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********** 2 part interview with Jim Kilby. Part 1 USA CASINO OPERATIONS by scott Cameron & part 2 is about International Casino Operations by Ian Sutton **********
University of Nevada Las Vegas Professor Jim Kilby began his career in the gaming industry in 1969 and has occupied various managerial positions including Floorman, Shift Manager, Casino Manager and Vice President of Casino Operations at the Tropicana Hotel, Las Vegas Hilton, Dunes and several major casinos in the Caribbean. Since joining the faculty at UNLV in 1986, Mr. Kilby has worked as a gaming consultant for many of the largest casino operations in the United States, South Africa, Australia and Malaysia. His list of publications include: “Using Table Games Hold as a Management Tool”, “Creating an Objective Player Rating System” and “Estimating Revenue Through Bet Criteria”. Jim teaches Casino courses. He co-authored the text, Casino Operations Management
PART ONE : USA CASINO OPERATIONS:
Scott Cameron : Professor Kilby, thank you for taking the time to do this. We will attempt to limit our bitching and complaining to a minimum In your opinion, what would you say is the greatest guest service challenge facing today’s casino operations managers?
Scott, we call it Management by line item. Every department is trying to generate as much profit as possible. In virtually all departments, the largest expense line item is payroll. Therefore, payroll is always vulnerable to cuts. The mistake we always make is assuming that, regardless of what we do to expenses, the top line (or revenue line) will remain unchanged. Unfortunately this isn’t so. The expense lines drive the revenue. When we make cuts in personnel, service suffers. The challenge facing management is one of commitment. That is, management must be committed to providing the best service possible and believing that with service comes the highest profits. Sadly, it is near impossible to quantify the effect of service on the bottom line.
Some say craps is a dying game or craps does not pull its weight. I agree with those who think that any staple offered up in a casino with correct internal marketing will undoubtedly pull its weight. However, I realize that for the average non-casino background manager (or accountant) learning the ins and outs of the game of craps can be daunting (and possibly beneath them). Much easier just to market slots and then point out the financial weak points of the dice game as it continues its inevitable decline. Agree? Is it not a question of marketing?
Yes, we can market dice and increase interest. However, our job as manager is to maximize profit. You could make the same marketing argument with the games Faro, Fan Tan, Red Dog, and Klondyke to name a few.
These games have disappeared yet if we put them on the floor today we will have players. And the dealers could argue that it is management’s fault for the lack of interest. But you, as manager, what games are you going to remove to make room? If you travel throughout the world you will find virtually no dice games outside the U.S. A few years ago, the late Ned Day, a columnist with the Review-Journal said that to increase the play on dice we needed a 3rd world war. His article addressed the demise of dice and he said that most of the players in the 40s, 50s, and 60s learned to play craps in the military. I think that a world war is a little extreme. I am a dice fan.
There is no more an exciting game than dice. However, the demographics of our customers are changing and we have to change with them. The future of the casino is in slots. I’m sure I will offend many with this comment but it is the truth. Today’s customers were raised on electronic games and the real innovations in gaming are in the electronic versions. I am not going to be silly enough to say, “We must keep dice at all costs.” The customer decides what they want to play and they are slowly losing interest in dice.
As far as pricing, we offer the best dice game ever. We offer between 3/4/5 odds and 100x odds. When I started in 1969, most of the casinos offered only single odds. We now charge the commission on buy bets only when the player wins the bet versus 100% of the time and our prop box and field bets offer the best payouts. So what do you propose we do to market the game? We have dice instructions and bill boards marketing dice throughout the valley yet dice play is decreasing. Why? Because every product has a life cycle: Introduction, Growth, Maturity, and Decline. Dice is in the decline stage.
The elimination of the box supervisors. A casino provides gaming services through undocumented transactions. Due to the nature of these transactions, the casino has a responsibility to both it’s employees and guests to provide adequate supervision. If you look at the budget for any casino company, you won’t find a figure for potential losses to theft or error will they Mr Kilby? Some argue that such theft / error will not cost the casino as much as salaries and benefits that were paid to those guys?
The state of Nevada lets the operator make the business decisions. I do not agree with the elimination of boxmen but it is an easy expense to identify and, if you are managing by line item, eliminate. One can never quantify the true value of a boxman. This is a case of common sense.
I think everyone agrees that when employees are happy with their work environment, customer service is at a premium. Many dealers are not very happy. They abide by the “dummy up and deal” mentality. The biggest complaint they seem to have are working in casinos that “sweat the money” You’re a numbers guy, what’s up?
Ridiculous…. ridiculous. Sweating accomplishes nothing desirable. When one sees the casino advantage of a game, for instance roulette, they will see 5.26%. There is no 5.26% with an ” * ” saying unless we only allow the luckiest dealers to deal.
No, we win 5.26% period. We can control whether the customer visits the property with our marketing. We can influence how long the customer plays with customer service and making him feel welcome. We CANNOT control whether he wins or loses. In fact, when we “sweat” we are actually making the player feel uncomfortable and will hasten his departure. I broke-in at the Golden Gate and then worked at the Silver Slipper. If you lost 3 hands in a row you were relieved before you had a chance to deal the 4th hand (it wasn’t really this bad but it seemed that way).
I tell my students: be happy when the player wins and be sad when the player loses because you had absolutely nothing to do with it. I also tell my students “we are circle managers.” Our job is to get the money to the circle. What happens once the money is in the circle is in the hands of the God of luck.
