Bradley Theorem of Casino Economics Covered by "BusinessWeek"
Sherman Bradley's theorem regarding the unusual difficulties being suffered economically by Las Vegas casinos has become accepted industry wisdom within a matter of weeks. Bradley, Online Casino Advisory's senior gambling analyst, explained the puzzling decline in growth in the previously "recession-proof" casino industry by observing that many casinos, in particular Las Vegas Strip resorts, are no longer in the gambling business.
By turning the features which used to be simple enticements to draw gamblers into major sources of revenue, casinos became entertainment businesses, in which gambling was but a part of the attraction. This meant casinos were now in the restaurant business, the hotel business, the vacation industry, the merchandise and retail market, the nightclub industry, and special events promoting.
None of those industries had ever been resistant to economic swings; rather, they are traditionally among the most affected by tough economic times. Thus, the casino industry had traded its resistance for a quick buck, but now finds itself especially vulnerable.
Latest of many experts and publications to espouse the tenets of the Bradley Theorem is BusinessWeek, which quotes Standard and Poor's gaming analyst Esther Kwon. Kwon states, "Now Las Vegas has become an entertainment capital with a broader audience who enjoy things like Broadway shows, shopping, and dining. And that is a lot more sensitive to economic downturns."
Bradley smiled when informed of Kwon's remarks and said, "It is good to know my esteemed colleagues agree with my observations. Perhaps the top management of the casinos will realize the trap their corporate, short-term thinking has led them to, and make adjustments before the Las Vegas crisis worsens."
Kwon also asserted that casinos must be seen as regional markets, explaining the difference in performance between some boom areas and the struggles of Atlantic City and Las Vegas. Bradley said, "Not only have regional casinos not yet gone the path of diversification of product, but many see the increase of gambling revenue to be their prime objective, using all other aspects of their business to serve this goal.
"The result is growing revenue at tribal casinos, in Macau, and certain other areas where the industry is still the casino industry. The only way gamblers will make travelling an important part of their hobby again is if the old comps and enticements are brought back. To make these draws into penny-pinching money-makers is to force gambling patrons to ask themselves why they should travel just to spend so much on dining, rooms, and other things not involved in gaming."
