PHL 320: SWOT And Strategy Evaluation Gambling
SWOT and Strategy Evaluation Gambling
On Gambling and Casinos
Benjamin Bragd
PHL/320(BSGE1HBQR7)
July 6, 2015
John Pries
SWOT and Strategy Evaluation Gambling
Introduction
Some people dream of monster trucks, yachts, and extravagant homes with horses running at large. I often dream of having these things and have confidence that others dream of these things too. Have you heard one of the following sayings, “The grass is always greener on the other side of the fence” or “Trying to keep up with the Joneses”? Financial resources, planning, time, and hard work are some factors that help make dreams come true. For some, dreams are placed on hold when financial resources are limited. As a result, some people turn to gambling …show more content…
at casinos in hopes of quickly increasing their financial resources. All they need to do is win one more time or double down and in their minds they’ll have enough financial resources to pursue their dream(s); however, some people cannot just stop after one more time. The casinos hope and bet on you can’t. It turns into a perpetual never-ending cycle. Looking at the SWOT chart below will help define this a little better.
Strengths
Stable Industry
Growth Technology
Payback to Small Business
Weaknesses
Capital- intensive
Cost structure
Opportunities
New Games
New Markets
Money to Education
Threats
Bad Economy
Internet Gambling
Underage Gambling
The company strengths:
In the United States, casinos are opening across the U.S., lottery retailers are getting bigger, and you can find them in every gas station and grocery store in towns that has legalized gambling.
Stable Industry: This rate is growing rapidly as gambling has become increasingly more acceptable than it has been. The retailers are getting a percentage if they sell a winning ticket. In the state of Michigan a lottery retailer receives 2% percent of the winning lotto ticket.”[1]
Technology Growth: The technology has increased drastically so much that Bally’s Technologies, are producing new machines every year. Casinos generate cash by selling the old machines after converting the machines into token machines.
Payback to Small Business: The retailers are getting a percentage if they sell a winning ticket. Small business are encourage to sell lottery tickets, based on the kickback percentage of each winning ticket sold. Small businesses may also benefit from supplemental sales of non-lottery transactions. For example, my friend goes to his neighborhood 7-Eleven to purchase lottery tickets, because he can also purchase gas, milk, and other items.
The company strengths external positive:
New Games: Since the majority of games are slots and video poker, new games are computerized. The development of new games is relatively easy. New game manufacturers just mask the old game with a new patch (skin) and overlay it with the new patch. The development and formatting of the new games is very similar to PC games. Bally’s Technologies, introduces new models each and every year.
New Market: the Market for new games is growing as fast as the new games provided video poker and video slots. Some states mandate a portion of sales to schools (education) and road repairs & upgrades. In a time where our educational system needs extra money due to budget cuts, this can benefit our children’s future.
Weakness how to improve on them:
Capital-intensive Companies have put a lot of resources into casinos, and they want returns on their investment. For a casino to grow it will need to raise substantial funds. Given the capital-intensive nature of this industry, cash flow is crucial to service debt, while funding day-to-day operations and expansion. Poor economic conditions hamper cash flow, and debt interest and maturity obligations become more significant; taking funds away from strategic development programs. When under such pressure, the management of casinos often implement a number of steps to free up some cash, such as staff layoffs, efficiency improvements, reduced capital spending, and the sale of non-core assets and minority interests. The strongest members of the industry can take advantage of stressful periods by acquiring lucrative operations, fully funding development projects, and pursuing market share. [2]
Cost structure: When the global economy is experiencing an upswing, Hotel/Gaming companies benefit from increased consumer leisure and corporate event spending.
As volume and operating profits strengthen, managements free up outlays for property upgrades and expansion, as well as for product and service development. It 's important for companies not to take on too much leverage, which can be detrimental when the cycle turns. Investors should note whether a company 's annual cash flow sufficiently covers spending plans and dividends paid, if any, to stockholders. Also, there should be enough cash available to meet upcoming debt maturities. …show more content…
[2]
Threats how to minimize them:
Even with a bad economy, with the constant up and down of the unemployment, the average person taking the trip to Vegas, Atlantic City, and the gulf coast is greatly reduced by the tightening of the purse strings. Therefore, the average traveler will not be spending that extra money. Casinos are challenged to bring that average traveler into the casino doors.