I could go on and on about sweating because it is such a ridiculous practice. If we buy into unlucky dealers maybe we are misdirected. Maybe we have unlucky lookers or maybe unlucky managers of the lookers. I have a memo from the G.M. at the Maxim that was sent to his staff. The subject was “stoppers.” The G.M. went on to say that at the beginning of each shift, the shift manager should identify his lucky dealers (the G.M. called them stoppers). If a player started winning they were to bring in the stoppers. The memo also says that when a player starts winning we “must do something.” Unfortunately this Neanderthal mentality is still alive and well in casino
operations.
What IS the most important function of a casino floor supervisor? Many floorpeople seeking employment are always asked this question. What answer are they looking for if they can only choose between game protection or customer service?
Scott, If you were to ask a floorman what is his “job”, he would answer, “game protection.” That might have been the case 30 years ago, but not today. The most important function of the floorman is a marketing function. For a table game department to be successful, they must have an accurate player rating system. The ratings are generated by the floorman and rating the players is the most important function of today’s supervisor. Needless to say this isn’t the only function, but if you were to rank the functions by importance, player rating would be number one.
When it comes time for a casino to seek a floor supervisor, in your opinion, is it best to promote from within where a dealer is familiar with policy and procedures or best to hire an experienced floor supervisor from the outside?
I think you should always promote from within. Hiring from the outside often destroys moral which reflects on customer service. Virtually all my students who are employed in the industry hope to advance into management. They believe they can work their way up within the organization. To advance within a casino, management must provide a “vehicle for advancement.” That is, employees must know what it takes to advance. This “vehicle” must be what management believes is important to the organization.
Some casinos might believe that a stable work force is most important. In this situation, they will promote the employee with the most seniority. It signals to the other employees that, to be promoted, you need to stay at the company and your “turn” will eventually come. Other casinos may believe that the most ambitious employees should be promoted. Regardless of the “vehicle” chosen by management, they must be consistent. In other words, in one case promoting the most senior employee while in the next case promoting the employee that plays golf with the casino manager sends the wrong signal to the employee; they don’t know how to advance. In either case, promoting from within is the reward for doing what management sees as important.
I agree but what do we tell those who are currently employed as a table games supervisor? You better keep that job because you’ll more than likely start over as a dealer should you find yourself unemployed? Many floormen haven’t dealt for a number of years and may not have the necessary skills to attain a good dealing job in a decent house in order to “start over” besides, why should they?
Unfortunately there is lateral movement at the top and at the bottom but not much in the middle. Dealers have opportunities at other properties and so do VPs but those in the middle fall victim to the “promote from within” practice. During the 1990s we had several new casino openings and with those openings came opportunity for advancement. However, the only new property of any size on the horizon is Wynn Resort. In the absence of new openings, it is important for a dealer to choose the right company with the opportunity for advancement.
Years ago, when Bill Harrah was alive, Harrah’s had a policy of not hiring anyone who had any experience. He wanted all break-ins. His attitude was that if you were going to learn any bad habits you would at least learn them at Harrah’s and not bring them along from a previous employer. Those same break-ins knew they could advance to the top at Harrah’s and many did.
There is no easy “what do we tell those” answer. The casino is going to do what is best for itself and that means promoting from within. Consequently don’t expect much opportunity until new properties open. Back to my “vehicle for advancement.” In order to get employees to do what is desirable, they must be rewarded. This reward comes in the form of promotion. Therefore, management must promote from within which means little opportunity to those outside the organization.
Do you favor dealers getting hired with “juice” or do you feel that it is a question of ethics?
When I broke-in during the late 60s, the only way you could get a strip job was to have juice. I think it is o.k. for the “juice” to help you get an interview but I believe you should be hired on your merits and experience. I have helped many of my students get interviews and many were later hired. In every case, I expect those I have helped to be the best employees and not expect their “juice” to help them whatsoever once they have gotten hired.
Table for table tokes. Dealers able to keep their own gratuities. This was a “dead horse” issue in Las Vegas, that is until a few west coast Indian casinos have revived this platform recently. Your thoughts?
I have no idea why they would go down that road. I would venture to say that it won’t take long for them to revert to the pooled system. I would guess that the big operations, i.e., Foxwoods and Mohican Sun pool their tips;
Las Vegas experienced operators set them up.
I have never worked table-for-table. When I started in 1969, all the casinos forced the dealers to pool their tokes. Personally, I think allowing the dealers to go table-for-table would be a disaster for management. How could you possibly schedule fairly? How are you going to let everyone have their fair shot at the higher minimum games? What is the dealer going to do if the player is a “stiff?” The dealer may say they are going to be extra nice but, in reality, they are either going to be rude or they are going to ask the player to tip.
In the mid 80s, I worked at the Tropicana. The Trop allowed the dice dealers to go table for table. On one occasion, a secretary in casino marketing’s father was hustled at the dice game and I was asked by management to investigate. The girl’s father was the only player at the game. He had lost several hundred the night before. While at the game he was up a few hundred but still loser for the trip. One of the base dealers asked the father “how about a tip for the boys.” He said he would tip when he was ready. Later the other base dealer asked the first dealer out loud “what did he say?”, the dealer replied “he said he would tip when he was ready.” Keep in mind this was done directly in front of the player and was done so simply to embarrass the player. Needless to say he was pissed. I spoke to the boxman; he didn’t hear anything. Why didn’t the boxman hear anything?
