
Harrrah’s Low Rollers Account for 80% of Revenue & 100% of Profits - kimboslice
http://ryanspoon.com/blog/2008/07/03/harrrahs-low-rollers-account-for-80-of-revenue-100-of-profits/
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mattmaroon
I think they've got the cause and effect backward there. Harrah's low rollers
account for so much of their overall action because their casinos are so bad
that high rollers avoid them. You can't simply assume that because all of
their action comes from low rollers, they are pursuing some sort of brilliant
strategy that nobody else is by not courting the high rollers (when they could
easily go after both).

I'm guessing the 30% of low rollers that return very frequently are largely
locals or near-locals (Harrah's has casinos in damn near every gaming
jurisdiction in this hemisphere). Harrah's does a great job of catering to
them.

Much of the other 70% would probably be mid-rollers, who I'd call value
gamblers. They give the casinos just enough action to get some good freebies
and nothing more. They end up spending less than if they had just booked the
hotel and paid for food like a low roller does.

Harrah's does comp those two groups much better than anyone else. That also
makes them the easiest to abuse comp program on the strip.

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hugh
_You can't simply assume that because all of their action comes from low
rollers, they are pursuing some sort of brilliant strategy that nobody else is
by not courting the high rollers (when they could easily go after both)._

Sure, they could, but then they'd have to spend money to target that group. Is
this any different to the high-end/low-end market segmentation of any other
business?

I guess one of the reasons that they can open a Harrah's in damn near every
gaming jurisdiction (New Orleans and South Lake Tahoe spring to mind as the
two Harrah's I've been to) is that they can afford to build a fairly cheap
casino without tainting their brand image. Compare that to, say, The Venetian,
which can only open a new branch (in, say, Macau) if they're willing to spend
the billions it takes to build something comparable to the Venetian in Vegas.

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mattmaroon
Harrah's has locations in every jurisdiction mostly due to merger and
acquisition. They're basically a number of small gaming operators that got
rolled into one.

Also, most of their casinos were not cheap when they were built. They are just
old. The Imperial Palace (now the laughing stock of that part of the strip and
soon to be bulldozed) was one of the nicest hotels around 50 years ago.

In fact, I don't think they've actually built a single casino since Loveman
took over.

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steelydaniel
Not even a surprise--thats how the casino biz works. High rollers are there
for the resort to create buzz and bring people in. Just like Mercedes puts an
SL convertible on the showroom to bring in gawkers, and some of them leave
with a C class. Amex spreads rumors about a black card---it increases the
wannabes signing up for credit cards.

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mattmaroon
That's not true at all. The casinos that cater to them make fortunes from high
rollers. The average person on the Vegas strip blows something like $20 a day
in gaming and has a total gaming budget of about $600 per trip. High rollers
bet big enough that an unusual winning or losing streak can shift a casino's
quarterly results by 5% or more.

And Amex does have a black card, it's not a rumor (though there are many
untrue rumors about it). I know a holder, who not coincidentally is how I know
so much about comp programs and how casinos treat high rollers.

