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Posted by on Sep 29, 2013 in Blog, General Poker, Las Vegas | 13 comments

Closing Down Poker Rooms: What Happens When Bean Counters Run Casinos

 

M Casino

 

You’re looking at what used to be the poker room at the M Casino in Las Vegas.

Take a closer look.  This photo wasn’t taken at 3 am.  More like 3 pm during the weekend — prime time in the casino business.

Notice anything missing?  How about people?  There are none!

 

A few months ago, about a dozen poker tables were hauled away to make more room for more idiot slot machines.  Here’s a first-hand look at the result.

I’ve visited the M Casino multiple times since the poker room closed down.  This is pretty much the scene every time I’ve walked by the room.  Not a soul in the vicinity.

To be fair, the old poker room often had only a few games going at a time — sometimes more games during evenings and on weekends.  But this wasn’t a busy poker room by any stretch of the imagination.  However, the M Casino also ran a poker tournament series this summer which drew a nice turnout.  I have no idea what the daily drop was in the poker room nor do I know what it cost to operate (actually I can make a pretty good guess based on my experience).  But I’m willing to bet that the poker room brought in a hell of a lot more people than this depressing morgue of a slot pit.

I’m also willing to bet that those who came to play poker gambled here, as well.  They dined at restaurants.  Sometimes, they even brought friends and family along with them, no doubt who all spent money.  Now, those same poker players have presumably gone elsewhere.

The M Casino is big.  It’s nice and for the most part, very well run.  Yet, I’ve never seen it filled anywhere to near capacity.  So, what’s another 32 idiot machines gathering dust in an empty room where the poker room used to be going to accomplish?  This is like adding another cup of water to the soup.

Folks, when you read news stories about disappointing quarterly reports and casino management shakeups, here’s one reason why.

What are these corporate bean counters thinking and why does anyone listen to them?

TAG:  Nolan Dalla writings

READ: More articles on bad management decisions by casinos

13 Comments

  1. “Folks, when you read news stories about disappointing quarterly reports and casino management shakeups, here’s one reason why.
    What are these corporate bean counters thinking and why does anyone listen to them?”

    Poker rooms cost money to operate, often, and I suspect so in the M’s case, more money than they’re bringing in, not including amortizing the floor space. I most cases I’d wager that even if you include the extra money these folks and their wives drop in the casino, the poker room runs in the red for the typical Las Vegas room. I don’t like to see poker rooms close, but the truth of the matter is that we have more rooms and a lot more tables in Las Vegas than we need given the current demand. The poker economy will be better if a few of the less successful rooms close down and we consolidate those people in a few larger rooms. It will be easier to get games started, keep them going, and we can spread a wider variety of games.

    By the way, my understanding is that folks at the M will still be doing their summer tournament series drawing folks from Penn Gaming properties around the country, they’ll just be doing it with portable tables and a temporary staff. Surely, you’re not going to say that casinos shouldn’t run summer poker tournaments using temporary space and staff, right?

    It’s fair to lament the decline in Las Vegas casino poker over the last 6 or 7 years, but it looks to me that the “bean counters” were doing their jobs when they closed down the M poker room. If you’ve got some analysis that says otherwise, rather than just slighting the numbers folks who occasionally do know what they’re doing while providing no evidence to the contrary, I’d like to see a blog posting on that. Oh, and do a quick back-of-the-envelope calculation of the costs and revenues you’d expect that relatively large poker room with very few tables in use, then compare that against the numbers that show up in Penn Gaming’s 10-Q, then let me know how many decimal places to the right of the last one listed you’d have to go before the M’s poker room revenues showed up. I can’t think of a case where the opening or closing of a poker room in Las Vegas providing a significant impact on the success of a poker room. I can think of some cases where a closing would negatively impact a casino, but none where a room closing actually did. I’d be interested in hearing from folks who believe otherwise, as long as they’re not citing a case where the casino was already in a death spiral and they happened to close their poker room on the way down.

    • Haven’t you heard?! The recession is over. It ended in 2007. Obama has everything under control. The casinos must be stupid. They are closing poker rooms that are obviously making many thousands of dollars. They need to work with the numbers until they show they are making a a real profit and everything is great. These casino people just don’t know how to do their accounting. Perhaps someone from the white house can show them how to do their accounting properly. I’m just thankful Ronald Reagan not president. Can you imagine how screwed up everything would be. Remember how good we had it with Jimmy Carter and then Reagan came along and everything went downhill. I am so thankful Obama is there. On top of all that we are getting FREE HEALTH INSURANCE.

    • Here Here. I think you got this one wrong Nolan.

  2. @Nolan

    I myself do not have the luxury of knowing what the costs are to maintain a poker room, but I have played in many rooms in North America and one commonality is Bodies.

    Sure the former M Poker Room is now occupied by slot machines, but those machine have $0 cost other than the electricity they are using, and of course the units themselves amortized over time.

    A poker room requires humans, and several of them from a room manager, floor attendants, to dealers. And these humans are paid salaries, and most likely benefits as they are in my best guess part of a union.

