Knowing your customer is a business commandment, and for casinos, it may be the most crucial card game.
“Oh my gosh, yes, it’s important,” said John Berrey, chairman of the Quapaw Nation, which is building a $350 million casino hotel and convention complex in economically depressed Pine Bluff. “We use a very expensive system where, once you get your player’s card, we know about you and what you’re playing. We use your driver’s license to set up your account, so we know your age and where you live, and that all goes into our system.”
Saracen Casino Resort is already running 300 modern slot machines at what it calls its “annex” at 3512 Market St., across the street from the casino and hotel construction site. (See Construction Flurry Advances Saracen Casino.) Eventually, it will offer 2,000 more slots in the main casino, as well as table games like blackjack, craps and roulette. Machines and dealers’ stations are set up to keep track and dole out rewards to repeat customers.
“Whenever the player cards are used, we know what machines and games those player cards are used for,” Berrey said.
The rewards keep players engaged, and the data aids marketing departments and eventually influences the games and attractions at casinos like Saracen, Oaklawn Racing Casino Resort in Hot Springs and Southland Casino Racing in West Memphis. All three locations began offering true games of chance in 2019, after Arkansas voters approved a 2018 constitutional amendment allowing four full-fledged casinos. (The fourth faces legal complications in Pope County.)
“It’s a very intense part of what we do,” said Berrey, whose tribe’s diverse business interests include the Downstream Casino Resort in Quapaw, Oklahoma, which features an 80,000-SF gaming floor, and a smaller original casino property nearby. “In our database of players we have probably a couple hundred thousand active players that we can stratify by age, what games they play, how often, all kinds of things. It’s a prominent part of our business.”
Berrey said the tribe already has about 10,000 player card holders betting at Saracen.
Joan Botts, vice president of marketing at Oaklawn, says her company also keeps close tabs, sifting data on games favored by bettors since casino gambling opened in April 2019. “Like most casino guests, ours tend to skew female, and most guests overall are age 40-plus,” Botts told Arkansas Business.
“We have a good variety of gender and age, and foresee the diversity continuing with our expanded casino,” she said.
Oaklawn, where parimutuel betting on thoroughbred races has been a staple for a century, opened a 28,000-SF gaming expansion this month, part of a $100 million build-out. Those plans include a seven-story 200-room hotel and a 14,000-SF multipurpose event center set for completion a year from now. The track also opened its live horse racing season on Friday.
“We definitely have crossover [from racing bettors to casino players], and crossover with our sportsbook,” Botts said. “We will have lots of promotions on the racing side this year, and will be promoting those to our casino guests as well. We will also continue to promote our casino activities to our racing fans. It all goes hand in hand.”
She said patrons had been patient through the inconvenience of construction — “truly resilient,” in Botts’ words. “We thank them profusely.”
State records offer a glimpse into revenue provided by different kinds of players at Arkansas’ nascent casinos, though they cover less than a full year. Wagers at Saracen’s slot machines totaled $188.4 million over the last four months of 2019; Oaklawn had $1.9 billion in wagers at video terminals, including the “skill-based” games before April and the true slots afterward. Southland, a dog track that is getting out of greyhound racing, was the champion of terminal-based betting with a whopping handle of $3.4 billion.
Oaklawn’s nine-month revenue from casino table games in 2019 was $9.7 million, compared with nearly $16 million at Southland. Saracen will not have table games until its main casino opening, set for June.
Sports betting also muscled into Arkansas in 2019, with operations at both Oaklawn and Saracen. (See Book It: Sports Betting Takes Off in Arkansas.) “Our guests are loving the sportsbook,” Oaklawn’s Botts said. “We were very proud to be the first legal sportsbook in Arkansas, and we have seen the volumes we expected.”
Oaklawn handled nearly $10 million in six months of sports betting in 2019, compared with a handle of nearly $1.4 million in just three months at Saracen.
“Southland plans to offer sports gambling, but Southland will first submit a plan to the Arkansas State Racing Commission detailing the sportsbooks’ operation,” said Scott Hardin, a spokesman for the Arkansas Department of Finance & Administration. “Upon approval, Southland can offer wagering on sports. The commission previously approved the plans for Oaklawn and Saracen.”
The biggest demographic change for the West Memphis complex, owned by privately held Delaware North of Buffalo, New York, will be saying farewell to its live greyhound-racing bettors. The track is halting dog racing by 2022, acceding to animal welfare groups and dog lovers. Representatives of Southland and Delaware North didn’t respond to repeated requests for comment.
The Next Generation
Slot machines remain the revenue workhorse of American casinos, according to David Schwartz, a gaming historian and former casino worker who is now vice provost for faculty affairs at the University of Nevada, Las Vegas. He was the longtime director of the school’s Center for Gaming Research.
“Slot machines remain the most important money-making part of casinos in the United States,” he wrote for Forbes.com. “In many states, casinos make between 65% and 80% of their gambling income from slots.” The reason is as simple as simplicity, he said. “A modern slot machine is easy to play. Players insert currency, decide on their bet amount, press spin and hope for the best … Video poker is a special variant of video slot in which players can use some skill in holding the most advantageous cards. All other slot machines, whatever their branding, are games of pure chance.”
For that reason, experts say, the slots simulating video games offer only an illusion of player control. The machines pay out at the same rate as others.
Berrey of the Quapaw Tribe said an eventual goal of all casinos is to appeal to a younger market. “Our demographics are what you would expect at any casino, with a lot of people 40, 50, 60 and up,” he said. “They have some disposable income, and they like to be able to get out and be entertained. Our goal is to transition to millennials and find different ways to entice them to come.”
Ideas include an indoor music venue, outdoor concerts on weekends, and a generally exciting and inviting environment.
“The design [at Saracen] calls for 50 gaming tables, which includes roulette, craps, all the blackjack games and pai gow poker,” Berrey told Arkansas Business. “We’re planning to open full-blown with everything we have in Oklahoma.”
The Quapaw do not have sportsbooks at their Oklahoma casinos, “so that will be an addition, and we’ll have a nice area with a video screen for those players.”
Berrey said the technology of sports betting attracts young people, “and in Las Vegas and other places they are working to build more competitive slot machines that mimic the qualities of video games” to appeal to younger players. “We’ve moved quicker than a lot of casinos and maybe even Las Vegas. A lot of our machines are newer than what you’ll find there.”
Common perceptions about slot players — that they’re largely retirees feeding coins into rows of machines — are outdated, Berrey said. “We thought that was true, but we’ve found at Downstream that we’re getting a younger demographic at the newer machines, and we market to them as well as the older demo. It’s not as distinct a separation as you’d think.”