In Las Vegas, Nevada, gambling operations are subject to regulatory control by the
Nevada State Gambling Control Board,
the Clark Country Nevada Gaming & Liquor Licensing Board, and
City government regulations .
The laws, regulations & supervisory procedure are based on public policy concerned with prevention of unsuitable persons from having direct or indirect involvement with gaming at any time.
Core Competency is casino gaming.
Need to focus its efforts in Las Vegas, Atlantic City and Mississippi.
For years, analysts have questioned the ability of gaming industry to continue high growth as industry matures.
Circus enterprise faces the risk of maintaining high growth in mature industry.
Decrease in Net Income.
In 1974- Purchased by Bennet and Penington – Casino gaming.
In 1979 - Circus Circus purchased Slots-A-Fun.
In 1982 – remodeled Circus Circus.
In 1983 – went public - 0ffering four million shares on the New York Stock Exchange.
In 1983 - extended the operations in Nevada, purchasing the Edgewater Hotel and Casino on the Colorado River in Laughlin, Nevada.
In 1984 - purchased the Colorado Belle Casino - $4 million.
In 1985 - expanded the Reno facilities - constructing a 29-story hotel tower, called Circus Skyrise.
In 1990 – opened Excalibur.
In 1991 - earned $84.3 million on sales of nearly $620 million.
In 1993 – opened Grand Slam Canyon – amusement park.
In 1995 - Acquisition of privately held Gold Strike Resorts Inc. - $500 million
In 1999 - $950 million upscale Mandalay Bay resort opens on the Strip; company changes its name to Mandalay Resort Group.
To become the first of a new generation of casino operators who saw their business not as an offshoot of a slightly shady underworld practice, but as an entertainment franchise designed to attract people of all income levels and all ages.
Circus Circus Enterprises, Inc. is in the business of entertainment, with its core strength in casino gaming.
Provide customers with entertainment that is pure play and fun.
Look for innovations to improve customers' experience.
Commit to being a leader.
Attract family vacationers with fun for parents and children.
In the initial phase, company used to focus on “low roller”.
Later, it started focusing on “middle roller”.
Strong financial position
Innovative product & Marketing
Experienced management team.
Theme resort concept.
Ability to compete in the fast changing Las Vegas market.
Theme park development.
Circus has traditionally attempted to attract the "low roller”. It has also ability to attract “high roller”.
Economic cycle sensitivity.
Strict governmental regulations pertaining to the gaming industry.
Change in laws, regulations & procedures could have an adverse effect on any gaming operations.
Casino gaming operations provide ½ of total revenue.
Expansion of competition is eroding Circus's market.
Ability to attract high roller prospects.
Aims more at the middle income gambler & family oriented vacationers as well as upscale traveler and player.
Development of theme resort concept – new concept.
Expansion and diversification available due to a growing industry
Financial performance :- Circus casinos have the low revenue relative to its competitors.
Las Vegas focuses on catering to higher-end rollers, while the company has targeted family vacationers .
Company has geared all of their casinos based on the family concept and has remodeled their casinos to fit its customer base.
Circus is facing increased competition from traditional competitors who are imitating some of their business strategies .
The latest mergers between ITT Corporation and Starwood Lodging Trust, has brought great competition to Circus.
Growth in the gambling industry has led to geographical expansion in recent years ; as a result Circus has been faced with increased competition .
To remain in the business of entertainment.
To stay one of the innovators.
To broaden its market.
To increase its market share
To focus on free cash flow
Aim more at the middle-income gambler, family-oriented vacationer, and the upscale traveler and player.
Promote theme gambling resort concept.
Pursue joint ventures and market analysis of opportunities
Employ growth strategy of acquiring smaller casinos in other states.
Differentiate strategy for high and low rollers
1997 Revenues 1997 Income 1996 Revenues 1996 Net Income Starwood/ITT 6597 249 Hilton Hotels 5316 250 3940 82 Harrah’s Entertainment 1619 99.3 1586 98.9 Mirage Resorts 1546 207 1358 206 Circus Circus 1354 89.9 1247 100.7 Trump Hotel & Casino Inc 1399 -42.1 976 -4.9 MGM Grand 827 111 804 74.5
Purchased as a small & unprofitable casino operations – 1974 - $50,000.
In 1983 – went public – experienced rapid growth & high profitability.
In between 1993 & 1997 – average return on invested capital was 16.5% & generated over $1 billion in free cash flow.
Focus on middle income customer.
Offer customers good value for the cost
Concentrate marketing on repeat customers
Offer a large array of entertainment for customers
Focus on family tourists in advertisements
Research and Development :
Continuously upgrading building and equipment – so need to have state-of-the-art equipment
Realize low profits per square foot of casino
Continuously update facilities
Design to entice family visitors
Use technology to create atmosphere for customers
Circus Circus Enterprise describes itself as in the business of entertainment.
Marketing of its product cater to “low rollers”.
Its rules and regulation complies with regulatory control by city government regulations.
The laws, regulations and supervisory procedures of virtually all gaming authorities are based upon public policy concerned primarily with prevention of unfair practices .
The main market of the company , showing growth was Las Vegas, Nevada.
Las Vegas remains the largest U.S gaming market.
It is a destination market for most visitor.
It attracts overnight resort seeking vacationers.
Gaming revenues are expected to continue to grow.
Currently, in Atlantic City, Donald Trump’s gaming empire holds the largest market share(30%).
The next closest in market share are Caesar’s (10.3%), Tropicana and Bally’s (9.2%), and Showboat(9%).
There remains a number of smaller markets located around the U.S, primarily in Mississippi, Louisiana, Illinois, Missouri and Indiana.
Native American casinos continue to be developed on federally controlled Indian land – constitute only a small portion of overall gaming revenues.