A few years back the casinos were blaming the economy and tight money for their financial losses. But was that really the problem. Or should much of the blame for casino industry’s fiscal crisis rest firmly in the laps of a few over-paid chief executives who thought the bubble would never burst. And how did these Bozos react to the recession? In typical corporate fashion they declared themselves huge executive bonuses, threw parties and handed out a bunch of awards. In the corporate world there’s no such thing as failure – only “new direction.”
Fifteen years ago the average Chief Executive Officer of a major casino corporation earned around $300,000 a year in executive bonuses. Five years ago, at the height (or maybe it was the bottom) of the economic downturn, the industry’s top CEO’s was paid $92 million in executive bonuses. All of this happened at a time when the casinos were struggling to service excessive debt, curtailing ill-conceived construction projects, tightening up their games and cutting payroll at the customer contact level. Make sense? Not really.
The downturn in the economy also reduced the number of recreational gamblers playing in Vegas. Those that still hit the tables often showed up with smaller bankrolls. Dealer tokes were smaller and less frequent. Dealers who relied largely on tokes for their income have ended up taking second jobs or working double shifts to help make ends meet. All of which showed up in their attitudes at the table. That, in turn, drove even more players away from the games. Suddenly you had empty casinos and a giant sucking sound coming from the corporate offices.
This problem was not specific to Vegas. Atlantic City, Tunica, Biloxi, and a host of Native American casinos suffered as well. Employees of a tribal casino in Onawa, Iowa showed up to work one day, only to be told that their jobs were history. About 185 people were laid off, and the Omaha Tribe-owned CasinOmaha was closed, at least temporarily. The closing was an effort to save the business, casino general manager Jim Hunt. “We haven’t always had the best management before.”
Casinos aren’t the only ones impacted by the downturn in the economy. Income for State lotteries were down. The National Thoroughbred Racing Association said that betting on horse racing was off by 10 percent nationwide year over year. The gaming industry – once thought by many to be recession proof – clearly was not.
What can you and I do about it? Nothing. For us it should be business as usual. If you find yourself in possession of more comps than you can use don’t get sucked into playing more just so you can “take advantage” of them. Odds are it is the casino that’s doing the “taking advantage.” Instead, do what you should be doing already. Plan your play and play your plan. Bet with your head, not your heart, and stick to the limits of your bankroll. Stay away from the ATM’s – you can’t afford the vig. Instead of same-session re-buys think in terms of win goals and loss limits. The old “basics,” combined with a little “DI skill,” will go a long way toward seeing you through tough times at the tables.