Estimating the Impact of Las Vegas Poker Rooms on Slot and Table Game Business Volumes

Abstract

The casino industry’s trade literature is replete with claims that live poker rooms drive other casino business volumes, but the only evidence supporting those claims is anecdotal. Claims of this kind arise because poker’s revenue contributions are often lower than those of other games, despite poker’s current popularity. Still, many operators offer poker rooms because they accept this contribution concept as a basic truth. Using an established theoretical model, this study estimates the effects of poker rooms on slot and table game performance at three different Las Vegas resorts. Although the results were mixed, they raise a serious question about whether the idea of poker as a demand generator is accurate. In only one of the three resorts did the analysis find a significant and positive relationship between poker room business volume and slot and table game play. While these overall results cannot be directly generalized, and casinos may have their own reasons for offering poker rooms, casino managers should reexamine whether their poker rooms represent the highest and best use of casino floor space.