The Casino Industry

Arnaldo Perez

Prof. Kronenberg

4200W: Business Seminar

June 12th 2013

1. Examine the structure of the casino industry.

The Casino Industry is like that of any other Corporation in the world, the goal is to get maximize profits, minimize loss and please the stakeholders. With the massive quantity of Casinos that are located around the world especially in Casino Capitals i.e. Atlantic City, and famous [Viva] Las Vegas, there exists variations in their structure which is dependent on their size AND location. Although games and entertainment offered are common, the reporting relationships and responsibilities of workers on duty may vary, the overlying organization is essentially the same.

Below I have taken the organizational diagram of a "Typical Casino"" format that many have adopted, and use to this day. Listed at the top is the President (usually the owner/founder), followed by the VP of Casino Operations, which then stems down into a sub-category of a sub-category.

(Google image search: Structure of the Casino industry)

From this diagram, it can be said that the skills/experience needed to operate a casino are crucial. Departments are divided (by functional lines) beneath that of the VP of Operations to show the appropriate specialization for areas for which it takes to full operate a functional casino. Managers that specialize in their respective department should not operate using a value-chain approach. Also certain VP's should be free to operate freely within their departments, to perform their assigned tasks/responsibilities, and people in the lower-tier functions of the casino should report to their respective managers, in no way should a Cashier report to the President (as erroneous as that sounds).

On the game floor, managers should be responsible for supervising personnel and gaming operations. The Shift manager in turn is responsible for supervising the table games for that shift or allotted time of play, they respond to the Game Manager. Pit managers are in turn responsible for the dealers on the floor in that designated shift, other duties involve game protection (to report counting cards or other forms of cheating) and customer relations. When a person wins a large sum of coins (from slots) or chips on the tables, booth cashiers are responsible for exchanging the proper monies, and detecting fraud.

Surveillance/Security is responsible for protecting the assets of the casino, during drop sequences or on the floor. Officers report suspicious activity to the Surveillance manager, in turn can lead to an apprehension or arrest depending on circumstance, also upholding the House Rules and Etiquette. Workers in their respective departments, respond to the appropriate personnel, with the amount of freedom and range in management allows for an efficient company with strong earnings

2. What are the strategic groups in the casino industry?

Within the Casino Industry the strategic groups are other rival Casinos, their customers, "Las Vegas", and other state regulations.

In Exhibit 2, you can see the breakdown of "Geographical Locations v. Revenue", marked right at the top one can see that Nevada has 260 Land Casinos that bring in on average 10.4 Billion in revenue, noting that about 55% of that comes from the Las Vegas Strip. New Jersey comes in 2nd with about 4 Billion in revenue, with only 11 land based casinos making all of its money from Atlantic City. Atlantic City and Las Vegas are about Neck-n-Neck with one another, the rivalry between them is strong. Amongst the other Casino's located in the list, they don't come close to the revenues of those two cities. On that list a total of 9 states (without NJ or NV) earn a Billion+ in revenue by the year, although they aren't necessarily a force to that of Las Vegas and Atlantic City, but they are competition because although having two major Gambling Capitals in both the East coast and the West Coast, other states have adopted their own Casino's (Empires) that attract people from their respective areas to visit their destinations with simply one tank of gas. A large concentration of the people that come to the strip are those to that of 50+ yrs. Old and make on average 50K a year, what makes this so is the trend that exists that "Gambling" (though not always the main thing) is an acceptable form of nightlife entertainment, great shopping and dining to follow.

The "Las