Because he was being what we call “pieced off” meaning the dealers would give him part of their tokes if he turned his head. I would never argue in favor of table-for-table. Also, a common way dice dealers steal tips is to advise an inexperienced player. Example, during the course of play, the dealer may ask the player “how about making a 2-way eleven.” The player asks, “what does that mean?” The dealer replies “your are betting the next throw is an eleven.” The dealer fails to say the “2-way” part means half for the dealers and half for the player.
It is argued that to be friendly, dealers must be paid via tipping. I argue that you should hire friendly dealers. I was raised in Oklahoma. Part of my rearing was to be friendly to everyone. I practice that training to this day.
The casinos started really pooling tips I guess around 1980. By 1990, dealers going for their own was just about over. What happened Professor Kilby? Why do most Las Vegas casino dealers pool their tokes? Why are they (we) the only hotel casino employee that receive gratuities from customers forced to pool the tips?
I think they pooled their tips long before 1980. As I said, in 1969 it was institutionalized in Las Vegas. As a dealer, I would prefer to work in a place that pools rather than table-for-table. Pooling is the fairest approach for all dealers. Dealers were forced to pool because of the problems mentioned in the previous question. Other departments force the pooling of tips. For instance, the valets pool tips. I wasn’t around when pooling started but I’m sure it was because of abuses by employees. As they say “necessity is the mother of invention.” Management found a need to force pooling.
We keep hearing about “The good old days” how much better was the casino business was back 20-30 years ago. What is your take on that argument especially the relationship to customer service?
I keep hearing about “the good old days.” I believe things are much better today in respect to job security, job opportunity, and customer service. When I started in 1969, you only needed to be a good “clerk” to get hired. We never heard the term customer service. I remember security actually throwing people out of the casino back in the “good old days.” We had more demand than supply so it really didn’t matter how you treated the customer.
Back in “the good old days” we had a small industry with relatively few customers. Today gaming is huge. Consequently, we have customers that come to Las Vegas once every 2 years and we don’t have the opportunity to get to know them. I believe this customer service buzz has been beaten to death. I think we should just adopt the golden rule “do unto others as you would have them do unto you.”
Boy, you sure got that right. Thank you again professor Kilby. We appreciate your time and effort. Are you ready to face the wolves?
I will answer any question I can. Please encourage them to ask whatever they like.
MORE QUESTIONS
“B” Dealer Reno, NV. What is the Hard Rock (LV) doing right that enables those dealers to have the opportunity to make so much in a pooled tokes system? Or should I say what are we doing wrong? Do they have a better customer service program or is it better marketing?
I really think it is a combination of the high level of action and the demographics of the players. The players are younger, on average, and are probably more generous as well. Combined with a relatively small pit with fewer ways to cut and you have a high toke job.
FR Stockholm, Sweden. Low morale breeds complacency in customer service, policy and procedures. To allow ourselves to become complacent in our jobs we are doing a disservice. We are, after all, responsible for the assets of the corporation as well as the safety and security fellow employees and our patrons. In your travels have you ever found a successful casino employee motivation program out there somewhere that comes to mind that senior casino executives may want to investigate when it comes to motivating pit staff?
I have not personally found any exceptional motivation program. Personally I believe motivation must start at the top. Each level from V.P. down must realize it is their responsibility to motivate those under their direct management. Money is not a motivator. Studies have consistently shown that the absence of money dissatisfies while the presence does not satisfy. As I said earlier, management must provide a “vehicle for advancement” and must adhere to this means of betterment. Those choosing a career in casino operations want to know how to advance and it is up to management to provide the direction. I believe this is the best tool to motivate.
Another question that comes to mind is the “Anne” post in the same thread where she suggests renaming a number of the wagers offered. Not that I agree with some of her suggestions but COULD a casino rename some of the wagering options on a craps table?
She has an interesting take on the game. Might not hurt to change the names. I’m sure the names evolved through the decades. Maybe changing the names would help one casino differentiate the product from its competitors.
FT Dealer Atlantic City, NJ. Should a proficient multi-game [craps/roulette] dealer deserve more base salary than those who only deal one or two card games?
Theoretically yes. You have more skills so you should earn more. However, as long as there are unemployed multiple game dealers on the street don’t expect more pay. It is a buyer’s market. You are receiving a benefit in a way; that is, it should be easier for you to get a job.
DY ? Las Vegas, NV. A friend of mine claims the casino he works at the shift managers have staff look at some of the surveillance tapes on what to watch out for. He feels they all learn good information that helps in game protection and guest services. They looked at cheating scams, employee theft and they also looked at situations where one guest would steal from another on the game. I brought this up at one of our staff meetings and our Casino Manager said: “Not a chance” – “The liability is not worth the risk and asked that the subject not come up anymore.” What are your feelings about this?
I don’t understand that comment. Part of our job in operations is to minimize theft. I would think the more we know the easier that task would be. There is no better way to learn than to see actual video of the act. I have taught game protection in the past. I would be lost without actual video.
SWC Table games supervisor Las Vegas, NV . The challenge is when dealers and floor staff see what they do as “just a job,” the level of service and commitment is questionable. If the industry had more people that looked at table games as a career and not a rest stop, management would have less to stress about and guests would get more attention. True?
True. I always felt that when you hire, or promote, you should be hiring/promoting for the next position. That is, if you do not think the dealer has the potential to be a good floorman, you shouldn’t hire that person as a dealer. In the real world it is extremely difficult to provide a career opportunity for someone who wants to be V.P. of Casino Operations. It is like a big funnel with a tiny hole. Everyone can’t squeeze through the hole. What I mean is that you may not live long enough to become a V.P. because there are so many at the bottom and so few at the top.
