A number of factors can drive the idea of developing a casino, including inadequate space in a hotel foyer, the need for more hotel occupancy, and the availability of a licence as part of a tourism investment program. Too often, the idea takes over and becomes a reality. The next steps include the creation of a casino layout (that matches the perceptions of players) and the beginning of construction.
Developers fall for common misunderstandings about casino mega888 and gambling that often lead them into trouble. We’ll get to that later, but let us first look at the way the most successful operators do things. They start by understanding the market, including its size, willingness, disposable income, market-specific needs, and compatibility of player profiles with other guests of the resort, hotel or entertainment complex. This knowledge is then used to estimate the number of potential visitors, their frequency and how long they will be visiting the hotel, resort or entertainment complex.
Additional projections regarding the equipment, floor area, and operating times can be made by extrapolating. Financial spreadsheets are then created to give a supported and considered view on profit, capital expenditure, returns on investment. However, the feasibility goes beyond just looking at the numbers. It also considers how to maximize the opportunity, eliminate potential fatal flaws, as well as what is required to compete in the market. It doesn’t have to be complicated and costly. In the beginning stages, it is enough to identify whether you have a valuable rough diamond or an insignificant glass chip. Professional casino consultants will deliver an initial feasibility at a fair price within 10 working days. This not only provides a decision point about the opportunity or idea, but also provides a framework for screening potential future opportunities. Let’s examine some of the pitfalls.
The myth of the “license to print cash” is an incredibly popular one about casinos. It seems that it prevents people conducting due diligence and care when deciding whether to open a shop or restaurant. These are just a few examples. The development of a large casino took place in a jurisdiction that has restrictions on maximum stakes for slot machines. To make the casino profitable, heavily relied on the revenue expectations for the slot machines. An experienced manager ran a revenue capacity model on the slot machines several days before the casino opened. It revealed that it was impossible to generate sufficient income from the number of installed machines. Naturally, the casino didn’t live up to expectations. A US-based operator developed a large casino that failed in Britain. It didn’t understand how live gaming works and the mobility of players. In Las Vegas, a British company was able to succeed despite its inability to comprehend the customer and had fatal design flaws.
Another common misconception about casino players is that of James Bond. The Pareto Principle is heavily applied to casinos, with around 80% (or more), of the revenue being generated by 20% (or fewer) of their visitors. The 20% does not include casual visitors who come to the casino dressed up for a night of fun. Invariably, the uninitiated 5-Star Hotel Manager is shocked by the presence in their lobby of “non James Bond-ness”, shall you say, of casino players. “Where’s that casino manager, he’s obviously got this all wrong…” And on goes the conflict-of-interests. The feasibility study will help the corporation identify conflicting situations quickly and provide solutions.
I can recall a time when a group executives tried to develop a large caravan site on the grounds at a destination casino resort. This was about two hours away from a major city. It was the closest casino to the city, and it was only 4 hours drive away. When the CEO reprimanded them, the executives proudly presented their meticulously planned plan to significantly increase footfall at the resort. They did not realize that the caravans lining the roads would prevent the 20% of visitors who generate 80% revenue. The significance of this shortening of the gaming session was obvious!