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MGT102 Research ReportIntroduction to Hospitality, Tourism and Events

Juliet Tan

The Historical development of Casinos in Las Vegas and Macau and the positive and

negative impacts they have on modern day society.

MichkaMahabadi00042512T

Due Date: 11/04/2011


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TABLE OF CONTENTS

EXECUTIVE SUMMARY 1

I. INTRODUCTION 2

II. DISCUSSION 2

1.1 Historical Development 2

1.1.1 Las Vegas 2

1.1.2 Macau 2

1.2 Political Factors 3

1.3 Social Factors 3

1.4 Economic Factors 4

1.5 Technological Factors 5

III. CONCLUSION/RECOMMENDATIONS 6

APPENDIX I 7

APENDIX II 8

REFERENCES 10


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EXECUTIVE SUMMARY

There is no destination in the world that better represents the link between gambling and tourism

than Las Vegas, Nevada. Sudden decline in revenue prompted the city to make it seen more as a

family friendly destination rather than an adult playground in the early 1990s. On the other hand, the

opening of Macau is seen as the most significant event for the Las Vegas operators in 25 years

because of the size of the potential market (Lo, 2009). There are many positive and negative impacts

that relate to the creation of casinos, and these impacts are demonstrated throughout the report in

relation to political, societal, economical and technological factors.


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I. INTRODUCTION

Casinos over the years have become a tourist attraction for many places. They have paved

way for establishments of hotel/casino, resort/casino, and even spa/casino. They have answered the

growing number of unemployment, not only to the United States but in other countries as well. The

legalisation of Casinos led to the generation of funds by the government through the amount collected

from these establishments in the form of local taxes. Casinos were built with the intention of offering

people other means of recreation, as the games that they have are intended to make people have

fun. Also some of the biggest casinos, like Las Vegas and Macau, have venues for concerts and

sporting events to meet todays

II. DISCUSSION

1.1 Historical Development

1.1.1 Las Vegas

Nevada was the first state to legalise casino-style gambling, however, it was also the last

western state to ban gaming in the first decade of the 20th

Century. Illegal but accepted, gambling

prospered until 1931 when the Nevada Legislature approved a legalised gambling bill (Torr, 2004).

Prior to World War II major resort growth in Las Vegas was hindered du to lack of economic income.

However, the beginning for future expansion began in 1941 when the El Rancho Vegas Hotel-Casino

was built. The success of the El Rancho Vegas generated a small building boom in the late 1940s

which included the construction of several hotel-casinos bordering the highway leading into Las

Vegas from LA, which is today know as the Las Vegas Strip (Refer to Appendix I).

In the 1950s the city and county community leaders realised the need for a Las Vegas

convention facility. The Las Vegas Convention and Visitors Authority, today is a major player in

attracting more than 28.2 million visitors to Las Vegas in 1994, including more than 2 million

convention delegates (Las Vegas News Bureau, 2011).

During the next few decades, entertainment, along with gambling, built Las Vegas' reputation

as a play-land getaway of the world. People began to gather to the city not just to play slot games,

but also for the fantastic entertainment that was provided throughshows, shopping etc. The hotel-

casinos that followed copied the successful star format for a number of years (Refer to AppendixII).

1.1.2 Macau

Macau has been known worldwide as the Monte Carlo of the Orient since gambling was

legalised in 1847, in attempt to generate revenues for the government. A licensing system for the fan-

tan houses (Chinese gambling houses) was introduced in the late 19th Century.


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The first casino monopoly concession was granted to the Tai Xing Company in

1937. However, the company was too conservative to fully exploit the economic potential of gambling.

In 1962, the industry saw a major breakthrough when the government granted the Sociedade de

Turismo e Diverses de Macau (STDM), being the monopoly rights to all forms of gambling. The

STDM introduced western-style games and modernised the marine transport between Macau and

Hong Kong, generating millions of gamblers from Hong Kong every year. Today, there are 16

casinos operated by the STDM, and they are still crucial in the casino industry in Macau, but in 2004,

the opening of the Sands Macau ushered in the new era (Macau Casinos, 2011).