Internet Gambling: The new phenomenon, Internet Gambling or Online Gambling, is up and coming and happening across the country. Especially online poker. Online poker has enjoyed rising popularity “For example, in the state of Michigan a lottery retailer receives 2% percent of the winning lotto ticket.”
In the late 1990s. In the face of an economic slump last year, Americans spent an estimated $64 billion gambling, according to the consultants Christiansen Capital Advisors, up 5% from 2000. That’s more than they spend on movie tickets, theme parks, spectator sports and video games combined. Assorted gambling initiatives have provoked sustained battles–internet wagering remains a particularly contentious issue–but the trend is clear. America’s neighbors aren’t oblivious of this. Canada had a prohibition against Vegas-style casinos a decade ago; today over a hundred casinos of all sizes dot the nation. Mexico outlawed casinos in 1934; today the government is proposing to legalize ten of them in tourist resorts. [3]
The Response
Gambling institutions will always be here, as long as, there is that ever growing itch to pull the one armed bandit to change someone’s luck No matter what the economy is like, Casino’s will always have people rolling the dice to try to change their luck and lives.
Gambling has come a long way since it was first invented. Now society has started to change its view on gambling. Casinos are becoming a vacation place for fun and adventure for the whole family. For example, some casinos have water parks for the kids, rollercoasters, and a circus. Often, people take vacations to places such as Las Vegas and to Atlantic City to be able to gamble while they are there. Offering activities for the entire family (water parks, shows, golfing, shopping, and sight-seeing) will bring in the casino’s target demographics. Just think if you could entertain like Disney, and play like a kid during the day and adult at
night.
REFERENCES
1. www.michigan.gov/.../lottery/Retailer_Commissions_20.SLS.1
2. http://www.valueline.com/Stocks/Industries/Industry_Analysis__Hotel_and_Gaming.aspx#.V
3. http://www.forbes.com/global/2002/0429/024.html
On Gambling and Casinos
Benjamin Bragd
PHL/320(BSGE1HBQR7)
July 6, 2015
John Pries
SWOT and Strategy Evaluation Gambling
Introduction
Some people dream of monster trucks, yachts, and extravagant homes with horses running at large. I often dream of having these things and have confidence that others dream of these things too. Have you heard one of the following sayings, “The grass is always greener on the other side of the fence” or “Trying to keep up with the Joneses”? Financial resources, planning, time, and hard work are some factors that help make dreams come true. For some, dreams are placed on hold when financial resources are limited. As a result, some people turn to gambling …show more content…
at casinos in hopes of quickly increasing their financial resources. All they need to do is win one more time or double down and in their minds they’ll have enough financial resources to pursue their dream(s); however, some people cannot just stop after one more time. The casinos hope and bet on you can’t. It turns into a perpetual never-ending cycle. Looking at the SWOT chart below will help define this a little better.
Strengths
Stable Industry
Growth Technology
Payback to Small Business
Weaknesses
Capital- intensive
Cost structure
Opportunities
New Games
New Markets
Money to Education
Threats
Bad Economy
Internet Gambling
Underage Gambling
The company strengths:
In the United States, casinos are opening across the U.S., lottery retailers are getting bigger, and you can find them in every gas station and grocery store in towns that has legalized gambling.
Stable Industry: This rate is growing rapidly as gambling has become increasingly more acceptable than it has been. The retailers are getting a percentage if they sell a winning ticket. In the state of Michigan a lottery retailer receives 2% percent of the winning lotto ticket.”[1]
Technology Growth: The technology has increased drastically so much that Bally’s Technologies, are producing new machines every year. Casinos generate cash by selling the old machines after converting the machines into token machines.
Payback to Small Business: The retailers are getting a percentage if they sell a winning ticket. Small business are encourage to sell lottery tickets, based on the kickback percentage of each winning ticket sold. Small businesses may also benefit from supplemental sales of non-lottery transactions. For example, my friend goes to his neighborhood 7-Eleven to purchase lottery tickets, because he can also purchase gas, milk, and other items.
