100, HB Session 9
Chapters 10-11
Chapter 10 NO Qs on Recreation or Theme Parks
Private Clubs
Places where members gather for social, recreational, professional and/or fraternal reasons (clubs DO NOT have customers) About 14,000 private clubs in the US with annual revenues of $14 billion (2006)
Types of Clubs
Professional clubs Athletic clubs Dining clubs Military clubs Yacht clubs Fraternal clubs
Country clubs
Full vs. social members
City clubs
Business-oriented
Categories of Club Ownership
Equity Clubs - Non-profit and tax-exempt Profits generated are reinvested in club Oldest form of club management and the most common form of ownership today Owned and organized by the members they decide who gets in the club What % of Augusta National Golf Club membership is female?
How Equity Clubs Are Organized
Source: Discovering Hospitality and Tourism, 2nd edition
Equity Clubs: Hierarchy of Management
Articles of incorporation and bylaws determine internal club mgt. structure
Members Board of Directors
Fiscal responsibility Policies and strategies
Committees
Membership, finance/budget, strategic planning
General Manager (NOT a club member)
Day-to-day operation
Organization Chart for a Large (Equity) Country Club
Source: Discovering Hospitality and Tourism, 2nd edition
Categories of Club Ownership
Corporate or Developer Clubs Operated for profit and are owned by a corporation, company, business or individual Membership purchased from clubs owner(s) with members having limited input and control over activities and club management (members are NOT the owners)
Are Club Managers different?
Many private clubs are not-for-profit and owned by the members Members are (usually) willing to pay a premium for a unique experience Politics of member relations can be complex (dont have customers but they do have board) Member satisfaction may supercede expense budgets Compensation levels usually reflect these realities
Club Operations scorekeeping
Revenues Initiation fees Membership dues Assessments Activity fees F&B sales
Uniform System of Accounts used for classifying expenses and revenues
Interested in learning more about Private Clubs?
Visit www.cmaa.org Join the MSU student chapter of CMAA Take MSU HB elective course in Club Management
Gaming Entertainment chapter 11
Whats the most popular form of legal gambling in the US?
Playing the lottery (about 51% of adults play annually)
Problems Associated with Gambling
Economic benefits with some social concerns Chance of becoming addicted to gambling - probably less than 2% of the population is at risk
5 types of legal gaming in US
Charitable gaming
Gaming run for the benefit of non-profit organizations (ex. HB casino night)
Commercial casino gaming
banked games in a variety of forms (Vegasstyle casinos, moored and excursion riverboats and racinos)
Lotteries (ex. Michigan lottto) Native American gaming Pari-mutual wagering (ex. horse or dog racing)
Gaming Entertainment vs. Gambling
Gambling
Playing a game of risk for thrills/money
Gaming entertainment
Casino (table games and slots) High-quality food and beverage Hotel rooms Live performances/shows/matches Theme parks, rides and museums
460 commercial casinos operate in 11 states Native American/tribal gaming operations exist in 28 states
Who is the Guest?
54.1 million U.S. households gamble in casinos (more one-quarter) than U.S. households make 371 million visits annually to casinos Casino players tend to:
Have higher levels of income and education Are more likely to hold white-collar jobs
What Attracts Casino Visitors
Source: Discovering Hospitality and Tourism, 2nd edition
US gaming: noteworthy historical highlights
Casino gaming legalized in Nevada (1931) New Jersey legalized gaming (1976) Native American gaming
1987 the US Supreme Court determined if a state has any form of legalized gambling, so can recognized Native American tribes US congress passed IGRA of 1988
Included 3 classes of games
Class I game
A social game that is not considered a game of chance, played solely for prizes of minimal value; or, a traditional form of Indian gaming engaged in by individuals as a part of or in connection with tribal ceremonies or celebrations.
Class II game
A game of chance including (if played in the same location) bingo, pull-tabs, lotteries, punchboard and other games similar to bingo, whether live or electronic, in which players bet against other players; an electronic game played on a linked video gaming device that is connected to a central computer system.
Class III game
Any form of gaming besides Class I and Class II games, including electronic gaming devices with random-number generators and house banked table games.
U.S. Gaming entertainment
Two decades ago, gambling in the US was legal in two states. Today, there are only two states, Utah and Hawaii, that do not permit some form of gambling!
Why is gambling (and particularly casino gaming) so popular?
It tests mental and physical capabilities -- it can be fun, and Its about the only form of recreation where refunds can be a part of the experience. CAVEAT: if you dont have it to lose, DONT PLAY (HOUSE ADVANTAGE is real) In the end, its all math!
Casino hotels - ways they differ from non-casino hotels
Rev/profit = gaming Comps (fruit baskets vs. airplanes) Income statement volatility/fluctuation
Bellagio Revenue (2008)
Definitions
Handle
Total of all bets/wagers made Includes the winnings returned to players Estimated at $70 billion annually in US
Win
Gross gaming revenue for the casino Equivalent of sales -- NOT profits Estimated at $32 billion in 2006
Organization Chart for Casino Operations
Source: Discovering Hospitality and Tourism, 2nd edition
Bellagio example
Table Games Baccarat Race and Sports Book Keno Operations Poker room Cage Casino Credit Administration
Pit Clerk Count Team Surveillance Slot VIP Services Limo Services Marketing Special Events
Organization Chart: Focus on Manager of Table Games
Source: Discovering Hospitality and Tourism, 2nd edition
Slot machines
In many casinos, slot machines account for 60-70% of the win Why? Percentage of slot bets kept by the casino (hold %) is controlled but usually high Competition influences Low labor costs Efficient (high number of bets per hour)
Profitability for a Casino
Tracking/controlling cash is crucial Technology make it possible to: better identify problem players and criminals access credit information and verify customer accounts/credit lines distinguish between whales, highend players, mid-range players and grind players
Interested in learning more about gaming?
www.americangaming.org MSU HB elective courses Casino Night etc.
Looking ahead
Chapters 12 & 13 Meetings and Events