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Casino Industry Essay Sample

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Identification

Casino Industry is the biggest commercial gaming market within United States. It continues to grow and develop its popularity because of the new creations of casino destinations as well as the expansion of casino locales. Banked games are usually the characteristics of a casino. Banked games are actually those that the house banks the game and acts as a participant. This means that the casino has a major stake precisely in who wins. Commercial casino gaming has a variety of forms. Some of the most recognizable consists of Las Vegas-style casinos. Other venues of commercial gaming include dockside riverboats, excursion (mobile), racetrack casinos and card rooms.

There is a great complexity with the American casino industry competitors.  Competition involves individual casinos, virtual casinos and the industry leaders that are the land casinos.  This competitive structure complexity creates concentrated competition demanding a need for perfect and creative marketing. Sustaining the growth of these casinos is not easy because it faces challenges of attracting consumers with the application of effective marketing.  The use of place, product, price and promotion, has worked continually in the creation of the mass customization theme. There are often many sources of threats for the casinos and they coincide with the opportunities.  The governments, economy, and technology are the three major examples of such sources.

Competition has been high in the industry within states. However, even with the high competition, of the $29 billion of county’s winnings from the casinos, 45% came from Atlantic City ($4.2 billion) and Nevada ($8.9 billion). Las Vegas is the most profitable because of the many industries within the city and the extended area of gambling. By 1999, Nevada reported $8.9 billion of revenue while in Atlantic City reported revealed $4.2 billion of the revenues.

The figure below shows the gambling phenomenon and the trend casino industries are taking in the past few years in terms of accumulation revenue in the state of Indiana.

The commercial casino industry brings in a diversity proponent in the workplace. This is through the internal hiring as well as human resources policies. It also has an impact in contracting and purchasing practices. The success of the casino industry’s diversity efforts is evaluated through two reports done by the price water house coopers. They include Employment and spend Diversity Snapshot 2008. Some highlights from the reports show that:

• In 2007, casino industry had majority of employees being Hispanic, Black, and Asian workers. The number exceeded the U.S. workforce. Overall, casinos employed minority groups 20.6 percent more than the national U.S. citizens (Sampson, 2008).

• Casinos employed minorities in greater numbers than other businesses for instance, recreation and accommodation, entertainment, and food services sectors. They also employed minority officials, professionals, managers and technicians than any other businesses (Borg, 1990)

• Overall, casinos had a total purchase of $631 million in services and products from diverse vendors in the year 2007. This is 13.2 percent of amount of eligible commodity spend. This percentage is above national standards and is greater than the other industries collectively (Thalheimer, 2004).

Because of the strong criticism and the bad picture portrayed from many sources about the casino industry. There is more to ponder on and deliberate especially with the rising number of casinos and the huge development in the industry. This case analysis is a presentation of the following issues. These issues recently arose related to the Casino industry:

First, the issue of legalization has always been on the limelight. It is not clear whether the casino industry can be legalized fully and if so why. This stands on the path of the development of the industry and requires a fast solution to see off the success of the industry.

Secondly, the impact of the casino industry economically and the prospect of developing further has had a controversial issue. It is in no doubt that, a boost of the economy comes from the revenue and taxes from these casinos. The future of the casino industry is also a controversial issue. The country is in doubt of what holds for the casino industry in future. It is in doubt how the market industry sustains the practice for the future and what has in play.

Analysis and Evaluation

An analysis of the legalization of casino industry reveals that many states in America have legalized the practice. A survey conducted by University of Chicago’s Opinion Research Center (NORC) reported that states with legalized casino industry employ state regulating agencies. These agencies enforce a number of rules in financial disclosure on casinos with an aim of ensuring that these states receive earnings in form of taxes each year. The agencies direct, review and present audits of casino operators ensuring accurate measurement of the exact revenue numbers resulting in respective state tax dollars. The total cost of a single state regulation reaches over hundreds of million dollars in a year. Nevada Gaming Board alone has 450 individuals (Peter, 2005).

Most states pressure casinos to necessitate the adoption and adherence to a set of procedures designated by the state. These procedures are referred to as “Minimum Internal Control Standards (MICS).” The MICS focus on aspects of the casino industry, plus the conduct of practiced games, the handling and movement of cash and the record trail and accounting of all transactions (Stinson, 2005).

