based on transformation as a form of change where business principles and people management are highly integrated. Subsequently, a user-friendly tool called the "See-Saw model" was developed to measure transformational progress. The model was applied in six change management workshops for casino managers and, from this framework, transformational progress was interpreted. Findings: The results highlighted the magnitude of change in the gambling and lotteries sector. It appeared that this sector has evolved in 10 year cycles up to 2000, whereas the current level of competitiveness fuels the demand for innovation and change in less than two year cycles. The second significant finding revolved around employees' perception that Sun International's gaming and casinos division has performed well in terms of value innovation variables. Implications: The study confirmed that, in successful transformation, business innovation needs to be balanced by fairness principles. Moreover, that the threat-rigidity in leader and employee mindset has become a most challenging people management puzzle to position in securing sustainable competitive advantage. Originality: The value of the research lies in the development of a user-friendly, non-threatening strategic tool called the "see-saw model" which can be used across industries to evaluate transformational progress from the employees' point of view.

ICare: Integrating Responsible Gaming Into Casino Operation

The Saskatchewan Gaming Corporation has developed a new approach to responsible gaming that will enhance industry practices. The system incorporates a comprehensive system that incorporates responsible gaming into casino floor operations and ensures that responsible gaming becomes part of overall corporate direction. The iCare system has the ability to identify and track high risk play in real time, to notify casino management of this play, and to track interventions. Combined with this ability to analyze player activity is a software system developed in partnership with iView Systems that links responsible gaming activities to other casino management systems. The final component of SGC’s iCare environment is staff training which clearly identifies how staff use both the software system and conventional sources of observation. The iCare system gives casinos the ability to collect and analyze empirical evidence related to levels of risk and risk patterns of players.

Which way to go? — Analysis of gaming revenue enhancement approaches for Macau

This paper analyzes different approaches used by casinos to encourage gaming participation and raise gaming revenue and discusses their implications for Macau's casino operations. Different from Las Vegas, Macau is a day-trip market dominated by risk-taking players. To improve its gaming operation results, Macau may consider increasing maximum bet limits, raising subjective winning probability, and adjusting game holds as gaming revenue enhancement strategies. The Las Vegas-style comp-centered casino promotion should be avoided.

Development of a trip profile for elderly American casino visitors

The US population is aging and those aged 65 years and older constitute an important segment of the population. One-half of those aged 65 years and older participated in casino gaming in 1998 (approximately 16 million), and this number is expected to increase with the increasing number of casinos and the growing number of the elderly. In reality, casino gaming already attracts a large number of elderly people. However, research on the elderly, who participate in this activity for recreation, is less visible in the academic literature. Furthermore, much of the literature on gaming has been traditionally focussed on addiction or the economic and social impacts of casino gaming development on local economies. As recreation providers, there is also a need to focus on ways to make this recreational activity worthwhile and thereby contribute to the well being of this growing population who likes to gamble. The focus of this study was to examine the casino trip characteristics of elderly Americans to two of the largest casinos in Michigan. The results of this study will be useful for casino operators and marketers who want to understand the characteristics of this lucrative segment of the gaming population.

Gambling on the Internet

This paper explores the political and social implications of the emerging online gambling industry and the ability of the existing legal framework to halt the industry's development. Making gambling more broadly available via the networks threatens heightened crime, an increased incidence of compulsive gambling, and cannibalized spending in other areas of the economy. Yet, U.S. state and federal laws are inadequate to deal with the onslaught of virtual gaming. States are unlikely to be able to prosecute out of state casino operators operating in cyberspace. Although they may be able to prosecute their own citizens for gambling on-line, enforcement will be difficult. Federal statutes may criminalize cyberspace casinos, but the U.S. government's ability to prosecute foreign operators is questionable. As existing legal frameworks prove inadequate to deal with a global, intangible entity, new legal, technological, and political solutions will have to be crafted in order to protect Americans from the substantial externalities posed by on-line gambling.

An analysis of the obligations of gambling entities under the FATF's 2003 anti‐money laundering recommendations

PurposeTo highlight the compliance issues which face gambling entities with the implementation of the Financial Action Task Force's (FATF's) 2003 Forty RecommendationsDesign/methodology/approachTo determine the gambling sector's attitudes towards the FATF's new anti‐money recommendations their responses to an earlier FATF consultation paper are analysed. Interested parties were asked to provide feedback on a number of options proposed by the FATF. Twenty six of the 145 respondents provided feedback on issues relating to the gambling sector. It is these responses that form the bases of the analysis in this paper.FindingsThe preferences of the gambling sector were not taken on board by the FATF. The increased customer due diligence (CDD), suspicious transaction reporting and the identification of politically exposed persons will be a burden on casino operators, the only gambling sector to be specifically identified in the new recommendations. Non‐compliance could be a serious issue.Research limitations/implicationsThe small number of responses from the gambling sector does place limitations on the ability to generalise the outcomes to the global gambling industry, though five of the respondents were gambling organisations.Practical implicationsFor regulators, the possibility of non‐compliance by the gambling sector should be addressed as should the likelihood of pressure for reduced CDD procedures.Originality/valueThe FATF's updated 2003 Forty Recommendations impose considerable compliance costs on the financial sector. A number of other business sectors are also caught within the scope of these new recommendations. This paper addresses anti‐money laundering compliance issues for the gambling sector, an area not previously explored.