Benign Betrayal
Global Gaming Business, August 2005
Written by: Fred A. Buro
Through out history, almost every social, political, religious or industrial movement was marked by a major event – usually precipitated by one person with a dream few could completely comprehend. Columbus, Fulton, Gandhi, Einstein, and Galileo to name just a few, were people who sparked life into outrageous ideas that would betray conventional wisdom and ultimately change the world.
Experts are never short of opinions. In fact, numerous inventors, worshipers, navigators, scientists and entrepreneurs often have conflicting views about the same thing which is why many of history’s most famous were infamous fools first. Robert Fulton comes to mind as his folly ushered out the mule barge business and changed river navigation forever. From complex theories about the galaxy, God and gravity, to horseless buggies, motors, electricity, the steam engine, or men flying and going to the moon, most were concepts not contemplated by the average person during a normal day.
Christopher Columbus was considered a lunatic and heretic by some for betraying conventional beliefs about the shape of the world. The earth was truly flat at the time. That was a long time ago. But even in our life time at one point medical experts were certain that it was impossible for a human to run one mile in less than four minutes. Those who kept trying were fools simply wasting their time.
Change threatens. The equity holders of powerful intuitions can fear it for a variety of reasons. Change could meet with resistance from the sponsor of a poorly performing strategy because it means keeping a really good job. And even though corporations need innovation to reinvent them selves, resistance to change can be devastating to a career. Common objections are usually risk/reward based and since change means moving against history, statistics, conventional wisdom and unknown agendas, an innovative idea can be cast as a folly and easily quashed. The ground swell of resistance can be like traveling south on the north bound side of a highway during rush hour. The encouragement to turnaround would be most compelling.
So what does all this mean to marketing and positioning casinos? One example would be when Steve Wynn first presented the concept of the Mirage for the Vegas strip. The idea was considered outrageous by some. But he secured funding and in the face of his critics who by the way assured its failure, built it. The Mirage was no folly either. It became the standard for mega casino resorts the world over. Sheldon Adelson did something similar with The Venetian. The willingness to betray convention fuels innovation and perhaps is the essence of vision, leadership and progress, and are traits that these men and other icons in our industry share. Their journeys seemed to be navigated within dynamic parameters; the powerful and the visionless, and, the visionaries and the powerless.
Building a casino bigger and better to cannibalize customers from competitors is like using a battering ram to open a door. Which is exactly what The Mirage did in Vegas and the Borgata did in Atlantic City. Despite the demagoguery and dispersions, the conventional styles and concepts of the prototypical physical plant in those markets was betrayed. The strategy seems extremely risky as it requires obscene amounts of capital and belief in a vision few could share. The proof of which may be the names on the buildings. Those deals were not preempted by anyone
And from the day they opened they were instant success stories. They immediately gobbled up market share although they ultimately grew the market. Of course, precise timing, a strategic location and excellent performance are mandatory components. And as always, the score card is graded by customers. At the recent opening of Wynn Las Vegas someone was quoted as saying ‘what I think about the property doesn’t matter any more. It’s up to them now”. I think it was Christopher Columbus reincarnated.
If you don’t have the stomach for the battering ram approach, performance excellence may suffice to sustain growth for shareholders. But a precise allocation of resources and assets to short, mid and long term yield strategies may not be enough because with consolidation, emerging jurisdictions and expansion, those strategies must remain fluid. The Harrah’s Caesars acquisition has created a single operator with over 40 casinos in several countries and over 47 million loyal customers in its database with a potential mega hub that could make Flamingo and Las Vegas Blvd the most significant intersection in the entertainment world.
Imagine a couple dozen super Wal-Marts, in a row, on a single street or strip in the middle of the dessert, with similar stuff inside, at competitive prices. As a customer, which one would you walk into? Harrah’s tracks are pretty clear - and if you trace the steps and add a little vision; the picture at this stage anyway, once again may betray the conventional physical plant and the proven strategy of simply building “one” newer bigger and better than all the others. Imagine “seven” bigger and better properties stratified by their individual amenity set but physically and seamlessly linked in some way smack in the center of the ultimate gaming and entertainment destination of the world.
Harrah’s, Caesars, Bally’s, The Flamingo, Paris and The Rio; the ultimate place for every gambler including each of its own 47 million loyal customers to stay and play when they visit Vegas - truly the perfect location within the only location of its kind in the world.
Of course, what ever the manifestation, that foot print will not create doom and gloom for the Vegas market. In fact just the opposite is more likely; perhaps another spectacle in a spectacular city that is a”must see”. Although, I suspect calling it an attraction or the next generation volcano would be a slight understatement. Hence, the barriers to entering the Vegas market may get even larger along with exit barriers for the Harrah’s Caesars Total Rewards customer.
This looming development reminds me of a Star Wars movie when the immense Death Star was almost complete. Not comparing anyone to Darth Vader mind you. Not withstanding, he was really smart and a good Jedi Warrior at one time. Anyway, while driving EPS quarter after quarter dominates gross amounts of resources from every company, the focus for a while anyway, may remain on what impact Goliath’s next move will have on the rest of us Davids. Figuring out that master plan beyond Las Vegas lay in the cross hairs of a few I would suspect.
And given the fundamentals of price, product, performance, and distribution; one option to be considered would be; expanding the product distribution network through other distribution channels. A merger with a mega entertainment or communications giant such as Time Warner or Disney might be one vision which if realized, could eclipse the gaming industry in a way that could leave the revered monoliths of the Vegas strip far behind as old generation gambling halls.