1.2 Political Factors

Casino gambling and politics have always been closely linked. Concerns about influence

publicising and bribery are major issues to many people. Some states ban casino applicants from

making political contributions to state and local candidates (Net Industries, 2011).However, the casino

industry and politicians argue a number of potential benefit from casinos such as employment, high

wages, and consumer benefits. State governments look to casinos for tax revenue and economic

development, as relationships among gambling industries obviously will affect overall tax revenues

(Dunstan, 1997). The tax effect of adding a particular industry will depend on several factors such as

tax rates, relationships with other gambling industries and relationships with non-gambling industries.

The public interest in regulating gaming is obvious. It follows that; casinos operate in a

political context that impact significantly on their overall risk profile.Officials must realise that legal

gambling will attract an unsavoury element that can jeopardize the safety and well-being of the city's

residents and the many visitors who come to gamble (Moffett and Peck, 2001).

Legalised gambling in the United Statesgrew significantly during the latter half of the 20th

Century. Much of this growth stems from a prolonged sequence of state legislation, relaxing

regulations that restricted gambling. This is an important transformation in the regulation of the

economy. (Raymond, 2000)

1.3 Social Factors

Las Vegas has not always been seen as a family orientated choice of leisure; however, duringthe sudden shift to family entertainment, the Las Vegas Convention and Visitors Authority focused

their marketing on families. This resulted in the casinos spending $12 billion to completely refurbish

most hotels on the Las Vegas Strip to include entertainment during the 1990s (Gronolsa & Mustardb,

2001). A vast increase in visitors and guests resulted in the increase of magic shows, circus events,

and carnival rides, rather than topless shows and strip clubs. On the other hand, the change was not

bringing in more gambling revenue, and it was being noticed by the casino owners.However, during


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the late 1990s, the city's image began to change again. The casinos began getting serious

competition from strip clubs located off the Strip, which were bringing in millions of dollars from

conventioneers.These changes in Casino image resulted in what people find socially acceptable but

also how much revenue the city was bringing in, also impacted on the change considerably.

The topic of gambling has always been seen as a socially unacceptable activity.TheAustralian Productivity Commission found that between five and ten people are affected by every

individual who is a problem gambler, including spouses,other family members, friends, co-workers as

well as those involved in financial relationships (Rieth, 2006).Macaos gaming industry for example

has experienced dramatic growth for 8 years, yet with certain social costs due to compulsive gambling

(Lo, 2009).

Research has found that Las Vegas has the highest rate of suicide in America, for both

residents and visitors (Phillips 1997).According to Dr David Phillips, Las Vegas displays the highest

levels of suicide in the nation, both for residents of Las Vegas and for visitors to that setting. (Phillips,

Welty & Smith, 1997)Gambling-related suicides are increasingly common, as legalised gamblingcontinues to spread throughout America (Hills, 2010).

1.4 Economic Factors

Besides its image problems, Las Vegas faces other challenges as well.Some people view

gambling as a nonthreatening form of entertainment. Whether legal or not, many people gamble in

various forms, and suppliers, acting as a host seek profits by offering them (the guests) gambling

opportunities. The practice has deep roots, and references to it date across cultures to ancient times

(Culin, 1992).

Like any industry in a capitalist society, casinos are in business to make money. Successful

businesses (casinos)make billions of dollars each year for the companies, corporations, investors,

and Native American tribes that own and operate them. State and local governments also reap casino

revenues in the form of taxes, fees, and other payments.

One of the most important areas of research to which economists can contribute is the social

cost of gambling. Any harm that can remotely be connected to gambling (social cost) is typically the

focus by media and politicians. Social costs, may be a result of the once-typical illegal status of

casinos, and are closely linked to occurrence of pathological gambling, which would in turn decrease

in combined societal wealth.In Macau, for example, casino capitalism stimulates economic growth,

provides employment, and strengthens the post-colonial state during the period of economic boom.