“Dicegod” Lav Vegas, NV. We have two shift managers that know very little about craps. Surprisingly, they even admit it. Both are college grads in marketing. I know you are a professor at UNLV. Do you advise your students to learn to deal live games before they seek a managerial position in casino operations?
Here is my take. A floorman is expected to step into the game and correct any errors. I can’t envision anyone handling this position without having dealt. However, a shift manager’s position is to manage those, who manage those, who deal. Therefore this position requires more management and less technical skills. When I first broke-in the casino manager “had to have dealt all three games.” In class we talk about the management pyramid. As one advances up the pyramid he needs more management and less technical skills. For a shift manager, I want the smartest person I can find. What they lack technically they can pick up reasonably quick.
“G” Table games supervisor, Incline Village, NV. As per your answer to Scott’s question about table games supervisors and limited lateral movement because casinos should promote from within, you and the casinos that adopt this attitude are sending the wrong message. Any dealer who reads between the lines here clearly must think twice before considering a supervisor position.
I wish there was an easy answer. You can’t have it both ways: promote from within and hire from the outside. If you don’t adopt a consistent policy then you are reverting to the old “juice” system. Management must adopt the policy that is best for the operation. Hiring from the outside is a morale breaker. Granted, you will miss some talented applicants but, in my opinion, the negative far outweighs the positive.
LK Palm Springs, CA. Mr. Kilby, why are casinos denying employment to those with credit problems? This topic has been hashed out on the message boards many times but never from anyone like you.
I have really never understood denying applicants with a bankruptcy. We are a monkey see, monkey do industry. Years ago someone adopted this policy and, consequently, everyone adopted the same policy. The thinking is that bad credit leads to employee theft. I have never seen an research supporting this belief.
“D” Table games supervisor Alton, IL. Your last statement in the main interview said it all “I believe this customer service buzz has been beaten to death. I think we should just adopt the golden rule “do unto others as you would have them do unto you.”
Thank you. I’m glad someone else agrees with me.
S.T. Dealer “Somewhere in the Midwest” What is with the personality profiling by HR?
HR is trying to hire the best employees possible. I guess they figure this approach separates the good from the bad. However, I don’t think this type of tests have been validated but I am not an HR person.
??? Las Vegas, NV. Our casino accepts breakage bets. A five-dollar horn bet on craps for example. Granted the player only losses .75 in the high side payoff but would you consider this poor customer service?
Customer service is a lot like pregnancy: There is no such thing as a little pregnant. I have discussed this many times with my students. It is really the player versus the game, not the player versus the casino personnel. If the opportunity arises, the player should be told the best bets, i.e., placing the 6 instead of betting the Big 6. The same with breakage bets. We should not be trying to rob the customer.
“L” Dealer Las Vegas, NV. What is your position on Advantage card players? Are casinos overreacting due to Griffin Investigations feeding all this fear in the ears of casino execs? Courts question this issue. May I? Now there is a customer service question I’ll bet you wont publish for Kilby to answer.
If we can identify a card counter then I say we should ask them not to play. However, we must have personnel who actually know the difference between a card counter and an erratic bettor. I do not agree with the “flat bet” policy. When we force a player to flat bet we are dealing to a player that is worth nothing to the casino and occupying too much of management’s time and energy. I tell my students that we are selling a product and often compare it to selling hammers at a hardware store. As long as we make money on the hammers we continue to shelve and sell. Once we can’t sell the hammers for what we pay for them we get out of the hammer business and discontinue the hammers. In casinos we sell a product as well, and that product is a negative player expectation. As long as the player has a negative expectation, we want to keep him if not we want to discontinue the item.
“J” Dealer Las Vegas, NV. If the state of Nevada blocked Howard Hughes from attempting to monopolize the casino industry, why not such corporations such as MGM?
In 1969 I worked at the Silver Slipper that was a Hughes property at the time. The industry was extremely small at the time. Hughes owned 6 casinos in Las Vegas plus Harold’s Club in Reno and had negotiated the purchase of the Stardust. His 2,000 total rooms represented 20% of the total rooms on the strip. The MGM isn’t anywhere near as big as Hughes was at the time.
“N” Dealer, Henderson, NV. Please forward this question to Jim Kilby. Dear sir, you seem to be staff friendly and from what I hear about you there is much admiration and respect from our new VPCO over here at Primm. My question is this; How do you suggest we motivate those dealers (aside from killing them) who have little desire to improve their customer relation skills in order to make more money. In other words I work with a bunch of ******** lumps over here that do nothing more than deal like a god damn machine and depend on others to make the tokes. It is said that 25% of the dealers make 75% of the tokes and we are a testament to that! Help us out here. Let it rip Kilby!
You can’t hit them over the head. I feel you must lead by example. You must show them you are willing to do “more” than you are asking of them. Therefore, customer service begins with management. You can’t threaten someone to be nice.
It is so important for casinos to hire personnel with the correct attitude. I believe attitude is so much more important that ability. When I first started dealing in 1969, you never heard the phrase “customer service.” To be hired in those days you must be what management called “a good clerk.” You could have had the worst personality around but, if you were a good clerk, you had all the job security you needed.
“F” Dealer, Biloxi, MS. Relatively young, inexperienced, and untrained managers seem to be reactive crisis problem solvers rather than proactive problem preventors. Personal frustrations among staff abound, job insecurity, communication by rumor [usually negative], “knee jerk” changes, and inconsistencies combine to lower employee morale around here. Why does management always seem to attempt to reinvent the wheel? Surly this is a common complaint? Isn’t it?