Written by: Fred A. Buro
Through out history, almost every social, political, religious or industrial movement was marked by a major event – usually precipitated by one person with a dream few could completely comprehend. Columbus, Fulton, Gandhi, Einstein, and Galileo to name just a few, were people who sparked life into outrageous ideas that would betray conventional wisdom and ultimately change the world.
Experts are never short of opinions. In fact, numerous inventors, worshipers, navigators, scientists and entrepreneurs often have conflicting views about the same thing which is why many of history’s most famous were infamous fools first. Robert Fulton comes to mind as his folly ushered out the mule barge business and changed river navigation forever. From complex theories about the galaxy, God and gravity, to horseless buggies, motors, electricity, the steam engine, or men flying and going to the moon, most were concepts not contemplated by the average person during a normal day.
Christopher Columbus was considered a lunatic and heretic by some for betraying conventional beliefs about the shape of the world. The earth was truly flat at the time. That was a long time ago. But even in our life time at one point medical experts were certain that it was impossible for a human to run one mile in less than four minutes. Those who kept trying were fools simply wasting their time.
Change threatens. The equity holders of powerful intuitions can fear it for a variety of reasons. Change could meet with resistance from the sponsor of a poorly performing strategy because it means keeping a really good job. And even though corporations need innovation to reinvent them selves, resistance to change can be devastating to a career. Common objections are usually risk/reward based and since change means moving against history, statistics, conventional wisdom and unknown agendas, an innovative idea can be cast as a folly and easily quashed. The ground swell of resistance can be like traveling south on the north bound side of a highway during rush hour. The encouragement to turnaround would be most compelling.
So what does all this mean to marketing and positioning casinos? One example would be when Steve Wynn first presented the concept of the Mirage for the Vegas strip. The idea was considered outrageous by some. But he secured funding and in the face of his critics who by the way assured its failure, built it. The Mirage was no folly either. It became the standard for mega casino resorts the world over. Sheldon Adelson did something similar with The Venetian. The willingness to betray convention fuels innovation and perhaps is the essence of vision, leadership and progress, and are traits that these men and other icons in our industry share. Their journeys seemed to be navigated within dynamic parameters; the powerful and the visionless, and, the visionaries and the powerless.
Building a casino bigger and better to cannibalize customers from competitors is like using a battering ram to open a door. Which is exactly what The Mirage did in Vegas and the Borgata did in Atlantic City. Despite the demagoguery and dispersions, the conventional styles and concepts of the prototypical physical plant in those markets was betrayed. The strategy seems extremely risky as it requires obscene amounts of capital and belief in a vision few could share. The proof of which may be the names on the buildings. Those deals were not preempted by anyone
And from the day they opened they were instant success stories. They immediately gobbled up market share although they ultimately grew the market. Of course, precise timing, a strategic location and excellent performance are mandatory components. And as always, the score card is graded by customers. At the recent opening of Wynn Las Vegas someone was quoted as saying ‘what I think about the property doesn’t matter any more. It’s up to them now”. I think it was Christopher Columbus reincarnated.
If you don’t have the stomach for the battering ram approach, performance excellence may suffice to sustain growth for shareholders. But a precise allocation of resources and assets to short, mid and long term yield strategies may not be enough because with consolidation, emerging jurisdictions and expansion, those strategies must remain fluid. The Harrah’s Caesars acquisition has created a single operator with over 40 casinos in several countries and over 47 million loyal customers in its database with a potential mega hub that could make Flamingo and Las Vegas Blvd the most significant intersection in the entertainment world.
Imagine a couple dozen super Wal-Marts, in a row, on a single street or strip in the middle of the dessert, with similar stuff inside, at competitive prices. As a customer, which one would you walk into? Harrah’s tracks are pretty clear - and if you trace the steps and add a little vision; the picture at this stage anyway, once again may betray the conventional physical plant and the proven strategy of simply building “one” newer bigger and better than all the others. Imagine “seven” bigger and better properties stratified by their individual amenity set but physically and seamlessly linked in some way smack in the center of the ultimate gaming and entertainment destination of the world.
Harrah’s, Caesars, Bally’s, The Flamingo, Paris and The Rio; the ultimate place for every gambler including each of its own 47 million loyal customers to stay and play when they visit Vegas - truly the perfect location within the only location of its kind in the world.
Of course, what ever the manifestation, that foot print will not create doom and gloom for the Vegas market. In fact just the opposite is more likely; perhaps another spectacle in a spectacular city that is a”must see”. Although, I suspect calling it an attraction or the next generation volcano would be a slight understatement. Hence, the barriers to entering the Vegas market may get even larger along with exit barriers for the Harrah’s Caesars Total Rewards customer.
This looming development reminds me of a Star Wars movie when the immense Death Star was almost complete. Not comparing anyone to Darth Vader mind you. Not withstanding, he was really smart and a good Jedi Warrior at one time. Anyway, while driving EPS quarter after quarter dominates gross amounts of resources from every company, the focus for a while anyway, may remain on what impact Goliath’s next move will have on the rest of us Davids. Figuring out that master plan beyond Las Vegas lay in the cross hairs of a few I would suspect.
And given the fundamentals of price, product, performance, and distribution; one option to be considered would be; expanding the product distribution network through other distribution channels. A merger with a mega entertainment or communications giant such as Time Warner or Disney might be one vision which if realized, could eclipse the gaming industry in a way that could leave the revered monoliths of the Vegas strip far behind as old generation gambling halls.
posted by Fred A. Buro at 5:43 PM
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