PAUL SCULPHER assesses the return of land-based casinos in the UK – but asks: is there a step change coming to table gaming pricing?
As I type, UK casinos have finally been given the green light to re-open on a somewhat limited basis, and casinos around the world are creaking into action at varying speeds, with some still completely closed, and some open without restrictions. The initial results are in for UK casinos at least, and seem to be reasonably consistent – pleasing early levels of business, generally with a slightly lower attendance than expected, but higher spend per visit.
There’s cautious optimism, although in the unique situation we’re in, there is of course plenty of uncertainty as to what happens in the summer. Is the fabled huge pot of new household savings going to be partially diverted into drop boxes, or will it get spent on staycations, longed-for other nights out, or simply stashed in case of future life-changing events?
One thing that does seem to have popped up as a bit of a game changer is consideration of price of play. For many years, UK operators have aspired to divert lower spenders (and, critically, slower spenders) in the direction of electronic gaming, both slots and more importantly (given we’re allowed unlimited numbers) onto electronic table games. Electronic Roulette is particularly key, given Roulette is the dominant table game in the UK.
The gaming floor yield specialist's dream is to get bigger players on the live tables; receiving exceptional customer service in a nice, fast, three or four player game while the "I've got £50($70) and I want two hours' entertainment from it" merchants are happy on the terminals, with a cocktail/coffee valet not too far away. The advantages of offering electronic play are obvious, with far lower annual cost per position, no sick days (well, that's if your tech team are on the case) and, if you wnat to insist on it or are obliged to provide it, an easy route to 100% carded play.
The interesting element has evolved out of early lockdown restrictions, however. In an environment where only three players were allowed per table, and in some cases social distancing plus restricted space meant operators couldn’t offer as many tables as usual, available playing positions were drastically reduced. As any A-level economics student can tell you, when demand remains constant but supply is restricted, price goes up – and in many cases that’s what happened. In the steady state pre-Covid, most operators were at least somewhat hesitant to go on the attack with minimum stakes, especially in a competitive landscape where most of your players are regulars; and can play down the road at your rival’s casino if they want, say, a £5 Blackjack game where you’ve jacked it to £10.
However, those decisions became a lot easier when you’ve got the excuse/reason that you only have 12 playing positions where you’d normally have 30, even to the extent of leaning on saying exactly that to players. “We’ve done it to help you get a seat” sounds a lot better than “we’ve done it because a £5 Blackjack game with five skilled players playing to 0.8% and ignoring the side bets – after 30% gaming duty, and running slow because we have to rely on trainee dealers – barely pays for the dealer and a piece of the other staff’s hourly rates, and we’re not a charity”.
As a side note, I’m always surprised how heavily UK operators rely on spend per visit as a key metric when looking at individual player value, especially at the lower end. Modelling everything in granular detail is tough – even for the operators who use the top of the line yield management software (not much of which is really designed with UK-sized business in mind). However, there’s a key stat that I don’t really see anyone looking at, and that’s speed of play.
In a world where you’re mostly limited to 20 slots, and maybe now a lower than usual number of table gaming positions, how fast people play is just as important as how much they play. Obviously decisions per hour and stake per round are part of the theoretical win calculation, but that’s generally just used in terms of Average Daily Theo or theo per day/year – theo per hour as a measure of speed of loss is also important in a world of limited supply. The truth is that, at busy periods, you really can’t afford to have someone taking up a valuable slot seat (and maybe now table seat) if they’re only playing 50p a spin, at a glacial pace. Seats are for gamers only!
Since re-opening in the UK there’s the additional incentive to trade players up the cost curve because, as predicted by many, staffing is an issue. A cursory look at LinkedIn or any operator’s website will see them all hiring gaming staff, or trying to; and with plenty of staff having hoovered up furlough payments with no intention of returning to work (or returning to the country), the cupboard is pretty bare.
The normal route of laying on a ton of training schools will be tough too – the dearth of staff in all hospitality roles may well mean a rise in wages. And not too many 20-year-olds looking for a job will actively seek the one which needs six weeks of training and working through the night; rather than the bar or waiting job with a couple of days to get up to speed and knocking off nightly at 11pm.
The UK has always been relatively timid on pricing for table games. Part of this may be the neighbourhood-type style of many smaller sites. Using my not-particularly-scientific indexing method of comparing minimum Blackjack bet to price of a beer, in most UK casinos outside London you've always been able to get a game for around the price of a pint, often less.
There are plenty of countries where that wouldn’t be true, and while dealer wages in the UK are proportionately lower than many countries, it seems to me that a rebalancing is due.
The Covid-19 outbreak and restrictions of available player positions, now exacerbated by lack of staff to operate them, may hurry operators down the line of catching up with other countries – and making table gaming an option only for those prepared to level up their play.
Paul Sculpher, Gaming Recruitment Solutions, and Independent Gaming Consultant.
Credit for this article goes to Gambling Insider.