    What looks so simple on the outside is not often the case on the inside. A poker room is like a restaurant and every square foot has a set expense and a projected profit. If you cannot achieve the profit, you have to make change.

    I personally think M did the right thing….

  3. Hi Nolan,

    I was recently in Las Vegas on business and I did notice one very important element that is generally overlooked by a lot of players and operators alike.

    The amount of rake that players pay in Las Vegas is quite possibly the lowest on the planet. Can you imagine if casinos were charging $10 @ 10% + a $10 time charge per hour? Well that’s what you pay in this part of the world, and it’s standard. If player’s don’t like it then they can go play elsewhere. There are still plenty of games, and plenty of players willing to pay and play at these rates by the way.

    If poker rooms in Las Vegas are to indeed thrive, then I believe a lot more of the money that is circulating in the poker economy needs to come back to the operators. In general, Poker players have always been the most educated of all casino patrons, and as such very rarely play anything outside of the poker pit. Sure, they eat, they might see a show, but you certainly won’t see them giving up pit or slot play.

    On my last trip I recently played $1-$2 PLO at the Venetian. The game started off as a must move table and I managed to get two of the guys who sat down convinced that we should start short. We played short for a good part of an hour, getting the game up to 5 handed and then when I finally left the table about an 2 hours later it was full. In that period where the game was short, I was the ONLY person tipping the dealer. This type of mentality of shaving every single penny that is won or lost at the tables is a dying mentality for poker room survival in Las Vegas. To add to this, I almost died when I saw that the cap on this table was only $4. FOUR DOLLARS! Consider that playing the same game in my market would be 2.5x more per pot, and it’s not hard to see why poker room in Las Vegas are closing.

    The numbers simply don’t stack up Nolan and until the regular poker players there that grind away a living at the $1-2 and $2-$5 tables understand this, then there is no chance we will see an increase in the poker rooms in Vegas anytime soon.

    I feel for the players and staff at the M Resort, but as was said by Carl in his post above, these rooms cost money, and if they are not making it, the it is the job of the bean counters to simply do what needs to be done.

    Keep up the great writing, I enjoy your articles immensely.

    HUX

  4. I am truly shocked that there are people that are pro bean counter. I get the guy that somehow blames Obama (he’s wrong but I understand). I get the guy that blames women (he is also wrong — poker needs more women not fewer). However, I do not understand the people that are coming out in favor of the bean counters. Do you seriously think that removing a elegant poker room to make way for slot machines builds a better casino? I think the point was that bean counters make decisions based solely on quantity and not quality. What does your dream casino look like?

  5. I am certainly not a bean counter favorite, but I am a business executive that understands the difference between profit and loss, which is the basis these casinos open their doors.

    Their goal is to provide a facility to its patrons that not only will be one that is enjoyed, but one that must remain in the black, and not in the red.

    Decor does not make money, it costs money, and when decor such as found in a nice poker room begins to lose money, change must occur.

    I agree with previous comments that there is an abundance of rooms in Vegas just getting by or losing money, and having more rooms does not equate to being the right choice. Less rooms = better environment for all poker players, more games, and a more competitive environment where fewer rooms can compete for our money.

    Smart move ” M “!

    Sorry if this upsets other, but I as well play an abundance of poker and walking into rooms that are half to 3/4 dead do not get my blood pumping….

  6. I stayed at the M for a couple of days at the end of July. During the (weekend) day, there was one table going and it had a couple of empty seats. At night the room was completely empty.

    How long should you keep a poker room open if there aren’t any customers?

  7. Funny how the business driving Vegas is either at the low or high end and the middle has no place to stand. It is either slot machines or baccarat. The demise of online poker really did it in for poker.

  8. Those look like tournament slot machines so if there is no tournament going on of course there is nobody there.

  9. I heard recently that Caesars is closing their poker room after the wsop this year! My favorite poker room in vegas! Damnit! I guess Pure needs more floor space! Pure shit!

  10. It was great meeting you at FARGO. Reading up on some old articles.

    I for one will pledge not to play in a casino that has no poker room. Why would I if my main game in a casino isn’t spread? If millions of poker players took this pledge then the bean counters will notice. Spread poker or die.

    So the M has no poker room, has bad customer service at the sports book, and is at the extreme south end of the strip. Why is this place still open?

    In the words of bar rescue’s Jon Taffer, “SHUT IT DOWN!”

  11. Pro Bean Counter Comments are foolhady. Bean COUNTERS never take qualitative factors into consideration and are forever at odds with sales marketing and operations. Who cares if you make 0.0000001% more per quarter when your leaving sour grapes behind and visitors aren’t coming back!

    Case and point. A hotel CEO overrulled his Bean COUNTERS and offered FREE fresh baked cookies to gusets. The Bean COUNTERS screamed no! Cookies cost money! Electricity costs money! Labor costs money! Time is money!

    Did you know the customers loved it so much that small hotel franchise grew to one of the top 5 hotels in the country with the #1 repeat customer rate ?????

    But how could this be when fresh baked cookies cost money !

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