Casino company’s regulations take place at the federal level. Added to complying with laws for instance the Act of Americans with Disabilities and labor laws affecting all U.S. investments, casino companies have requirements to comply fully with regulations directed typically at financial institutions, for instance banks and other money-lending operations  (Jacques, 2008). This is due to the large amount of currency in transfer on the floor of the casino. The Bank Secrecy Act amendment took place in 1985 including casinos and many other cash-intensive investments in a list of institutions subject to these special requirements preventing any case of money laundering (Sampson, 2008). The Act directs that casinos should report withdrawal, deposits, exchange of currency and gambling tokens among other payments. The reports can only transacted in casinos if only the amount does not exceed $10,000. Other federal laws affecting commercial casinos exist in different ways. For instance, the riverboat casinos are a matter of laws associated to the federal Maritime laws of Transportation Security Act (Shaffer, 1997).

The impact of casino industry on the respective host communities has received many researches done on the subject over the past 15 years. It was even the topic of contention of a commission, the Gambling Impact Commission, back in the late 1990s. On the impact of the casino in the global market, there is lots of information to be precise. The commercial casino industry plays a major role in the U.S. entertainment industry as well as contributing to the U.S. economy (Stinson, 2005). It is important to the states and communities in the areas where it operates. It creates jobs and business opportunities actually for local businesses. It also provides direct gaming tax revenues stimulating the struggling economies and helping the surrounding communities grow. Few economic and other sectors in the U.S. requires quite a considerable capital expenditures, labor intensive and supportive of many outside vendors as well as suppliers like the case of the commercial casino industry (Thalheimer, 2004).

Thanks to these casino contributions, gaming industries are relatively stable business partners that play a key role in the landscape of the country’s economy. Internationally, U.S. commercial casinos have contributed in the building of the industry into a significant part of the economy globally by pursuing huge investment opportunities in as many emerging foreign markets as possible. While the industry expands in size, it also continues in evolving in scope to provide new entertainment offers and necessitating the adoption of technological innovations aimed at delivering the best customer experience (Garrett, 2004).

SWOT Analysis

This analysis offers conclusions about the casino industry in which the industry can exploit the opportunities and strengths and improve on their weaknesses and threats.

In the casino industry, there is a lot on the opportunities, threats strengths and weaknesses relating to the advancement of the industry in future.

TABLE 1 – SWOT Analysis of Casino Industry

Strengths

  • International growth into other countries for instance Asian markets
  • History (developed over many decades)
  • Acceptance by public officials

 

Weaknesses

  • Development of many illegal casinos
  • Insecurity and poor player tracking
  • Myths about casinos (illegal dealings, rich man’s place)

 

Opportunities

  • Extending growth to other markets for instance Africa
  • Metamorphosis into other investments for instance multi-component entertainment centers
  • New technologies developments for instance server-based games

 

Threats

  • Introduction of strict Gaming Control Board rules could usurp the running of the industry
  • The country’s economy could collapse if solely dependent on the casino industry

Recommendations

The casino industry is strong in United States and continues to grow over the years. The fact that it is employing thousands of residents means that it is a powerful tool in the economy. This means that it ought to sustain operations even under all circumstances.

The collapse of the casino would mean a major draw back in the country’s economy and many people rendered jobless. The conflict in the operation of casinos ought to get lasting solutions (Vander, 1999).

First, the security of the casino industry needs to be enhanced perfectly to bridge the trust in the industry and enhance its acceptance. Radio frequency identification (RFID) is perfectly a way through which the casinos can use in the improvement of the security and facilitating successful player tracking. This will increase the integrity rating of both dealers and the players and facilitate a smooth running of the industry (Shaffer, 1997).

Community engagement would be the ideal way of bringing in acceptance of the industry and whiling away any criticisms regarding the casino industry (O'Reilly, 2000). Commitment to environmental sustainability is best in leading in area of hospitality as well as entertainment businesses. The U.S. Green Building Council engagement would build trust in this industry and make a good chance of educating the people the positive side of the casino industry whiling away all myths concerning the industry (SALLAZ, 2002).

Responsible gambling campaigns are also a great way of making the industry safe and best for the parties involved. Creating a national spotlight regarding responsible gaming makes the industry run smoothly with few incidents reported concerning illegal acts in gambling or other activities building a better name for the industry and promoting acceptance. The implementation of AGA Code of Conduct in all casinos all over the United States is the way forward in this industry’s success (Stokowski, 1993).

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