Examining National Trends to Predict the Future of Gaming in Florida

By Marc Stephen Shuster Partner, Berger Singerman | August 03, 2014

Co-authored by Etan Mark, partner in Berger Singerman’s Miami office and co-manager of the Dispute Resolution Team

The scope of gaming’s impact on the hotel industry depends upon whom you ask. If you’re a mom and pop independent, a small franchisee, or you operate Disney (or another company where gaming can have a negative impact on your bottom line), you would most likely conclude that casinos are threats and/or competitors. That potentially includes competition for clientele, direct revenue, and indirect revenue. As you’ll read in our expert panelists’ comments, for example, lost convention revenue is a significant piece of this equation.

In stark contrast, many big hotel chains hope to see gaming come their way, and even join forces with the casino companies. From a revenue standpoint, there is no greater partner than a casino occupying your first floor, with your hotel rooms directly above the action. In hospitality, there are very few things which, at least superficially, seem to make more sense. When you compare traditional hotels and casino properties, you can understand that the customer bases can be vastly different. This has the double effect of increasing a given customer segment (locals, residents of neighboring states, and, potentially, national and international clients), while possibly diminishing other segments at the same time (e.g. those with moral objections to gambling).

The critical factor our panelists address is geography. All the positives in the world can be ineffectual, if your property is in an area where there is casino saturation and rapidly declining revenues. Nowhere is that more applicable than in Atlantic City, where casino revenue has plunged from a high of $5.2 billion, in 2006, to $2.86 billion last year. With severe competition from Pennsylvania (now the nation’s number two casino market after Nevada) and additional casinos opening in New York and Maryland, the writing is on the wall in New Jersey. As of the authoring of this piece, it’s being reported that 25% of Atlantic City’s casinos could be shut down by the fall of 2014. Even a market giant like Caesars Entertainment is reportedly closing the doors on the iconic Showboat Atlantic City Hotel and Casino.

Here at Berger Singerman, we have a unique perspective, having handled casino bankruptcies and restructurings in some of those saturated states, and various casino matters in our home state, Florida, which is, arguably, the most under-penetrated gaming state in the U.S. We thought it would be a great idea to bring together a couple of our colleagues, along with three renowned casino operators/consultants, and explore the paradox that is the future of gaming in Florida, and the future of gaming in America.

The moderator of the panel, and the individual responsible for assembling this stellar group of panelists, is my colleague, Etan Mark. Etan’s recent discussion of the future of Florida gaming, in his Miami Herald article, “The Gaming Drizzle on the Horizon, ” attracted a lot of attention, and was a significant precursor to the creation of this panel, in conjunction with the host of this event, HistoryMiami, the premier cultural institution committed to gathering, organizing, preserving, and celebrating Miami’s history as the unique crossroads of the Americas. Etan’s bio is featured at the end of this article, and his introduction of our esteemed panelists leads off this inside look at the captivating intersection of hospitality, entertainment, politics, and powerful local and national constituencies:

Coming up in January 2018...

Mobile Technology: Relentless Innovation

Technology has become a crucial component in attracting and retaining hotel guests, and the need to enhance a guest’s technology experience is driving a relentless pace of innovation. To meet and exceed guest expectations, 54% of hotels will spend more on technology in 2018, and mobile solutions in particular will top the list of capital investments. Many hotels are integrating mobile booking, mobile keys, mobile payments and mobile check-in into their operations. Other hotels are emphasizing the in-room experience, boosting bandwidth and upgrading flat screen TVs to more easily interface with guest mobile devices. And though not yet mainstream, there are many exciting technology developments on the near horizon. The Internet of Things (loT) is taking form in some places, and can be found in guest room control systems, voice activation systems, and in wearable sensors that can be used for access and payment options. Virtual reality headsets are available at some hotels so guests can enjoy virtual trips to exotic locations or if off-property, preview conference facilities and guest rooms. How long will it be before a hotel employs a fleet of robots for room service, or utilizes a hologram as a concierge, or installs gesture-controlled walls that feature interactive digital displays? Some hotels are already using augmented reality for translation services, or interactive wall maps, or even virtual décor. This pace of innovation is challenging property owners and brands to stay on top of the latest technology trends while still addressing current projects. The January Hotel Business Review will explore what some hotels are doing to maximize their opportunities in the mobile technology space.