We really don’t have a means of training managers. We just promote from within the ranks. Several years ago I met with the head of Hilton International. I would give you his name but he might object. Anyway, he said that to get from dealer to V.P. of Casino Operations that the person must be extremely lucky. They had to be at the right place at the right time. He went on to say that once at the top they all had one thing in common: They didn’t have the skills necessary for the job (he used the word incompetent). This tells me we don’t prepare our employees to manage. We promote dealers to V.P. They are great dealers but know very little about management.
SF Dual-rate Las Vegas, NV. Here is where I have a problem with this whole table for table tokes debate. The boxperson you mentioned in your example is part of the management team as are the floor supervisors. Any supervisor that “looks away” during any attempt at dealer hustling is in breach of casino policy and procedures. If that supervisor was doing the job he was hired to do, the dealers would be risking their livelihood by even attempting to hustle a customer. That supervisors job is to insure the integrity of the game, to make sure that all state gaming laws are complied with and casino policy and procedures are followed. That is his job.
Therefore I’ve come to the conclusion that the problem is not so much the dealers but the people who supervise them. I don’t want to say it is human nature but lets face it, the mice will play when the cat is away. TFT or not. You also replied to Scott: “It is argued that to be friendly, dealers must be paid via tipping. I argue that you should hire friendly dealers” I totally agree with that! And I argue that casinos should also hire or promote honest managers. Because TFT would work as it does in some casinos with a fair and balanced rubber band rotation with honest supervisors who do the job they were hired to do. And dealers who go for their own (without hustling) tend to be friendlier overall.
If we go TFT you will see huge scores but you are asking for trouble. Back in the days of “Jimmy Chagra”, dice crews at Caesars would take home as much as $20,000 a man. This can only breed contempt. Piecing off the boxman used to be encouraged by management. In fact, many casinos automatically cut the boxman in for a share. However, management has discovered that this only encourages the boxman to “turn his head” and not do the job of manage. This was part of our culture. Management is trying to change that culture (not an easy thing to do).
“FR” Dealer, Norwich, Conn. In casinos, supervisors typically get promoted from the rank and file as you mentioned (and seem to agree with) because they have been there longest or have the best functional multi-game dealing skills. Neither are qualifications by themselves to be a good manager / floor supervisor. Consequently, people become supervisors who have neither the temperament nor the training for coping with the challenges of leadership. Especially the human relation skills that are necessary. Why isn’t it mandatory that in order to become a floor supervisor in a casino one should have at least formal training at a local college or university and then pay them accordantly. Wouldn’t this investment in higher education be the best avenue for promotion and for the welfare of the casino in the long term?
In my book I discuss the “Management Pyramid.” The pyramid shows the relationship between management skills and technical skills required for the job. I tell my class that the casino must prepare employees for advancement. That preparation can come for college courses or in-house education. Their employer is reimbursing most of the casino employees taking my class. The only way for management to advance the profession is through education.
“G” Casino marketing, North Carolina. The tribal compacts with casino management operators typically include preferential biases for Indian employees, with the purpose of uplifting tribe members’ self-esteem and ability to be productive. The downside of these conditions, however, is that they inherently create resentment among non-tribal employees. In your teaching, what advice do you give regarding this matter to your future casino executives? We know what Harrah’s does, we just want to read what you would do.
That is a tough question. I have discussed the principle and importance of the “vehicle for advancement.” But, with Indian gaming, part of the reason for the casino is to better the lives of the tribal members. Consequently, the non-tribal employees cannot become Indian. It must be extremely difficult to maintain employee moral when employees know they can’t be advanced if they are not Indian. I really don’t have an answer.
Dale, Table games, Las Vegas. People feared the impact that Atlantic City would have on Las Vegas when it legalized gaming in 1978 and the impact that the riverboat casinos would have when they began opening in the early and mid-1990s. Despite this expansion, Las Vegas has continued to grow at astounding rates, fueled largely by must-see mega-resorts. It is therefore my opinion that only conglomerate casino corporations could have accomplished this and for casino employees who don’t like these “big corporations that took over Vegas”, we would be history if casinos were still independently owned. Therefore the corporations are not only a way of life now but are absolutely necessary. Agree?
I agree 100 percent. The good old days are actually today. The Bellagio’s and Mirage’s could never have been built without corporate funding. How many individuals could secure a $1 billion plus loan? Not many. Not only that, with corporate ownership we actually have job security because the corporations are overly concerned with being sued. Back in “the good old days” your job security was as good as your juice. Employees today have job security without the need to have “juice.” Employees know they can’t lose their job at the whim of management. The legislation enacted through the years has given us rights. Wrongful termination didn’t exist when I was dealing.
“JMAN” Dealer, Biloxi, Miss. Can you tell us about leased table games such as Let it Ride, Three card poker and what you guys call Crapless Craps? What popular table games are “free” to use and which are not?
You must obtain permission to use any game that is patented. Crapless craps was around before the days of patents. Therefore, it is free to use. The other games you mentioned come with some sort of fee. Basically any game before “Caribbean Stud” is free to use. Caribbean Stud was the first casino table game to be patented. Red Dog is free as well as the traditional games: blackjack, roulette, dice, etc. If you read old books about gambling, the games are free to use. You must do some research if you have a particular game in mind.
