Vegas casinos shift to 'whale' hunting

NEW YORK: Casinos that “whale hunt” pull out all the stops to entice high-rolling players who can often affect a casino’s revenue with a good hand. ‘Whales,’ once significant factors in a casino’s profits, are losing their importance, as gambling centres like Las Vegas depend more on non-gambling features for revenue and casino companies increase in size.

Gamblers who routinely risk half-a-million dollars or more get red-carpet treatment from casinos. These whales are flown in on private jets, picked up by limousines and whisked away to penthouse suites where private elevators take them to exclusive gaming rooms with credit lines that run into millions of dollars.

Other perks include show tickets and discounts on losses, where the casino will forgive a percentage of the player’s loss. “You market to them one at a time,” Bill McBeath, president of MGM Mirage’s Bellagio casino, said of wooing the high-stakes gamblers who are willing to part with big bucks.

The stakes are high. A few high rollers can either leave a dent in a casino’s revenue or boost its profits. But while there are more whales than ever, their hold on a casino company’s overall fortunes has waned.

Consolidation in the industry over the last few years has created behemoths such as Harrah’s Entertainment and MGM Mirage, who due to their size and mass markets are less susceptible to the vagaries of Lady Luck.

“The average Joe coming in and leaving $50 or $100 basically pays for operating the place,”, Daniel Lee, CEO, Pinnacle Entertainment, said. “And the high end is your profit,” he added. Las Vegas casinos also now get more than half of their revenue from non-gambling sources, such as hotel rooms, retail and food and beverage sales — further weakening the whales’ impact.

Yet the high-roller business remains a game of chance. Peter Dunay, chief investment strategist at the Leeb Group, remembers seeing baccarat tables at casinos where players needed to have at least $250,000 to take a seat. “These people were playing with a million dollars and more,” Mr Dunay said. “They give $25,000 chips as tips.”