I’m completely fascinated with the inner workings of Vegas (like most people) so I really ate up Christina Binkley’s excellent new book
It’s a great read on Las Vegas and how it has evolved over the years to its current incarnation.
Binkley provides all kinds of great stories culled from years of following around primarily three legendary Vegas moguls: Kirk Kerkorian (MGM Grand etc), Steve Wynn (Wynn, Bellagio etc) and Gary Loveman (Harrah’s etc).
One of my favorite parts of the book took place outside the strip and in Harrah’s crappy casinos and riverboats scattered all over the country. I’ve been to all of the casinos in Vegas and I have also been to pale-in-comparison Reno, Nevada, which has one of Harrah’s crappy casinos.
For some reason I wouldn’t expect Harrah’s to be as smart as they are since their casinos look so crappy (the ones that I’ve been to). Just look at their stock price since 1998 (that’s around the time Gary Loveman was named CEO) and you can see how well those crappy casinos perform:
So what makes Harrah’s so smart?
Here are a few things:
1) They were the first ones to introduce those “Rewards” cards that track everything from how frequently you visit their casinos, to what games you prefer to gamble on, to what drinks you prefer, to if you can be enticed to gamble longer with free food or free hotel rooms or show tickets or all of D above etc.
They use the data from the cards to treat gamblers like shoppers. They create “behavior modification reports” on their regular customers showing what each is enticed by and seeing who needs to be sent snail mail, email or phone calls when they aren’t showing up at their usual frequency.
Note: Most Las Vegas slot machines are programmed to keep anywhere from 2 percent to 4 percent of gamblers’ money over time. This is referred to as the “hold”.
2) They found out that could learn tons about their customers and gambling in general by tracking how fast people push the buttons on slot machines. That really made me feel like a lab rat.
3) They even track customers’ live slot machine performance against the normal odds for the game. Why? So if the customers losing streak is below the normal odds a “luck ambassador” will appear and try to cheer them up with kind words and something free like a drink, food, or room.
I could keep going with these examples for days and days but I’m sure you get the idea why Harrah’s is smarter than their casinos look.
For those of you who are intrigued with Vegas and what happens behind the scenes you definitely need to buy Christina Binkley’s new book