Monthly Archives: May 2022

Online Casinos With Bonuses and Free Money – The User’s Guide

The Proper Care & Feeding of the Golden Goose

Under the new paradigm of declining economic conditions across a broad spectrum of consumer spending, casinos face a unique challenge in addressing how they both maintain profitability while also remaining competitive. These factors are further complicated within the commercial gaming sector with increasing tax rates, and within the Indian gaming sector by self imposed contributions to tribal general funds, and/or per capita distributions, in addition to a growing trend in state imposed fees.

Determining how much to “render unto Caesar,” while reserving the requisite funds to maintain market share, grow market penetration and improve profitability, is a daunting task that must be well planned and executed.

It is within this context and the author’s perspective that includes time and grade hands-on experience in the development and management of these types of investments, that this article relates ways in which to plan and prioritize a casino reinvestment strategy.

Cooked Goose

Although it would seem axiomatic not to cook the goose that lays the golden eggs, it is amazing how little thought is oft times given to its on-going proper care and feeding. With the advent of a new casino, developers/tribal councils, investors & financiers are rightfully anxious to reap the rewards and there is a tendency not to allocate a sufficient amount of the profits towards asset maintenance & enhancement. Thereby begging the question of just how much of the profits should be allocated to reinvestment, and towards what goals.

Inasmuch as each project has its own particular set of circumstances, there are no hard and fast rules. For the most part, many of the major commercial casino operators do not distribute net profits as dividends to their stockholders, but rather reinvest them in improvements to their existing venues while also seeking new locations. Some of these programs are also funded through additional debt instruments and/or equity stock offerings. The lowered tax rates on corporate dividends will likely shift the emphasis of these financing methods, while still maintaining the core business prudence of on-going reinvestment.
Profit Allocation

As a group, and prior to the current economic conditions, the publicly held companies had a net profit ratio (earnings before income taxes & depreciation) that averages 25% of income after deduction of the gross revenue taxes and interest payments. On average, almost two thirds of the remaining profits are utilized for reinvestment and asset replacement.

Casino operations in low gross gaming tax rate jurisdictions are more readily able to reinvest in their properties, thereby further enhancing revenues that will eventually benefit the tax base. New Jersey is a good example, as it mandates certain reinvestment allocations, as a revenue stimulant. Other states, such as Illinois and Indiana with higher effective rates, run the risk of reducing reinvestment that may eventually erode the ability of the casinos to grow market demand penetrations, especially as neighboring states become more competitive. Moreover, effective management can generate higher available profit for reinvestment, stemming from both efficient operations and favorable borrowing & equity offerings.

How a casino enterprise decides to allocate its casino profits is a critical element in determining its long-term viability, and should be an integral aspect of the initial development strategy. While short term loan amortization/debt prepayment programs may at first seem desirable so as to quickly come out from under the obligation, they can also sharply reduce the ability to reinvest/expand on a timely basis. This is also true for any profit distribution, whether to investors or in the case of Indian gaming projects, distributions to a tribe’s general fund for infrastructure/per capita payments.

Moreover, many lenders make the mistake of requiring excessive debt service reserves and place restrictions on reinvestment or further leverage which can seriously limit a given project’s ability to maintain its competitiveness and/or meet available opportunities.

Whereas we are not advocating that all profits be plowed-back into the operation, we are encouraging the consideration of an allocation program that takes into account the “real” costs of maintaining the asset and maximizing its impact.

Establishing Priorities

There are three essential areas of capital allocation that should be considered, as shown below and in order of priority.

  1. Maintenance and Replacement
    2. Cost Savings
    3. Revenue Enhancement/Growth

The first two priorities are easy enough to appreciate, in that they have a direct affect on maintaining market positioning and improving profitability, whereas, the third is somewhat problematical in that it has more of an indirect affect that requires an understanding of the market dynamics and greater investment risk. All aspects that are herewith further discussed.

Maintenance & Replacement

Maintenance & Replacement provisions should be a regular function of the casino’s annual budget, which represents a fixed reserve based on the projected replacement costs of furniture, fixture, equipment, building, systems and landscaping. Too often however we see annual wish lists that bear no relationship to the actual wear & tear of these items. It is therefore important to actually schedule the replacement cycle, allocating funds that do not necessarily have to actually be incurred in the year of accrual. During a start-up period it may not seem necessary to spend any money on replacement of brand new assets, however by accruing amounts to be reserved for their eventual recycling will avoid having to scurry for the funds when they are most needed.

One area of special consideration is slot machines, whose replacement cycle has been shortening of late, as newer games & technologies are developing at a much higher rate, and as the competition dictates.

Cost Savings

Investment in cost savings programs & systems are, by their very nature and if adequately researched a less risky use of profit allocation funding then almost any other investment. These items can often take the form of new energy saving systems, labor saving products, more efficient purchasing intermediation, and interest reductions.

These items have their caveats, one of which is to thoroughly analyze their touted savings against your own particular application, as often times the product claims are exaggerated. Lease buy-outs and long term debt prepayments can sometimes be advantageous, especially when the obligations were entered into during the development stage when equity funds may have been limited. In these cases it is important to look at this strategy’s net effect on the bottom line, in comparison with alternative uses of the monies for revenue enhancing/growth investments.

One recent trend is the growing popularity of cash-less slot systems, which not only provide labor savings for fills, counts and hand-pays, but also serve as an aid to patrons who do not like to lug around those cumbersome coin buckets, while also encouraging multiple game usage.
Revenue Enhancing & Growth

Leveraging is the key catalyst of any revenue enhancing/growth related investment. It includes the following:

o Patronage Base
o Available Funds
o Lands
o Marketing Clout
o Management Experience

The principal is to leverage the use of the available asset towards achieving higher revenues & profitability. Typical examples include increasing average patronage base spending and widening the effective trading radius, by offering additional products/services, such as retail stores, entertainment alternatives, recreational/leisure amenities, overnight accommodations, more restaurant choices, and of course, expanded gaming.

