2. The Casino Industry McGraw-Hill/Irwin Strategic Management, 3/e
Copyright © The McGraw-Hill Companies, Inc. All rights reserved.

3. The Casino Industry Icebreaker Question
Have you ever visited a casino?
If so, what did you think of it?
Do you think gambling is a form of entertainment that competes with, say, attending a sporting event or a movie or a play?

4. The Casino Industry
Examine the structure of the casino industry.

5. The Casino Industry
How are gambling companies in Las Vegas responding to the changes in the industry structure?

6. The Casino Industry
What has been the effect of the changing industry structure on casinos in Atlantic City?
What main threats do they face?

7. Q1. Industry Structure POTENTIAL ENTRANTS INDUSTRY COMPETITORS
For traditional casinos, Internet gambling sites big threat because of low start up costs
POTENTIAL ENTRANTS
INDUSTRY COMPETITORS
SUPPLIERS
BUYERS
Ample choices; low switching costs despite incentives by casinos; for families, choices available for the family entertainment dollar
New casinos increase the fight for customers’ dollars; significant investment requirement increases rivalry; native American casinos get tax breaks; Internet gambling is unregulated and untaxed.
SUBSTITUTES
Theme parks, shows, etc.

8. Q2. Las Vegas’ Response Project Las Vegas as destination gambling city
120,000 hotel rooms, dining choices, etc.
Airline connections
Return to “sinful” past
More adult-oriented entertainment
“What happens in Vegas, stays in Vegas” theme
Investment
Refurbishing – new wings in existing hotels
New resorts – Steve Wynn’s Wynn Resort

9. Q3. Effect on Atlantic City Casinos
Day trippers – because of location; less money to be made on hotel stay, etc.
Beach and boardwalk emphasized
2 major Native American casinos in Connecticut – with $1.8 billion in revenues
Mimic Las Vegas -- $2 billion makeover
Adding wings – Borgata’s makeover
Outdoor bars