Last week’s Florida Gaming Congress involved many discussions about the current gambling industry in the Sunshine State, highlighted by a fear of saturation. With the economy in a slump, most agreed there is a great need for innovation to draw visitors from further destinations than an establishment’s back yard. One even suggested imploring state legislators to amend the gambling laws to permit sports betting and fantasy sports at Florida casinos.
“It’s a regional market that’s achieved a certain degree of maturity and saturation,” said Fortress Investment Group’s Managing Director, Adam Rosenberg, specializing in gaming and leisure investments. “For there to be some other form of expansion, you’d need a catalyst.”
With a total of 33 land-based tribal casinos and racinos licensed in Florida, some urban areas have become inundated with gambling destinations. Gulf Stream Park and Mardi Gras Casino are both competing in Hallandale Beach. In nearby Miami, Magic City Casino and Casino Miami are only 3 miles apart, with the year-old Hialeah Park racino less than 15 minutes further north. Seminole’s Classic Hollywood and Hard Rock casinos are less than a mile apart on State Road 7. After opening in February just 5 miles to the east, Dania Casino & Jai Alai closed in October due to insufficient revenue.
After confirming the onslaught of operators, the discussion turned to a means of developing the casino industry without sacrificing anymore businesses. Steve Calabro, GM of Hialeah Park, suggested the state needs to focus on helping existing casinos instead of handing out licenses to out-of-state conglomerates.
Dave Jonas, CEO of Casino Miami, said South Florida has a more difficult task of contending with “not only other casinos but everything out there… restaurants, night clubs and festivals”. Casinos are forced to offer expounded entertainment and unyielding promotions, lest customers take their business elsewhere.
Isle of Capris Casinos Administrative Officer, Donn Mitchell, said that promotions aren’t a viable source of boosting foot traffic anymore, blaming the Seminole tribe for trumping each and every attempt. “Any time we go out with a meaningful promotion, they will match that and beyond, typically by 2 to 3 times.”
Making matters more difficult is the fact that the most common type of player – the one that spends no more than $100 in a typical outing – has become virtually non-existent. Studies show that sub-$100 gamblers make up about 50% of all casino goers, but the economic slump has driven them away. Thus far, promotional campaigns to bring them back have been ineffective, causing many Florida casinos to simply give up on marketing to that crucial genre.
Amid all the finger pointing and accused culpability, one panelist actually had an idea how to turn things around. Daniel Wallach, from the law firm of Becker and Poliakoff, suggested that industry growth would require growth in product availability. He indicated that such growth could be achieved by linking Florida’s casino to sports betting and fantasy sports.
Wallach identified the fantasy sports market as a 41-million-player strong industry that takes in $15 billion in entry fees, while sports betting generates $500 billion every year; $10 billion of that coming from Super Bowl bets alone. Wallach believes that the best way to solve the saturation effect throughout Florida casinos is to implore state legislators to approve betting on sports and fantasy sports.