On the other hand, casino capitalism can widen the income gap between the rich and the poor,

generate addictive gambling, and de-legitimise the post-colonial state in Macau during the global and

regional economic downturn (Gu & Tam, 2011).


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1.5 Technological Factors

As the technological world changed, Nevada games, machines and gambling styles evolved

in order to keep pace with not only the more sophisticated and affluent players, but also with the

technological advancements of the world. Many changes occurred from the 50s right through to the

present day, such asKeno writers no longer used black indelible ink brushes to mark of eachindividual ticket, mechanical slot machines, became collectablesin the age of electronic gaming and

the silver dollar, once the coin of the realm in Nevada, was no longer used, and instead was replaced

in casinos with silver-dollar-size tokens.

During the 60s, the computerised dollar slot machines of today, which are capable of

accepting multiple tokens simultaneously, replaced the old mechanical penny/nickel slot machines.

Also, as Las Vegas started to evolve into what it is seen as today, the size of jackpots grew from a

few hundred dollars to $10 million dollars. These jackpots are now also paid on a computerised

statewide network of slot machines.

In the 70s, technological advancements included video machines, which substituted television

screens for reels and computerised slot machines, which featured a vast variety of games,which

improved the status of casinos in their era. In the present day, most slot machines now accept credit-

card style gambling, creating an easier, and more accessible style of gambling. Casinos still continue

to evolve towards the high-tech venture with every relevant breakthrough in modern technology.


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Conclusion/Recommendations

Supporters of casino gambling consider it part of the leisure/entertainment sector, like

amusement parks or movie theaters. In a casino, participants exchange their money for a good time.

Those who support casino gambling generally do not see it as a moral issue.

Those who are opposed to casinos are less unified in their opinions. Some disapprove of

gambling. Others are wary of an industry that was associated with mobsters, swindlers, and corrupt

politicians throughout much of Americas history. Still others believe that casinos are a bad idea

because they provide a place for those who are prone to problem gambling to act on those urges.

However, many social reformers believe in protecting people from their own bad judgment. (Net

Industries, 2011)

Some suggestions in the improvement of negative impacts may include Casino management

tightening their security more; and imposingstricter rules and regulations on their premises. It is not all

for profit; they should also do their part to stop the negative effects of their business to people, them

being a member of the community. Also, the government, despite casino legalisation, should impose

limits and regulate the number of casinos per area, in order for law enforcers to be able to monitor all

activities within the area.


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APPENDIX I

Hotels/Casinos along the Las Vegas Strip (Las Vegas Blvd)


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APPENDIX II

Name Year of Operation20th Century 1977 - 1978Aladdin 1966 - 1997, 2000 - 2007Bally's 1986Barbary Coast 1978 - 2007Boardwalk 1977 - 2006Bonanza 1967 - 1973Bourbon Street 1985 - 1996, 1998 - 2005Caesars Palace 1966 - PresentCasino Royale 1992 - PresentCastaways 1963 - 1987Circus-Circus 1968 - PresentContinental 1981 - 1997Debbie Reynolds 1993 - 1996Desert Inn 1950 - 2000Dunes 1955 - 1993El Rancho 1982 - 1992

El Rancho Vegas 1941 - 1960Ellis Island 1988 - PresentExcalibur 1990 - PresentFlamingo 1946 -PresentFlamingo Capri 1958 - 1978Fontainebleu 2009 - PresentFrontier 1967 - PresentGold Coast 1986 - PresentGreek Isles 1996 - PresentHacienda 1956 - 1996Hard Rock 1995 - PresentHarrah's 1992 - Present