“BJK” Table games supervisor, Detriot, MI. A fact of life is that the jobs of dealers and supervisors in a casino are very repetitive, monotonous tasks. Senior management are continuously focused on various benchmarks that move the company forward, with the marketing department moving from event to event, dreaming up ever more interesting ideas to attract customers and improve results. The employees on the casino floor, however, have no such system or short term goals, and each “exciting event” soon becomes just another opportunity to work very hard with little in the way of recognizable reward. In addition, it is probable that they are not involved in the bonus program, and if they are, it is on an annual basis – a timeline that is far too long to keep most people focused on their job on a daily basis. How did you keep your dealers and supervisors motivated or better yet in your teaching what do you recommend in this area to your students, the future casino operations managers?
Motivation is difficult to maintain in any profession. Money is not a motivator. You may think it is but research has proved it isn’t. If you received a big raise today, the effect will diminish quickly. We don’t discuss this in my classes because I don’t have any good suggestions on how to motivate the dealers. My best advice is to try to provide a clear and fair path for advancement. Unfortunately, there are so few promotions; employees are sure to become disillusioned.
GT, Dealer, Kasas City, KS. Please ask Mr. Kilby what other casino operations/management programs are out there in the U.S. besides UNLV, UNR and Community College in Nevada.
UNLV will soon offer a degree in Casino Management. I’m not sure whether UNR offers a major or degree. My textbook is sold in over 50 schools nation wide. Most of these schools are community colleges. While many schools offer courses, few have what one would call a casino program where the student can actually earn a degree or major. The community colleges will offer some sort of associate diploma. UNLV has the widest selection of courses.
Anonymous Dealer, Las Vegas. A friend of mine was laid off at the MGM because of the 911 terror attacks. As you are aware many casinos didn’t hire soon after that event. The only employment he could find was that in casino surveillance. After two years he claims to miss the excitement of the casino pit and desired to return only to find that most casinos didn’t want anything to do with him because “he crossed the line” and went upstairs. Our shift manager when asked if this is true said “In my personal opinion, its stupid but yes it is unfortunately true” – So its “one or the other” Mr Kilby?
I think that is silly as well. There is no reason your friend should not get a job back in operations. I would think he would actually be more marketable. He shouldn’t stop searching. Any casino executive who turns him down “because he crossed the line” is just employing some absurd practice that has been handed down. Years ago, the guys in surveillance were all cross-roaders. Consequently, they “crossed the line” by becoming a thief, not by becoming a surveillance operator. Today, cross-roaders can’t get a job in surveillance.
Tom, Dealer Las Vegas, NV. Mr Kilby, all this interview needs at the bottom of the page is a link to a Slots Tech School. It’s not just staff complaining any more. Casino ops managers are seeing their power chipped away each day. Does it make you happy a bit that you got out of the grind when you did?
When I first started teaching, my plan was just to use it as a break. Teaching is a good way of life and I stayed. I have left UNLV on three separate leave-of-absences to return to gaming full-time (assistant casino manager in 1986, V.P. of Casino Operations in 1990, V.P. of International Marketing in 2000). Each time I was eager to get back to UNLV. Consulting keeps me involved in gaming without having to endure the pressures that come with day-to-day operations.
GT, Dealer, Northern NV. I read in Professor Bill Thompson’s interview that his major gripe about the casino industry today is compulsive gambling issues. What is yours may I ask?
I really don’t know what we can do. We pay a lot of lip service to compulsive gambling but really wish the issue would go away. Unfortunately, the topic is here to stay. Consequently, casino must appear responsible. Therefore, we strategically place brochures around the casino telling the problem gambler where they can go for help. We will exclude a player who requests the help and, hopefully, we will discontinue the mailing of casino promotions to the player. Other than that, I don’t know what else we can do.
GY, Craps dealer, Las Vegas, NV. I like to play poker after work sometimes and at the Cannery Casino I have noticed that the poker tables are integrated with the pit games and there are many of the dealers who deal dice, BJ and poker. Is this a grand experiment or is it normal for a smaller casino to do this? (I like it by the way)
A small casino should have dealers that can deal multiple games. This isn’t an experiment; it has been the policy at smaller casinos as long as I have been in gaming. A larger casino will have an extra board to deal with ill employees and spikes in business. A smaller casino really can’t keep anyone on an extra board. Multi-game dealers allow you to spread the games to meet the demand.
PART TWO : INTERNATIONAL CASINO OPERATIONS:
Ian Sutton Gamingfloor.com: First of all Professor Kilby, thank you for letting me post questions to you about developments in the casino industry around the world and get your perspective on events. “Old Europe” has had casinos since the middle of the 19th Century. They were mainly established in tourist destinations, coastal towns and spa’s. Would you say that destination based gaming is preferable to setting up casinos on the doorstep of or amid major population centers?
Jim Kilby: This is fun Ian. I’m enjoying it very much. That is really a ROI question that is best addressed in a feasibility study. You would want to choose the project that will yield the greatest return. In one scenario, one might find the dollars would be best spent on a destination resort while under a second scenario the major population site might be the best project. Let me give you two examples:
1) A project in Chinatown, San Francisco, or
2) A project in Palm Springs, California.
The Palm Springs project would probably be a destination while the Chinatown project would be little more than a casino. I choose Chinatown.
Since we use the term “destination resort”, exactly what does that mean? Many resorts call themselves destination resort that I would not call a destination resort. I guess a destination resort is one that has a lot of stuff where, in theory, one could spend their entire visit in one property.
