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Casino and Casino-style Gambling - US - January 2010

SCOPE AND THEMES
What you need to know
Definition
Data sources
Sales data
Consumer survey data
Advertising videos
Abbreviations and terms
Abbreviations
Terms
EXECUTIVE SUMMARY
Recession takes its toll
With more options, consumers gamble closer to home
Casino tax revenue is desirable, increasing sites and competition
Leading commercial casinos see sales decline in 2008
Marketing and advertising focuses on luxury, service and escapism
Leisure options reducing penetration in decade-long trend
Going local—except at the high end
Clear opportunities for developing the market
Gambling experience limited
Loyalty membership high, loyalty low
Promotions most effective with youngest and oldest
Men, 35-54s, over-$100Ks leave casinos with highest wins/losses
Family fun may be attractive to heavy gamblers
Potential gains to be made by attracting women to tables
Non-gambling activities driven by income, gender
Acculturation significant in casino usage among Hispanics
INSIGHTS AND OPPORTUNITIES
Adults online aged 25-34: Important today, critical for future growth
Gaming without wagering
Online gambling as an educational and promotional tool
More and more tournaments—for everyone and for all types of gambling
Expand through video gaming terminals
Hispanic market beckons
INSPIRE INSIGHTS
Introduction
Trend: That's (Home) Entertainment!
What we've seen
What to do about it: if you can’t beat ‘em join ‘em
Tech Trend Focus: Augmented Reality and Tracking our Location
Tech Bohemia and Nouveau Kitsch
But we want the guests to gamble, right?
Unique activities for teens and tweens
MARKET SIZE AND FORECAST
Key points
Growth halts in 2007; revenues remain flat
Consumers curtail spending on gambling
Recovery to pre-recessionary levels will be slow
Figure 1: Total U.S. gambling revenues, at current prices, 2004-14
Figure 2: Total U.S. gambling revenues, at inflation-adjusted prices, 2004-14
COMPETITIVE CONTEXT
Key points
States’ desire for tax revenues leads to increased competition
Figure 3: Casino and racino tax paid to state and local governments, FY 2008 and FY 2009
Despite illegality, 12% of adults played gambling games online
Figure 4: Incidence and frequency of online gambling, by gender, November 2009
Online gambling to remain illegal
SEGMENT PERFORMANCE
Key points
Largest commercial casino markets are losing revenue
Tribal casinos and racinos expanding locations
Figure 5: Number of U.S. locations for commercial, tribal, and racetrack casinos, 2006-08
Figure 6: U.S. casino revenue, segmented by facility type, 2007 and 2009
SEGMENT PERFORMANCE—COMMERCIAL CASINOS
Key points
What happens in Vegas, does not stay there
Declines in penetration and increased competition pressure revenues
Figure 7: Total U.S. gambling revenues at commercial casinos, 2004-14
SEGMENT PERFORMANCE—TRIBAL CASINOS
Key points
Revenue from tribal casinos outpaces the overall casino market
Expansion mitigates recession’s impact
Figure 8: Total U.S. gambling revenues at tribal casinos, 2004-14
SEGMENT PERFORMANCE—RACETRACK CASINOS (RACINOS)
Key points
Smallest segment, impressive growth
Growth driven by legalization of racetrack casinos
Figure 9: Racino legalization, opening date and format, 1992-2008
Figure 10: Total U.S gambling revenues at racetrack casinos, 2004-14
GEOGRAPHIC DISTRIBUTION
Key points
Geographic locations
Figure 11: States that participate in casino gambling, 2009
Nevada and New Jersey remain the largest markets for commercial casinos
Figure 12: Consumer spending on commercial casino gaming, by state, 2007-09
Most markets show significant revenue declines
Figure 13: Top 20 U.S. casino markets, by revenue, 2006-08
Pennsylvania tops in racetrack casinos
Figure 14: Top 13 U.S. racetrack casino markets, by revenue, 2006-08
MARKET DRIVERS
Key points
When the economy sours, so do gambling revenues
Figure 15: Congressional budget office economic projections for calendar years 2009-11
Households with $100K+ on the rise and more likely to visit casinos
Figure 16: Number of households in quintile household income brackets, 2005 and 2008
Americans saving more
Figure 17: Income, savings and savings rate, Q3 2007-Q3 2009
LEADING COMMERCIAL CASINOS
Key points
Sales lag for leading operators
Figure 18: Revenue for selected U.S. commercial casino operators*, 2007 and 2008
Harrah’s Entertainment Inc.