Holiday 1973 - 1992Hooters 2006 - PresentImperial Palace 1980 - PresentInternational 1969 - 1971Key Largo 1997 - 2005King 8 1974 - 1998Klondike 1982 - 1983, 1996 - 2006La Mirage 1986 - 1989Landmark 1967 - 1990Las Vegas Hilton 1971 - PresentLast Frontier 1951 - 1956Little Caesar's 1970 - 1994Luxor 1993 - PresentMarina 1975 - 1990Maxim 1977 - 2001MGM Grand 1973 - 1986MGM Grand 1993 - PresentMirage 1989 - PresentMonte Carlo 1996 - PresentNew Frontier 1955 - 1969, 1998 - PresentNew York--New York 1997 - PresentNob Hill 1979 - 1990


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Orleans 1996 - PresentO'Shea's 1989 - PresentPaddlewheel 1983 - 1991Planet Hollywood 2007 - PresentRio 1989 - PresentRiviera 1955 - Present

Royal 1971 - 1988, 1990 - 1997Royal Inn 1970 - 1979Sahara 1952 - PresentSan Remo 1989 - 2006Sands 1952 - 1962Sans Souci 1955 - 1962Silver Bird 1976 - 1982Silver City 1975 - 1999Silver Slipper 1950 - 1988Slots-A-Fun 1973 - PresentSports World 1997 - PresentStardust 1958 - 2006Stratosphere 1996 - PresentThunderbird 1948 - 1976Town Hall 1985 - PresentTreasure Island 1993 - PresentTreasury 1979 - 1982Tropicana 1967 - PresentVacation Village 1990 - 2002Vegas World 1979 - 1995Westin Casuarina 2003 - PresentWestward Ho 1971 - PresentWynn Las Vegas 2005 - Present


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REFERENCES

Culin S. 1992. Games of the North American Indians, University of Nebraska Press: Lincoln.

Dunstan, R. 1997 Gambling in California. California Research Bureau. Accessed 28 March 2011,

Gronolsa, E.L. & Mustardb, D.B., 2001. Business Profitability versus Social Profitability: Evaluating

Industries with Externalities - the Case of Casinos. Material and Decision Economics, 22, 143-183.

Accessed 28 March 2011,

Gu, X & Tam, P.S. 2011. Casino Taxation in Macau: An Economic Perspective, Journal of

Gambling Studies.

Hills, C. 2010. Quick Facts: Gambling and Suicide. Citizenlink. Accessed 28 April 2011,

http://www.citizenlink.com/2010/06/15/quick-facts-gambling-and-suicide

Las Vegas News Bureau, 2011. Las Vegas Facts and History. Accessed 6 April

2011,

Lo S. (2009). Casino Capitalism and its Legitimacy Impact on the Politico-administrative State in

Macau. Journal of Current Chinese Affairs. 1, 19-47.

Macau Casinos | Ola Macau Travel Guide, 2011. Changes among Macau Casinos. Accessed 6

April 2011, .

Moffett, T. and Peck, D.T. 2001. When Casino Gambling Comes to your Hometown. The FBI Law

Enforcement Bulletin. Accessed 6 April 2011,

Net Industries, 2011, Casinos: The Effects of Casinos and Crime. Accessed 6 April 2011, Casinos: The

Effects of Casinos - Crime

Net Industries, 2011, Casinos: The Effects of Casinos National Public Opinion. Accessed 6 April

2011,

Phillips, D.P., Welty, W., and Smith, M. 1997 . Elevated Suicide Levels Associated with Legalized

Gambling. Suicide and Life-Threatening Behaviour, 27, p. 373.

Raymond, D. 2000. The Political Economy ofGambling Regulation, Sauer Clemson University.

Accessed 27 March 2011.


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Rieth, G., 2006, Research on the Social Impacts ofGambling Final Report, The Scottish Centre

for Social Research (ScotCen), accessed on 28 March 2011,

.

Torr, J.D. 2004. Introduction Opposing Viewpoints: Gambling. San Diego: Greenhaven Press.

Accesses 6 April 2011, .

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