You ever go into a casino on a Friday or Saturday evening at 8pm and notice how everyone is having a blast?
Raising their glasses in a toast, the slot machines ringing out, loud screams and excitement, lots of laughs and a generally good atmosphere?
You ever walk around the same casino floor at 2 or 3am and notice how everything has changed?
Not exactly silent, but nobody seems happy or excited anymore, people staggering about trying to find their way to the exit or the elevator to their rooms, people at the slot machines angrily punching down on “bet max” or just puffing away on that seemingly never ending cigarette?
This was pretty much my experience when I stayed at the Aquarius Hotel & Casino in Laughlin, Nevada recently.
Although I was there because I was visiting family in nearby Bullhead City, there were plenty of others that were just there as a weekend getaway to the casino.
(The Aquarius Hotel & Casino on the Laughlin riverfront)
I would assume that almost everyone has heard the phrase the house always wins, and knows the odds are against you in a casino regardless of the game you play.
So what is it about a casino that has people coming in, and keeps people coming back even though they’re likely to lose?
What lessons can you take from a casino and apply to your own business?
Here are some lessons learned, and 4 major reasons why the house always wins.
They have a built in advantage.
You know what makes the casino business great from the operators perspective?
You make the rules.
This means, no matter what game you saddle up to in a casino, the odds are against you. No matter how well you know the game, no matter how perfectly you play, over the long haul, you’re destined to lose. The only way around this is to get really good at table games like Texas Hold’em where you’re playing against other players and not the casino itself, or to count cards.
If you get good enough to count cards effectively and the odds turn slightly in your favor, you know what happens?
You get found out and shown the door.
Lesson learned: You rarely get to make up your own rules, but in any business, have an advantage over your competition.
They make you think you’re getting more than you are.
Hit the button on the slot machine and you’ll almost always get something back. The machine will light up, bells and whistles will ring, and you’ll feel good. The problem is, sometimes your “win” is 5 cents when the bet was $1.
Casinos are great at making you feel as though you’re doing better than you are, or that you’re getting good value. They’ll also give you comped meals, free drinks, possibly even a room to stay, but they’re almost always going to extract more from you than you get in return.
Lesson learned: You should always strive to provide real value, but always make people feel like they’re getting more than they are.
They make it easy to stay.
Casinos know you don’t NEED to be there, so when they get you, they do everything they can to keep you. The gaming industry over the years has gotten keeping you there longer down to a science.
The layout of the casino floor, the absence of clocks, perfectly filtered air, the Feng Shui architecture – everything in a casino is taken into account.
In addition to making sure the building does it’s part, they also pepper you with free drinks to help loosen your grip on your chips, and have good deals (if not free) on in-house restaurants or buffets to keep you in the building longer, hoping you’ll gamble some more as you make your way through the gauntlet of games on your way to the exit.
Even after you leave, if you’ve signed up for a players card, you’ll get offers in the mail for free or discounted rooms to come back.
Lesson learned: Make it easy for people to do business with you and to come back in the future.
(Laughlin, Nevada from the south)
They are efficient.
There are two types of profitable businesses: those than have high margins, and those that have big volume. Sometimes a company is even lucky enough to have an entrepreneur like Steve Jobs and is able to have both like Apple has enjoyed for years.
At a casino, there is very little wasted space, but also very little wasted time. The casino can’t control how you play at a slot machine of course, but at the tables the dealers move as fast as possible to keep turnover as high as possible. Since the house advantage at the tables is less than that of machines, having more hands dealt = more money for the house.
Lesson learned: Be as efficient as possible in the things you can control.
He looks harmless, but this guy will clean you out if you’re not careful.