MGM Mirage
Ameristar Casinos
Wynn Resorts
Pinnacle Entertainment
Las Vegas Sands
BRAND QUALITIES
Introduction
Wynn Resorts
Borgata Hotel, Casino & Spa, Atlantic City
Lumière Place Casino & Hotel
Trump Entertainment Resorts
Foxwoods Resort & Casino
INNOVATION AND INNOVATORS
Portable sports betting
Easy weekend access for players
Guides to games
Sports “stadium” far more lavish than home entertainment can provide
ADVERTISING AND PROMOTION
Key points
Overall ad expenditures rose among top brands in 2008
Figure 19: Media expenditures of leading casino hotel brands, 2007 and 2008
Loyalty cards and comps anchor in-house marketing efforts
Web marketing
Luxury, escape, and winnings
Luxury accommodations and gaming, together
Figure 20: Chukchansi Gold Resort & Casino, July 2009
Figure 21: Golden Nugget Casino, September 2009
Escapism
Figure 22: Morongo Casino Resort & Spa, October 2009
Figure 23: Diamond Jack’s Casino, December 2009
You can win here
Figure 24: Station Casinos, December 2009
Figure 25: Motor City Casino Hotel, July 2009
CASINO VISITS: PENETRATION, FREQUENCY, AND LOCATION
Key points
Fewer adults see the appeal of casinos
Figure 26: Visited a casino in the past year and frequency of visits, 2000/01-2008/09
Figure 27: Type/location of casino visited, by geographic region, 2002/03-2008/09
Affluence impacts visits to Vegas and Atlantic City
Figure 28: Incidence and frequency of casino visits and location of casinos visited, by household income, April 2008-June 2009
Striking differences seen in frequency of visits in online pool by household income
Figure 29: Trips to casinos and racinos, by household income, November 2009
Adults gamble relatively close to home
Figure 30: Incidence and frequency of visits, and location visited, by geographic region, April 2008-June 2009
Participation higher among online respondents
Aversion to gambling accounts for only one in six respondents
Figure 31: Visits to casinos and non-gamblers, by gender, November 2009
Figure 32: Visits to casino in past year, by age, November 2009
Online respondents visit three times as often as offline pool
Figure 33: Trips to casino hotels, casinos, racinos, and online casinos, by gender, November 2009
Frequency of visits by age: seniors lead offline, 25-34s lead online
Figure 34: Incidence and frequency of casino visits, by type/location, by age, April 2008-June 2009
Figure 35: Trips to gambling outlets, by type of facility, by age, November 2009
AMOUNT WON/LOST ON MOST RECENT TRIP
Key points
Men wager three and a half times more than women
35-54s wager the most; yet 21-34s make the most visits
Highest-income households wager the most
Figure 36: Total amount won/lost on last gambling visit, by gender, age and household income, November 2009
DEVELOPING THE MARKET
Key points
More opportunities via tournaments, education and environment
Figure 37: Opportunities to develop the market, by gender, November 2009
Figure 38: Opportunities to develop the market, by age, November 2009
GAMBLING EXPERIENCE
Key points
Most adults are not regular gamblers, even casually
Figure 39: Knowledge of games and participation outside of the casino, by gender, November 2009
Young adults online more knowledgeable, more active outside casinos
Figure 40: Knowledge of games and participation outside of the casino, by age, November 2009
Affluent more knowledgeable about games, more likely to gamble outside casino
Figure 41: Knowledge of games and participation outside of the casino, by household income, November 2009
IMPACT OF LOYALTY PROGRAMS AND PROMOTIONS
Key points
About half of gamblers have a loyalty card
Promotional offers not prerequisites for vast majority
Figure 42: Gambling participation, by age, November 2009
GAMBLING BEHAVIOR
Gambling is entertainment for most
Figure 43: Attitudes toward gambling, by gender, November 2009
Young adults less likely to set a budget; more likely to expect to win
Figure 44: Attitudes toward gambling, by age, November 2009
GAMING PREFERENCES
Key points
