Hartford Business Journal

www.HartfordBusiness.com March 21, 2016 • Hartford Business Journal 13 www.kelsercorp.com/cybercrime www.kelsercorp.com 111 Roberts St, Suite D East Hartford, CT 06108 860 610 2200 Secure them. Students trust you with their school records. whether a casino turns a profit each month, or lands in the red. "A high roller who beats you badly can offset hundreds of lower-paying customers," Foxwoods President and CEO Felix Rap- paport said during an interview in his corner office overlooking the Grand Pequot Tower in Mashantucket. "A high roller who loses can certainly put frosting on the cake for all the base business." It's unknown how much money high rollers bring into Connecticut casinos, but their activity has a major impact. Mohegan Sun's parent — the Mohegan Tribal Gaming Authority — for example, credited high-end table game play for boosting its fiscal 2016 first quarter profits, which totaled $255 mil- lion, up 3.8 percent from a year earlier. Table game revenue grew 18.2 percent to $93.3 million. Marketing to high rollers has also become increasingly important, especially as casino industry competition ramps up in the North- east, U.S. and even worldwide. Connecticut casinos are spending more to woo wealthy gamblers from across the globe, with Asian players being a significant target audience. But while they spend more, high rollers also bring casinos more risk. "Everything we do is pretty predictable, except the table games," Rappaport said. "To be in this business, you have to have the stomach for the wins and the losses." Things smooth out by bringing in more customers that lose, he added. "As long as you have good controls and the game is on the up and up … you have to have the stom- ach because a person could break you for $10 million," Rappaport said. Foxwoods' 4,800 slots are a more predict- able revenue stream because for every dollar wagered the casino keeps 8 cents. Clyde Barrow, project manager for the North- east Casino Gaming Research Project, said high rollers can have a significant impact on casino profitability, but there's a reason casino opera- tors don't sweat the money. Over the long run, the casino knows it will come out ahead "but that doesn't mean every now and then it doesn't happen [where they get hit for a loss]," he said. Casinos won't shut off a high roller because "odds are he will lose it back the next time," Barrow said. Or if not, someone else will. Casi- nos rely on the law of averages long term. Baccarat, for example, is the game of choice for many high rollers, Barrow said, with the odds 49.9 percent for the player vs. 50.1 percent for the casino. Those nearly even-money chances may not sound like a major profit opportunity for a casino, but when players stake $100,000 or $1 million a hand, significant money is on the line. "It's still in favor of the house by two- tenths of a percent," Barrow said. Wooing high rollers By some published reports, there are approximately 1,000 high rollers worldwide that casinos crave. Many are coming from Asia, according to Barrow, and casinos have to spend more money to attract them, especially as competi- tion keeps growing. When Foxwoods opened in 1992 it was operating in the U.S.' third gaming jurisdic- tion after Las Vegas and Atlantic City. Now there are casinos in 42 states. Throw in casinos around the world and the competition for wealthy and non-wealthy gamblers is intense. "They're having to offer more to attract the high rollers," Barrow said. At Foxwoods, Asians, in general, make up 10 percent of table-game gamblers, yet they repre- sent 40 percent of the wagering, Rappaport said. Asian marketing is especially important to the casino, which Foxwoods markets worldwide. Ray Pineault, president and general man- ager of Mohegan Sun in Uncasville, said there is no standard high roller, although they tend to be men more than women and all "very successful in their own right." Mohegan's high-end gamblers come from the U.S., China, Singapore, Indonesia, Europe and South America. The casino doesn't own a jet but will arrange private flights for play- ers as necessary, including helicopter rides to and from New York City. Those flights are going to become a lot shorter for some Asian players once Mohe- gan opens its planned $5 billion casino at the Incheon airport in Korea, which recently received its gaming license. Pineault said the northern provinces of China are only a short two-hour flight from that destination resort, which will open in stages beginning in 2019. At Mohegan, there is no defined minimum- spending level for what constitutes a high roll- er; it could take as little as a $10,000 credit line depending on an individual's playing habits. There's also no set percentage of how much Mohegan might spend on a high-end gambler, although a player wagering $2 million will be afforded more hospitality than one plunking down $100,000. Factors like a player's length of stay, travel distance and gaming history are all taken into account, Pineault said. Mohegan Sun's most loyal high-end bet- tors, for example, have access to the royal suite on the casino's 36th floor. It encom- passes about 3,500 square feet, with multiple bedrooms, dining rooms and a living room. The suites will have their own butlers and are stocked with whatever a high roller desires. The first master bathroom has a one-person Jacuzzi tub with six jets and underwater mood lighting as well as a separate steam shower. The second master bedroom comes with an extra- large Kohler Jacuzzi tub for four people. Future considerations The future of high rollers isn't clear. Right now, Rappaport said, everybody is trying to figure out Millennials. There aren't many of them yet, but they show signs of being differ- ent. Pineault said Millennials tend to be more socially oriented; Rappport said they like to gamble as part of a diverse vacation, which is part of the reason — in addition to height- ened competition — Foxwoods is trying to add more non-gaming amenities. Currently, only about 30 percent of their revenues come from non-gaming, whereas in Vegas up to 65 percent of revenues come from hotels, night clubs, spas, restaurants and other non-gaming activities. "The old formula of gaming and everything else being a loss leader is gone," Rappaport said. Of course, Mohegan and Foxwoods are fighting to keep every prospective customer. They're not placing all their bets on high- end gamblers. "You need whales and non- whales," Rappaport said, using the gaming industry's nickname for high rollers. "At any given point in time, you're not going to have enough high rollers to pay the bills." n from page 1 High rollers bring risk, reward The Mohegan Sun's 3,500-square-foot royal suite sits on the 36th floor of its hotel. It's a space reserved only for high rollers and occasionally entertainers. It includes multiple bedrooms, dining rooms and a spacious living room (above right). P H O T O | C O N T R I B U T E D

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