by Steve Norton
CEO, Norton Management

Conservatives oppose Adelson’s federal gambling ban | TheHill

On the issue of Online Gaming, I am on the same page as Sheldon. Even if the licenses are given to the existing operators, there are few instances where it helps that states gaming development. The one place I feel it was justified, was New Jersey; where Atlantic City was loosing half of their customer base to Eastern Pennsylvania, Maryland and the slots at Aqueduct and Yonkers. Approximately 95% of New Jersey's population has an out of State casino or racino that is closer to them than AC.And in AC's case, all of the Online Casinos are being operated by AC casino companies. But in Philadelphia, where the State is looking at Online Gaming, slots at bars and airports, Fantasy Sports, and who knows what else; casino are located all across the State. And even if Online Gaming is operated by the existing casino operators, they will be taking live customers from the live experience; and will have less desire to invest in improving their home casinos.

There are new types of gaming that could help the casino industry, like Sports Betting, Fantasy Sports, E-Sports and other skill based games; that will bring new customers to existing casinos; as long as the current operators run the new games. If there are sections of a state, that is more than 25 or 30 miles from a live casino; then slots at bars might be appropriate, at a high tax rate, and run by the nearest casino.

I worked for Sheldon Adelson, as President/COO of the LV Sands, the year we opened the Sands Expo Center; and his ideas have greatly benefited the LV Strip; as well as Singapore and Macao; by demonstrating the strength of large city wide conventions and trade shows. Many casino resorts had a history of attracting conventions, that they could handle in-house. But when Sheldon's Convention Industry trade show, Comdex was trying to find accommodations fro 170,000 attendees and exhibitors; the larger properties were reluctant to provide rooms to customers who would have little or no time for casino play; as meetings and exhibits would take too much of their time; and were being held all over town, incuuding the the LV Convention Center, the next door Hilton, Caesars Palace, Bally's and the Sands Expo Center. Well our solution was to raise the average mid-week room rate from around $50 to $150, less 10% for booking the reservation and providing free buses to all of the show sites. And we promised them profitable function business, and suggested that their gourmet restaurants would be full of paying, rather than comp, customers. And Comdex helped Las Vegas to pass Chicago as the Convention Capital of North America, a title held almost every year since.

And the impact of the convention trades, has created new profit centers for the larger Strip resorts, where in 2015, the last year reported in the Nevada Abstracts, occupancy was 92.1% at an average room rate of $163, and the casino win represented under 35% of total revenue, and the non casino departments provided 73% of the departmental profits, with rooms producing 40%.

The gaming industry is much stronger, if the casino revenues are generated on property, rather than over the phone or Internet.