European casinos have traditionally been dominated by table games, but slots like in the U.S. are increasing their slice of the action. In France slot win is presently as high as 90% of the total. Surely with the advance of technology, research and development this is simply not just a fashion. Do you believe that it would be a good idea for regulatory bodies to stipulate minimum table numbers when granting casino licenses?
When Atlantic City opened, there was a minimum amount of floor space that must be dedicated to table games. The mix between tables/slots is really driven by the “public policy” toward gaming. If the policy is that gaming is to generate employment in the geographic area, then specifying a minimum table requirement is logical. The public policy provides the “road map” for all future regulators to follow. Unfortunately, many jurisdictions throughout the world do not have a public policy; they simply legalized gambling. The public policy supports the reason for the legalization and provides direction to all subsequent gaming regulators. So, from the employees’ perspective, they like the idea of minimum table requirements. But, from the owner’s perspective, he wants the flexibility to create a facility that yields him the most profit.
Several overseas countries forbid gaming staff accepting tips. What do you think are the drawbacks or benefits of such a system? Does tipping result in better customer service, increased play levels and therefore higher profits? Has any research been done on this subject?
Good question Ian. Unfortunately I am not aware of any proof positive one way or the other. In my consulting I have visited many casinos that forbid tipping but I have never worked under that environment. Your question can only be answered correctly with research and it would be extremely difficult to style a study to provide the answer.
Many European countries in 2002 & 2003 are struggling with gradually declining attendances. The Euro has not helped. Why is it that some U.S. casinos get attendances in the 10’s of thousands daily and in Europe just in the low hundreds per day.? Is more effective marketing of the product and ramped up customer service the simple answer to get customers to leave the comfort of their homes.?
In Las Vegas, we are always trying to build a better mousetrap. A successful casino in Las Vegas must continually be upgrading the property to attract new customers and keep the existing customers. The public has grown accustomed to gaming. When gaming is first introduced in an area, the motive for visiting the casino is to gamble. Today, many casino visitors’ primary reason for visiting the casino is to dine, see a show, see a movie, or go shopping. We know that they will gamble during their visit, but gambling has grown to be a secondary reason in many markets. So to drive attendance, the operator must create features, other than gambling, that draw the visitors.
U.K. deregulation will be delayed and may never happen. Several U.S. companies have struck deals with British companies. Do you think that U.S. companies when going overseas need local partners? What are the benefits from an operational standpoint. Do you think that the appeal of major U.S. brands and strong financial backing is always a guarantee of success?
I don’t think it is mandatory to have local partners but one would think it would help. The local partner might make it easier to get a gaming license. The local partner can help in the financing. I do not think a U.S. brand guarantees success; It doesn’t even guarantee success in the U.S. Every market is different. The successful operator will be able to develop a plan that addresses the nuances of the chosen market.
Many countries are implementing stricter controls and reporting of suspicious transactions. Do you think that casinos should be more pro-active in combating the problem of money laundering? And on a similar theme. There is one court case in Australia ongoing and possibly two more pending. If it has been proven in a court that a LARGE amount of money gambled in a casino was stolen, and that the casino made no attempt to find out the source of the funds, should the casino be required to pay it back to the victim?
Accusations of this type are occurring in the U.S. as well. I am aware of at least two high-profile cases working their way through the U.S. legal system. The culture of the casino is to follow the letter of the law: Nothing more. Should we be more pro-active? I share the same culture as today’s casino operators: Follow the law. If the law is inadequate, change the law.
Several countries around the world are thinking of establishing casinos. Among them Mexico, Thailand, Japan & India. The argument for establishing casinos in a community, state or country is that the operation will bring economic benefits and jobs. What is your opinion, is this always the case? Would this be a selling point that you would personally use?. And what have been the negative effects upon Nevada of legalized casino gambling?
With casinos come jobs and capital investments. Unfortunately, there is significant social expense as well: compulsive gambling, broken homes, suicides, etc. Nevada would not be where it is today without gambling. Personally I think Nevada is much better off with gambling than without. However, Nevada is unique. It is 300 miles from the nearest population center; is almost like an island. One had to make a deliberate effort to visit Las Vegas. Today casinos are everywhere. It is kind of growing up in a home with a weapon. You learn young in life that the gun can kill and must be handled safely.
Would you say that Internet gambling either at online casinos, sportsbooks, poker rooms etc.. is having an effect on business levels at bricks and mortar casinos?. Or is Internet gaming perhaps providing a new pool of customers for the future? Do you believe that advertising of Internet casinos should not be permitted in countries that have legal traditional gaming or other gambling products?. P.S. Lawmakers in Italy, Holland and Germany are already engaged in legal action against many websites and publications.
I’m sure Internet gambling is having an impact. Every casino is competing for a fixed amount of the player’s discretionary income and now Internet casinos are part of the competition. I’m sure the Internet casinos argue that they are introducing new players to gambling. I don’t buy it.
Advertising: I don’t think so but who knows what motivates legislation. It was not so long ago that advertising casinos in the U.S. for illegal. I would like to see the argument for restricting the advertising. I think the states that have gambling, and forbid Internet casino advertising, are motivated by greed. They want as much “taxable income” as possible. Internet gambling is difficult to tax the same as brick and mortar casinos.
Many international casinos require that a player has valid ID and must become a member before allowing them to enter. This has many advantages in that players wishing to be barred can be easily excluded. It also almost totally eliminates the problem of underage gambling. Can you see a time ever arriving in the U.S. that such a policy will be desirable or from a a legal standpoint even a requirement?