Master Planning

Anticipation of potential growth and expansion should be fully integrated into the project’s initial master planning so as it assure cohesive integration of the possible elements in a phased-in program, while also allowing for the least amount of operational interruption. Unfortunately, it’s not always possible to anticipate market changes, so expansion alternatives must be carefully considered.

The Big Picture

Before embarking on any type of expansion and/or enhancement program we strongly recommend first stepping back and assessing the property’s present positioning relative to the market and competitive environment. As we have observed in numerous gaming jurisdictions around the country, often casino ventures that have been operating “fat and happy” for a few years, find themselves in a zero-growth period. Sometimes this is due to competition stemming from either/both new local area casinos or regional venues that have the affect of reducing patronage from peripheral area markets. Additionally, the current customer base may become bored with their experience and are seeking greener pastures. The historical growth of the Las Vegas strip is testament to the success of continually  메이저사이트  “reinventing” oneself.

Our approach to these market studies is initially focused on determining the degree to which the current facility is penetrating the potential market and in relationship to any competitive market shares. Typically, this represents an analysis of the current patronage base in terms of information gleaned from the player tracking data base, and mailing lists, coupled with day-part, daily, weekly, monthly and seasonal revenue trends.

This data is then interfaced with an assessment of the overall market potential to indicate the extent to which certain market segments are utilizing the facility and the needs it is fulfilling. More importantly however, is that this type of analysis will indicate those market segments that are not utilizing the facility more fully, and why.

 

Online Casinos – How to Beat the House Advantage

Live dealer games are one of the more interesting and noted trends which have been happening in the last few years in the online casino industry. Live casino games were initially developed about 10 years ago as a niche type game primarily targeting the Asian markets, who expressed a demand for such a type of games. In the time that has passed since then, live casino games have changed, developed and evolved quite a lot, making them as popular, exciting and lucrative in the Western world, especially in the UK and Europe.

Live dealer casino games are in fact online casino games where the player is actually engaging in a real live game hosted either at a real B&M casino or at a studio. The cards are dealt by a real live dealer who has been especially trained to host such games and players can see exactly what is happening in the game and enjoy as much as possible the excitement and action similar to what they would experience at a bricks and mortar casino.

In the early days of the internet, many land based casino players, eager to try out the new medium of gambling online, didn’t do so for two main reasons. The first being that they did not feel comfortable with providing their credit card details to some online entity they could not see or touch. The second was that players generally didn’t trust the random number generators (RNG), which are the “engine” behind all online casinos. Many people believed that the RNG was fixed and in the favor of the online casino, thus making the chances of you losing all your money almost certain. At a land based casino, players could see the cards and the dealers and feel the action on the casino floor. The fact that they were dealing with real live people made the whole business believable. Having a machine deal the cards instead of a person was unthinkable in those days! This forced the online casino software providers to come up with a solution; live dealer games where the player could see the dealer and the action at the casino, just from the comfort of his own home while playing at an online casino.

The first live dealer casino games were rather limited and didn’t quite offer the player experience the online casino software companies hoped for, especially due to technical and technological reasons. Video streaming was extremely slow due to narrow the narrow band width that existed in those days and the result on the players’ end was not the excitement and glamour on the real Vegas casino floors. Due to this, live casino games did not become as popular as the developers and casino operators hoped for. Luckily, developments in bandwidth and video streaming have contributed largely to the ability of software providers to improve and enhance live casino games closing the gap between the dream and vision to reality.

Most online casinos don’t develop their games in-house and purchase a license from a company that develops the software for online casinos. The leading software developers that offer live casino games are Playtech, Microgaming and Evolution Gaming and they generally operate them for their licensees, either from a TV studio or from a real land based casino. 안전놀이터 This means that you will probably see the same live casino games at different online casinos. The reason for this is that the operating costs are higher than the standard RNG powered games. The result is that this is the only business model so far that has proven itself profitable to both the software developers and the online casino operators.

Online casinos generally offer a narrow selection of live dealer games, namely roulette, blackjack, baccarat, sic bo and casino hold’em. Roulette and blackjack are the most popular by far.

When getting started with live dealer casino games you are required to choose the table and dealer you prefer. Dealers are usually very good looking women; however there are also a few handsome men around to keep the ladies coming back for more. The live dealer manages the game, just like at a land based casino and they are all extremely well trained and knowledgeable as they need to deal with many things at the same time. If you have the sound on the computer turned on you will be able to hear all the ongoings in the studio and even the live dealer wishing you luck.

Almost all live dealer casinos are regulated and are based in the UK, Ireland and Eastern Europe. The hands dealt to players are random and the game is super fair just like at a land based casino and you can see everything with your eyes.

Bonus and promotion wise, there are rarely any offered by online casinos, however the regular bonuses and promos apply to the live casino games, just like any other.

[http://www.CasinoPromoGuide.com] is an online casino portal, started by a group of online casino industry insiders, led by Ron M. Faulkner, the writer of this article. Its mission statement is to help online casino players get updated, real time information regarding bonuses and promotions offered at a select list of online casinos which have been carefully screened and reviewed as being honest, offer a high quality gaming experience and provide the secure and trustworthy environment all online casino players need and deserve. Visit CasinoPromoGuide.com now and see how and where you can stretch your gambling budget just that little bit more!