The company strengths external positive:
New Games: Since the majority of games are slots and video poker, new games are computerized. The development of new games is relatively easy. New game manufacturers just mask the old game with a new patch (skin) and overlay it with the new patch. The development and formatting of the new games is very similar to PC games. Bally’s Technologies, introduces new models each and every year.
New Market: the Market for new games is growing as fast as the new games provided video poker and video slots. Some states mandate a portion of sales to schools (education) and road repairs & upgrades. In a time where our educational system needs extra money due to budget cuts, this can benefit our children’s future.
Weakness how to improve on them:
Capital-intensive Companies have put a lot of resources into casinos, and they want returns on their investment. For a casino to grow it will need to raise substantial funds. Given the capital-intensive nature of this industry, cash flow is crucial to service debt, while funding day-to-day operations and expansion. Poor economic conditions hamper cash flow, and debt interest and maturity obligations become more significant; taking funds away from strategic development programs. When under such pressure, the management of casinos often implement a number of steps to free up some cash, such as staff layoffs, efficiency improvements, reduced capital spending, and the sale of non-core assets and minority interests. The strongest members of the industry can take advantage of stressful periods by acquiring lucrative operations, fully funding development projects, and pursuing market share. [2]
Cost structure: When the global economy is experiencing an upswing, Hotel/Gaming companies benefit from increased consumer leisure and corporate event spending.
As volume and operating profits strengthen, managements free up outlays for property upgrades and expansion, as well as for product and service development. It 's important for companies not to take on too much leverage, which can be detrimental when the cycle turns. Investors should note whether a company 's annual cash flow sufficiently covers spending plans and dividends paid, if any, to stockholders. Also, there should be enough cash available to meet upcoming debt maturities. …show more content…
[2]
Threats how to minimize them:
Even with a bad economy, with the constant up and down of the unemployment, the average person taking the trip to Vegas, Atlantic City, and the gulf coast is greatly reduced by the tightening of the purse strings. Therefore, the average traveler will not be spending that extra money. Casinos are challenged to bring that average traveler into the casino doors.
Internet Gambling: The new phenomenon, Internet Gambling or Online Gambling, is up and coming and happening across the country. Especially online poker. Online poker has enjoyed rising popularity “For example, in the state of Michigan a lottery retailer receives 2% percent of the winning lotto ticket.”
In the late 1990s. In the face of an economic slump last year, Americans spent an estimated $64 billion gambling, according to the consultants Christiansen Capital Advisors, up 5% from 2000. That’s more than they spend on movie tickets, theme parks, spectator sports and video games combined. Assorted gambling initiatives have provoked sustained battles–internet wagering remains a particularly contentious issue–but the trend is clear. America’s neighbors aren’t oblivious of this. Canada had a prohibition against Vegas-style casinos a decade ago; today over a hundred casinos of all sizes dot the nation. Mexico outlawed casinos in 1934; today the government is proposing to legalize ten of them in tourist resorts. [3]
The Response
Gambling institutions will always be here, as long as, there is that ever growing itch to pull the one armed bandit to change someone’s luck No matter what the economy is like, Casino’s will always have people rolling the dice to try to change their luck and lives.
Gambling has come a long way since it was first invented. Now society has started to change its view on gambling. Casinos are becoming a vacation place for fun and adventure for the whole family. For example, some casinos have water parks for the kids, rollercoasters, and a circus. Often, people take vacations to places such as Las Vegas and to Atlantic City to be able to gamble while they are there. Offering activities for the entire family (water parks, shows, golfing, shopping, and sight-seeing) will bring in the casino’s target demographics. Just think if you could entertain like Disney, and play like a kid during the day and adult at
night.
REFERENCES
1. www.michigan.gov/.../lottery/Retailer_Commissions_20.SLS.1
2. http://www.valueline.com/Stocks/Industries/Industry_Analysis__Hotel_and_Gaming.aspx#.V
3. http://www.forbes.com/global/2002/0429/024.html