This exploratory study was designed to identify and explain the sources of variation in the daily slot handle of a locals' market hotel casino in Las Vegas, Nevada. A regression model was used to analyze the effects of temporal, operational, and marketing variables hypothesized to influence slot handle. A simultaneous regression analysis was conducted with audited, secondary data using variables adapted from prior research. Significance tests were conducted at the .05 alpha level. The model failed to produce a significant effect for the food covers variable. The buy-in incentives (direct mail) and bingo headcount variables were significantly and positively related to slot handle. The temporal variables emerged as powerful predictors of slot handle. Finally, the results demonstrate the questionable economic significance of the buy-in incentives program and the bingo operation.This exploratory study was designed to identify and explain the sources of variation in the daily slot handle (i.e., the amount of money wagered in all the slot machines) of a locals' market hotel casino in Las Vegas, Nevada. A regression model was created to analyze the effects of variables hypothesized to influence slot handle. The results produced by the model were examined to determine the significance of each variable's effect as well as the overall explanatory power of the model. The findings could have a profound influence on the future operations and marketing strategy of the hotel casino examined in this research. Although prior literature has addressed aspects of the variables used in our model, their combined effects on slot handle have not been determined. Our model was designed to analyze the effects of temporal, operational, and marketing variables on slot handle.Slot revenues constitute the largest portion of the total revenues of hotel casinos outside the Las Vegas strip and downtown markets (Nevada Gaming Control Board, 1998). The majority of the remaining hotel casinos within the Las Vegas metropolitan area are informally classified as locals' market properties. The Las Vegas locals' market is composed of hotel casinos that derive a substantial portion of their revenues from local clienteles. These properties also operate hotels. State
Using data from three different North American casino markets, models designed to explain the variance in slot machine business volume (coin-in) produced a significant and positive effect for a variable representing casino-operated restaurant business volume (covers). Simultaneous multiple regression analysis was used to test the audited, secondary data for significance at the .05 alpha level. A 200-day period was examined for each casino property. The results of this study contradicted an earlier, counterintuitive finding by Lucas and Brewer that provided the basis for this work. The related literature is scarce, largely anecdotal, and split regarding the nature of the relationship between restaurants’ and casinos’ volumes. This exploratory study adds valuable empirical results to this limited but growing literature base while highlighting important strategic and managerial implications.
In two-game pairings of otherwise identical reel slot machines, the games with greater pars outperformed those with lesser pars. This finding held across five pairings, three casinos, three gaming markets, three game titles, three differences in pars, and five bank locations. These findings help clarify an important and polarizing issue within the literature and among casino operators. Many believe that increasing pars would be perceived as increasing prices, potentially driving customers to competitors. This concern takes on an exaggerated importance for operators catering to a frequently visiting, highly involved clientele. Over time, many believe such players would detect the increased pars, leading to an unwanted exodus of play. To the contrary, the findings did not support the ability of players to detect even egregious increases in the pars, suggesting a considerable insensitivity to changes in the obfuscated price. With pay tables featuring identical awards, there was no rational justification for playing the games with the greater pars. In spite of this clear disincentive, the games with the greater pars produced more theoretical win than their paired counterparts in each of five, two-game pairings. This suggested that an opportunity to increase operating profits may be available to those willing to buck conventional wisdom.
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