Research Communications

The Expert View: Alan Silver on trends in casino management 

By Natalia Radic

Should the United States gamble on adding more casinos to boost the economy?

It's a question that media have been asking Alan Silver, an Ohio University assistant professor of restaurant, hotel, and tourism. The institution's first and only casino expert has fielded interviews from news outlets such as ABC 6/Fox 28 Columbus, NBC 4 Columbus, WTVN Radio Columbus, WWL Radio New Orleans, the Columbus Dispatch, the Cleveland Plain Dealer, the Toledo Blade, and the New Orleans Time Picayune, just to name a few.
Alan Silver
After an initial career as a history professor and advertising agency owner, Silver joined the country's second-largest casino gaming company in Las Vegas. In the years that followed, he worked in the industry in Reno, Nevada, and Atlanta, Georgia.

He then returned to academia, teaching at the University of Nevada Las Vegas and Tulane University. After his arrival at Ohio University in 2011, he developed the institution's first courses aimed at preparing students for careers in casino management.

Silver talks to Ohio University's Perspectives magazine about the top trends he sees in the casino industry.

American cities compete for casino dollars

More states—including Ohio—are looking to the casino industry to boost revenues. Commercial casinos are legal in 23 states, according to the American Gaming Association, with legal online gambling underway in New Jersey. Fourteen of the states with state-regulated commercial casinos also allow race tracks with slot machines ("racinos"), while Native American tribal casinos may be found in states with and without commercial casinos, he notes.

But as new markets open up, states are facing increased competition from neighbors. Atlantic City "got pelted when Pennsylvania opened casino gambling," Silver says.

The slow economic recovery also has impacted initially rosy revenue projections.

In Ohio, 2009 revenue projections were as high as $1.9 billion per year from casino gaming. But, as the Cleveland Plain Dealer reported, revenue slumped in 2013, and Gov. John Kasich had to reduce future projections to about $958 million.

"When the referendum went on the ballot in 2009, the voters were made all of these promises. … We expected to have all of this revenue come in from casino gaming here in Ohio," Silver says. "It has not happened. It did not meet the forecast."

The Southeast is one of the remaining markets for potential growth in the casino industry, with Texas and Georgia in the best positions, he says. American cruise ships in international waters also hold promise, says Silver, who pioneered the marketing of the concept during his time at Leisure Time Casino and Resorts.

Otherwise, the industry in the United States has limited room for expansion, he adds, with the exception of acquisitions and mergers.

Las Vegas turns to Emeril, Cher, and Shopping

Las Vegas is known for its big casino presence, but it also has become the largest market for the entertainment industry. With highly publicized professional boxing matches, celebrity chef restaurants, and performers such as Elton John, Cher, and Britney Spears, the Nevada city brings in 64 percent of its revenue from nongaming-related activities.

"Las Vegas does not need any more casinos. We don't need any more slot machines. We don't need any more table games. What we really need is more amenities, more attractions," Silver says.

Casinos are, accordingly, boosting their budgets for dining and entertainment instead of games.

"People come to Las Vegas nowadays to stay in nice hotels. You have celebrity chefs and celebrity restaurants, and you have world-renowned entertainment," he says.  "You also have high-end retail closely associated with major casino resorts. For instance, The Forum at Caesars Palace and the luxury mall at City Center, near the Cosmopolitan Hotel and Casino. So if you get tired of gambling, you can go on a major shopping spree."

Big business in Asia

Las Vegas may be the crown jewel of the American casino industry, but it can't compare to Macau, China, which pulls in seven times more revenue, Silver says.

Its top attraction is baccarat, a chance-based card game that draws high-stakes gamblers and, according to Silver, averages $35,000 per table per day.

Macau attracts gambling tourists from China, Singapore, Korea, and Japan. From 2002 to 2013, its gaming market has grown from $2.8 billion to almost $45 billion.

"Other gambling venues in Asia include Singapore," Silver notes, "which has exploded in growth and now rivals Las Vegas in revenue."

Taking a chance online

Online gaming has become a major concern for the U.S. market. Many gaming websites do not adhere to state and federal gambling regulations and allow gamers from all states to register—even in states where the activity is illegal. 

For now, all eyes are on New Jersey as it implements online gaming laws.

"It's a question of regulation because this is a highly regulated industry," Silver says, noting that gaming control boards are tasked with watchdog roles. "We are trying to keep the criminal elements out of the industry."

This story will appear in the Spring/Summer 2014 issue of Ohio University's Perspectives magazine, which covers research, scholarship and creative activity.

Photo: Courtesy of Alan Silver