Ian, for this to work in the U.S. you must have a controlled entry. The first day the Mirage opened over 100,000 people entered the casino. Can you imagine trying to I.D. all those people? Impossible! I doubt any operator would choose this means of operation if not forced. Your job is to maximize profit. To maximize profit, the gambling experience must be as convenient as possible. Requiring I.D.s adds a barrier that, undoubtedly, decreases player visits and profit.
Thank you Professor Kilby. I will post a message on my forum at Gamingfloor.com asking for more questions.
Ian, I will answer any question I can. Please encourage them to ask whatever they like.
MORE QUESTIONS
C.K, Burswood, Western Australia. Reading the American staff forum, they seem very upset about new hire part-time and “extra board” they call it. Many complain about working a full schedule yet only considered “extra” – Some say for 2-3 years? Why?
Most casinos, where a dealer would like to work, have more applicants than positions. Dealers earn $200 per day and more in tips at the more desirable casinos. Casino business grows slowly. Consequently, it takes time for the business to grow to the point that additional staff is needed. In the meantime, casinos will establish an extra board to satisfy spikes in demand. Dealers will work on an as needed basis. Personally I think the beef is over-blown. If the dealers were made full-time, and the business takes a dip, the most recent hires are going to be the first laid off.
“CJ” Cairo, Egypt. What really happened at London Club in Las Vegas? We hear on our side, what is the American version?
The Las Vegas market is cut-throat. British casinos don’t have credit to deal with or discounts on loss to offer. Also, the U.S. customer has no property loyalty whatsoever. They go to the casino that gives them the best deal. The London Club has never had to compete in such an environment. This is my take with the limited information I have.
No name given, Parap, Australia. Do you ever think that American casino corporations will be allowed to venture into internet gambling?
If they do it will be a long way down the road. As you are probably aware, the Isle of Man recently issued internet gaming licenses and the MGM/Mirage won a license. They quit after about a year. They were not allowed to take bets from U.S. residents. Legislation in America prevents U.S. residents from gambling on the internet and, until that changes, no American casino will venture into internet gambling.
LA, Casino Shift Manager, Port Perry, Ontario. I was wondering if any studies have been undertaken or research done that has determined the optimal time a dealer should be on the table before they start to lose focus and concentration, particularly when this translates into errors. Thank you…
I am not aware of any published studies on the subject. I was involved in proprietary research several years ago where we tried to quantify the cost of dealer mistakes in blackjack. We reviewed 5,000 dealer player hands where dealers worked 60 minutes on and 20 minutes off. The data came from a downtown Las Vegas casino whose dealers would be classified at the level above break-in. It wasn’t a break-in casino but it was one that dealers would use as the step before a strip job. The company commissioning the study believed that dealer errors amounted to more than $100 per day. I was astounded to find only “5” hands where the casino over-paid the player and the error went un-corrected. There were errors during the hands but they were either corrected by the player, dealer, or floorman before completion of the hand.
It would be next to impossible to quantify the cost of “dealer fatigue.” You would need to have two extremely large samples where the length of time on game is the only difference between samples. Based on my experience, I would say dealer fatigue from 60 on 20 off staffing is insignificant.
Now, let me go on a tangent. I tell the same story to my students. When I broke in, blackjack dealers worked 40 on 20 off. Every now and then we would have to work 60 on 20 off. You can’t believe how we bitched in the break room. We found multiple reasons for arguing, amongst ourselves, why this was overwork. Now let’s go back to when I was in high school in Oklahoma. I would haul hay and roof houses during the summers. You won’t find many jobs that are harder. When the older dealers would complain about the 60 on 20 off, I would think about those hot Oklahoma summers with my butt either on a roof or loading and unloading bails of hay. It put it all in perspective.
Michelle in Romania. When considering how much to comp table games players, should the operator always stick hard and fast to comping on the basis of a percentage of theoretical win, or are there other factors that should be considered that may be more important? I ask as, for example, many junket operations in Eastern Europe make no financial sense from the operators point of view as theoretical win often does not even cover expenses incurred. What am I missing here? What is the best way to comp a player that loses $5,000 yet has a theoretical loss of just $50? The operator is in fact just holding that money in escrow for the next winner, but the player will surely be expecting decent comps.
It is extremely difficult to develop a comping policy that: 1) encourages player patronage while 2) assuring an acceptable profit margin. True, theoretical win demonstrates the true value of the player. And a policy addressing theoretical casino win ONLY addresses the first objective. However, actual player loss demonstrates a player’s sincerity. I would never advocate a policy that awards comps on theoretical win ONLY. You must develop a system that addresses both theoretical casino win and actual player loss. A casino should have a policy that awards up to the greater of “x” percent of theoretical casino win versus “y” percent of actual player loss. This is a difficult policy to develop but can be done. The percentage of actual loss will vary based on length of play. I discuss this in my textbook.
Marc, UK. What casino operation outside the states impresses you the most and why?
I was impressed with South Africa casinos when Sol Kersner was the operator. Mr. Kersner is the international version of Steve Wynn. He was a visionary and built tremendous facilities. He had top management and was committed to making the property the “best.” Genting Highlands in Malaysia is impressive in the way its management handles the tens of thousands of Asian customers visiting daily.
Scott Cameron. Well Mr. Kilby that should do it. I hope you had a good time
Scott, I was reluctant when first approached to do an online interview. You persisted and I relented and I’m glad I did. I truly enjoyed the questions presented and, hopefully, those reading the interview got something out of the exchanges. I would be happy to do a follow-up at any time you see fit. Thanks again for the opportunity.
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