Slots, blackjack and video poker are the most popular games
Figure 45: Games usually played at the casino, by gender, November 2009
Young adults more likely to bet on sports and table games
Figure 46: Games usually played at the casino, by age, November 2009
NON-GAMING ACTIVITY AT CASINOS
Key points
Fewer than one in three engage in activities besides eating, gambling
Figure 47: Non-gaming casino activity participation, by gender, November 2009
25-54s more keen on non-gaming activities
Figure 48: Non-gaming casino activity participation, by age, November 2009
Broader packages for the well heeled
Figure 49: Non-gaming casino activity participation, by household income, November 2009
CHOICE OF ACCOMMODATION
Promotional offers and past experience significant factors
Figure 50: Important attributes when selecting a hotel for overnight trip to a casino, by gender, November 2009
One in four gamble only at a single location
Figure 51: Single casino gambling while away from home, by gender, November 2009
RACE AND HISPANIC ORIGIN
Key points
Casino visits
Figure 52: Incidence, frequency, and location of casino visits, by race/Hispanic origin, April 2008-June 2009
The role of acculturation and language in Hispanic participation
Figure 53: Incidence and frequency of casino visits among Hispanics, by language spoken at home, April 2008-June 2009
Developing the market
Figure 54: Opportunities to develop the market, by race/Hispanic origin, November 2009
Gambling experience
Figure 55: Gambling experience, by race/Hispanic origin, November 2009
Impact of loyalty and promotional activities
Figure 56: Use of loyalty cards and promotions, by race/Hispanic origin, November 2009
Blacks looking to win, gambling the largest amounts
Figure 57: Casino visit attitudes, by race/Hispanic origin, November 2009
Figure 58: Games usually played at the casino, by race/Hispanic origin, November 2009
Non-gaming activity at casinos
Figure 59: Non-gaming activities participated in at the casino, by race/Hispanic origin, November 2009
CLUSTER ANALYSIS
High Rollers
Old Dogs
The Well Rounded
Characteristic tables
Figure 60: Casino gambling clusters, November 2009
Figure 61: Frequency of visitation, by casino gambling clusters, November 2009
Figure 62: Opportunities to develop the market, by casino gambling clusters, November 2009
Figure 63: Gambling behavior and attitudes, by casino gambling clusters, November 2009
Figure 64: Amount won/lost on most recent trip, by casino gambling clusters, November 2009
Figure 65: Games played, by casino gambling clusters, November 2009
Figure 66: Activity participation, by casino gambling clusters, November 2009
Demographic tables:
Figure 67: Casino gambling clusters, by gender, November 2009
Figure 68: Casino gambling clusters, by age, November 2009
Figure 69: Casino gambling clusters, by household income, November 2009
Figure 70: Casino gambling clusters, by race, November 2009
Figure 71: Casino gambling clusters, by Hispanic origin, November 2009
Cluster methodology
CUSTOM CONSUMER GROUPS
Casino visits
Figure 72: Trips to gambling outlets among 21-34s, by type of facility, by race/Hispanic origin, November 2009
Developing the market
Figure 73: Opportunities to develop the market among 21-34s, by race/Hispanic origin, November 2009
Gambling experience
Figure 74: Gambling participation among 21-34s, by race/Hispanic origin, November 2009
APPENDIX: OTHER USEFUL CONSUMER TABLES
Figure 75: Opportunities to develop the market, by household income, November 2009
Figure 76: Loyalty program and promotional offer participation, by household income, November 2009
Figure 77: Attitudes toward gambling at casinos, by household income, November 2009
Figure 78: Games played at the casino, by household income, November 2009
Lower income online groups less likely to visit a casino
Figure 79: Visits to casinos and non-gamblers, by household income, November 2009
APPENDIX: TRADE ASSOCIATIONS

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