Category

Gaming

Gaming in California

By | Cardrooms, Casinos, Gaming

People are often skeptical of the claim that California generates more gaming revenue than Nevada, but then nod with understanding when they hear the components—California Lottery (aka the numbers racket) $3 billion, tribal casinos $8 billion, cardrooms $1+ billion and another $250 million from horseracing—over $12 billion total. In comparison, Nevada casinos generated $10.8 billion of gaming revenue in 2016.

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Evolution of Non-Gaming Activities

By | Casinos, Gaming

“Whosoever desires constant success must
change his conduct with the times.”

Niccolo Machiavelli

Traditionally, non-gaming amenities like food and beverage and hotel rooms were giveaways to attract gamblers to venues with the hope of capturing their gaming activity surrounding their visit. That all changed in 1989 when Steve Wynn opened the Mirage Resorts—the Strip’s first new resort in almost two decades—with a functioning volcano, white tigers and an over-the-top Polynesian motif. In the three decades since, gaming in Las Vegas has evolved beyond slots, craps and card games to a full recreational escape with world-class shows, dining, spa, nightclub and shopping activities. In fact, most of the growth in the gaming industry has come from non-gaming amenities such as these. For example, in 2016, MGM Resorts saw 75% of its revenue from non-gaming sources. Wynn Resorts boasts three (XS, Tryst, Surrender) of the top-grossing nightclubs in the United States, generating over $150 million per year in annual revenue.

While gaming has expanded in California over the last two decades, the non-gaming experience at casino resorts in the state has lagged that offered in Las Vegas. California casinos and cardrooms still generate most of their revenue from gaming activities and, although many have upgraded their facilities and offer dining and other spa/resort amenities, they still don’t offer the full complement of amenities offer by Las Vegas properties. For example, there are seven unique Cirque du Soleil shows in Las Vegas, yet none at California gaming resorts. Likewise, there are multiple world-class restaurants and retail shopping venues affiliated Las Vegas resorts; a world class chef has yet to connect with a California casino and the typical retail experience is limited to gift shops and outlet malls.

There’s a reason why 43 million visitors attended Las Vegas in 2016—Sin City resorts invest in the amenities that guests demand. Given the proximity to California, it’s not surprising that residents of the Golden State make up the largest percentage of out-of-town visitors to Nevada. In 2016, over 20% of those guests arrive from a California point of origin;11 almost 45,000 cars a day cross the California-Nevada state line on US Route 15 at Primm Valley Casino Resorts. It follows that there’s a huge opportunity for California casino resorts to retain those 8 million casino patrons (and their spending) by adding the non-gaming amenities enjoyed at Las Vegas resorts. At some point, expect California gaming operators to wake up and realize that they’ll have broader appeal (and higher revenue) if they offer a complete recreational experience to today’s gaming patrons.

11Las Vegas Visitors and Convention Authority.

About the author

Kyle Kirkland is the current president of the California Gaming Association, the 501(c)(6) non-profit trade association that represents California cardrooms.  Mr. Kirkland is President and General Manager of Club One Casino, a 51-table cardroom in Fresno and holds the same positions for two smaller cardrooms.  Mr. Kirkland’s background includes work in the consulting, finance, music and gaming industries, and he has served on the boards of several public companies.  Mr. Kirkland holds an A.B. degree from Harvard College magna cum laude in Economics and an MBA degree from the Graduate School of Business at Stanford University.  He can be contacted at kyle@calgaming.org.

Player-Dealer Games

By | Cardrooms, Gaming, Player-Dealer

“Baby, you’re so money and you don’t even know it!”

– Trent Walker, Swingers

State-licensed California cardrooms offer a variety of poker games and variants of other casino standards like blackjack and baccarat and other novelty games Fortune Pai Gow®, Three Card Poker® and Spanish 21®.9 Cardroom table games are operated pursuant to long-standing court decisions and statutes adopted by the state legislature which permit such games provided the games are offered using a “player-dealer” position.10 All player-dealer games are approved by the California Department of Justice Bureau of Gambling Control prior to being offered by a state-licensed cardroom to the general public.

In Nevada-style commercial casino and California tribal casinos, the casino plays the dealer’s hand and invites all the other players to compete against it. All player wins are paid by the casino (aka the house) and all player losses are collected by the casino. In contrast, California cardrooms cannot act as the “house” or supply the funds against which other players wager. Instead, cardrooms offer variants of table games with a unique player advantage—players have the opportunity to act as the “player-dealer” and wager on the dealer’s hand. In other words, in table games at California cardrooms, one or more players compete against the others, playing the dealer’s hand, paying winners and collecting from losers from the money at risk on the table.

In California, the opportunity to act and wager as the player-dealer is an advantage to players given the odds offered on the dealer’s hand. Despite the advantage, not all opt to act as the player-dealer, nor are they required to do so. To keep games in continuous operation, cardrooms employ state-licensed, third party proposition players to accept the player-dealer position in the event that the other players at the table decline to do so. That said, every player in the cardroom variants of blackjack and baccarat has the opportunity to act as the player-dealer every two hands. Next time you’re at a cardroom, try it. It might seem counter-intuitive based on your experience at other casinos, but your bankroll will love you for it!

9Three Card Poker and Fortune Pai Gow are registered trademarks of Scientific Games Corporation. Spanish 21 is a registered trademark of Masque Publishing.
10Court rulings that upheld player-dealer games are:
• Sullivan v. Fox, 189 Cal.App.3d at 678
• Bell Gardens v. City of Los Angeles, (1991) 231 Cal.App.3d 1563, 1568
• Huntington Park v. County of Los Angeles, (1988) 206 Cal.App.3d 241, 250
• Walker v. Meehan, (1987) 194 Cal. App. 3d 1290

About the author

Kyle Kirkland is the current president of the California Gaming Association, the 501(c)(6) non-profit trade association that represents California cardrooms.  Mr. Kirkland is President and General Manager of Club One Casino, a 51-table cardroom in Fresno and holds the same positions for two smaller cardrooms.  Mr. Kirkland’s background includes work in the consulting, finance, music and gaming industries, and he has served on the boards of several public companies.  Mr. Kirkland holds an A.B. degree from Harvard College magna cum laude in Economics and an MBA degree from the Graduate School of Business at Stanford University.  He can be contacted at kyle@calgaming.org.