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You Say Gambling, I Say Gaming

By Jeff Hwang - Updated Nov 16, 2016 at 5:18PM

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Don't be mistaken, gaming is an entertainment business.

Is it gambling, or is it gaming? Mortal sin versus healthy entertainment?

While gaming has evolved as an entertainment business, many people still feel that casinos do whatever is possible "to separate you from your money." Fool analyst Mathew Emmert's excellent article yesterday on Vegas Psychology and his first trip to Las Vegas bears this out.

And then there's this one: Reuters reported this morning that the American Indian-run Isleta Casino Resort in New Mexico had pulled a "controversial TV ad that promoted gambling as a financial solution to people who are short on cash or deeply in debt."

Forget the absurdity of that particular ad for a moment.

According to Harrah's Entertainment's (NYSE:HET) 2003 Profile of the American Casino Gambler survey, the average person who gambles is generally financially healthier than those who don't. Though certainly adversely affected, the fact is that gaming isn't aimed at people who can't afford it. And while it may be true that casinos are still trying to get your money, the difference is in how.

Realize that the bulk of Mandalay Resort Group's (NYSE:MBG) revenues at its flagship Mandalay Bay on the Las Vegas Strip comes from its hotel and dining - not gaming. Further, local operators such as Station Casinos (NYSE:STN), Boyd Gaming (NYSE:BYD), and its soon-to-be-acquired Coast Casinos, as well as riverboat casino operators Ameristar Casinos (NASDAQ:ASCA) and Horseshoe Gaming, differentiate themselves from their competitors with non-gaming amenities. This could be anything from multiple dining options, a minor league hockey team, movie theaters, or a blues museum to live entertainment venues.

Even the stuff inside the casinos is more entertaining than threatening.

Take the new video slots for example. These machines -- including International Game Technology's (NYSE:IGT) Cops and Donuts, Little Green Men, and Cleopatra -- have helped spur the growth in penny- and nickel-denomination slot play that has boosted the profitability of virtually every casino in America. While they might be addicting, these machines and their interactive bonus games have almost as much in common with Sony (NYSE:SNE) PlayStation 2 games from Electronic Arts (NASDAQ:ERTS) and Activision (NASDAQ:ATVI) as they do with traditional slots.

The bottom line is that many casinos today don't market strictly to "losers." With the obvious exception of that particular casino in New Mexico, many operators today compete by offering entertainment value for your dollar.

Give us your take on the Gamblin' Fools discussion board.

Fool contributor Jeff Hwang owns shares of Ameristar Casinos and Electronic Arts.

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Stocks Mentioned

Electronic Arts Inc. Stock Quote
Electronic Arts Inc.
EA
$128.97 (0.39%) $0.50
Sony Corporation Stock Quote
Sony Corporation
SONY
$87.07 (-0.71%) $0.62
Boyd Gaming Corporation Stock Quote
Boyd Gaming Corporation
BYD
$54.07 (-4.20%) $-2.37
International Game Technology Stock Quote
International Game Technology
IGT
$20.11 (-6.55%) $-1.41
Ameristar Casinos Inc. Stock Quote
Ameristar Casinos Inc.
ASCA.DL
Stantec Inc. Stock Quote
Stantec Inc.
STN
$43.24 (-1.93%) $0.85

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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