c a si n o                                                      c a si n o                                                ...
Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010CONTENT            Section                        ...
Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 20101. Purpose of StudyResorts World Sentosa casino, (...
Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 20102. Executive SummaryThe Casino Revenue Potential s...
Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010    4.   Game Performance    The study of RWS’s ga...
Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 20103. Scope of StudyThe following describes the scope...
Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010        To analyse data, estimate the key variable...
Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 20104. Methodology4.1 E stimated T he oretica l Wi n M...
Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 20104.2 Setti ng t he Ho use Ed ge % f or purp os e of...
Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010Table 4. 1: H o us e Ed ge % sta nda rds fo r RW S...
Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010Table 4.1 continued: Game                         ...
Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 20104.3 T he Statistical Ap pr oac hThe basic theory o...
Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010The following describes stages of survey, data col...
Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010    ii. Ca si no Visit or A rri val S urve y      ...
Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010        3. Data collected – Table limit, Estimated...
Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 20105. Findings5.1 Ab o ut RW S Casi no O perati o ns....
Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010    5. 1. 2 Ope rati ng H o ur s a nd Pattern     ...
Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010        C hart 5.1: Ope rati ng Ca pacity b y Pe r...
Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010    5.1. 3 Types of Games        The major games i...
Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010    5.1. 4 P hysical Tab le C o unt ( Co mmo n Gam...
Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010        Chart 5.2: RWS Common Gaming Table Games –...
Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010Table 5.3: RWS Common Gaming – Table Games & Gamin...
Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 20105.1. 6 RW S C omm on Gami ng - Ope rati ona l C ap...
Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010            It can be further assumed that RWS may...
Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 20105.2 RW S Ca si no Vi sit or Ar riva l St udy    5....
Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010        Table 5. 5: RW S Casi no – V isit or Proje...
Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010    5.2. 2 Dail y Vi sit or Ar ri val Pattern     ...
Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 20105.3 RW S Ca si no R eve nu e Pro je cti on – Co mm...
Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010Table 5. 6: RW S Co mmo n G ami ng Statistic al T ...
Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010                   Tabl e 5.7 pro vid es com paris...
Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 20105.4 RW S Ga m e P er for m an ce Stu dy    5.4. 1 ...
Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010        C hart 5.4: RW S Game s pe r Ho ur – C omm...
Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010    5.4. 2 Ga me H andle (T urno ver )        We c...
Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010           C hart 5.5: RW S A ve rag e Wa ger per ...
Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010    5.4. 3 Ga me Margi ns a nd Profitab ilit y    ...
Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010           C hart 5.6: RW S T he oreti cal Wi n p ...
Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 20106. Conclusions and DiscussionThe core purpose of t...
Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010                   The nine-box baccarat (Bean Tab...
Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010    6.3 Reve nue per fo rma nce        Conclusion:...
Casino Revenue Potential Study Model By Ramachandar Siva
Casino Revenue Potential Study Model By Ramachandar Siva
Casino Revenue Potential Study Model By Ramachandar Siva
Casino Revenue Potential Study Model By Ramachandar Siva
Casino Revenue Potential Study Model By Ramachandar Siva
Casino Revenue Potential Study Model By Ramachandar Siva
Casino Revenue Potential Study Model By Ramachandar Siva
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Casino Revenue Potential Study Model By Ramachandar Siva

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The paper provides a statistical prediction model applied to project a new casinos revenue potential based on visitor count, patronage, operating patterns, game mix , table limits, actual wagering pattern etc. Live data collection on key parameters were conducted and a revenue prediction model was designed to apply theoretical assumptions.

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Transcript of "Casino Revenue Potential Study Model By Ramachandar Siva"

  1. 1. c a si n o c a si n o revenue c a si n o revenue potential c a revenue si n o potential c a s ino revenue c a s ino c a si n o potentialrevenue c a si n o potential revenue potential revenue c a s ino potential revenue c a s ino c acsai n on o r esorts wo rl d sentosa si r esorts wo rl d sentosa potential revenue revenuepotential revenue revenue potentialcacs ino potential a s ino potential potential casino c a srevenue r esorts wo rl d sentosa ino revenue revenueac anson o i r esorts wo rl d sentosarevenue c s irevenue potential potential revenuepotential potential casino r esorts wo rl d sentosa c a s irevenue no c a s i n o revenuer esorts wo rl d sentosa casino revenue revenue potential potentialn o casi c a srevenue ino revenue rws casino revenue potential study ram achand ar si va for D eutsc he Bank R ese arch 25 april 2010
  2. 2. Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010CONTENT Section Page 1. P urp o se o f St ud y 2 2. Exec utive S umma r y 3 3. Sco pe of St ud y 5 3.1 Overview of RWS casino operations 5 3.2 RWS casino visitor pattern 5 3.3 RWS casino revenue projection 5 3.4 RWS casino table games performance 6 4. Metho do lo g y 7 4.1 Estimated Theoretical win model 7 4.2 Setting House Edge % for the study 8 4.3 The Statistical approach 11 i. Casino Operations survey 12 ii. Casino visitor arrival survey 13 iii. Table Games live action survey 13 5. Fi ndi ngs 15 5.1 About RWS Casino Operations 15 5.1.1 General overview of casino 15 5.1.2 Operating hours and pattern 16 5.1.3 Types of Games 18 5.1.4 Physical table count 19 5.1.5 Electronic Gaming Tables & Slot Machines 20 5.1.6 RWS Common Room – operational capacity April 2010 22 5.2 RWS Casino visitor arrival study 24 5.2.1 Casino visitor arrival projection 24 5.2.2 Daily pattern of visitor arrival 26 5.3 RWS casino revenue projection – common gaming 27 5.3.1 Monthly and Annualised statistical theoretical win 27 5.3.2 Revenue contribution by game sector 27 5.3.3 Considerations for projection of annualized casino revenue 28 5.4 RWS Game Performance Study 30 5.4.1 Game efficiency 30 5.4.2 Game Handle ( Turnover ) 32 5.4.3 Game margins and profitability 34 6. Co ncl usi on and Dis cussi o n 36 6.1 RWS Casino Operations Review 36 6.2 Casino Visitors 37 6.3 Revenue Performance 38 6.4 Study Limitations 41 7. S ug gesti o ns t o e nhanc e the TW Projecti o n M od el 42 End Notes 45 Appendix 1a Gaming Capacity – Game Distribution Appendix 1b Gaming Capacity – Table Spread Appendix 2 Casino Visitor Analysis Appendix 3a RWS Statistical Revenue Projection Appendix 3b RWS Revenue Projection 2010 & 2Q10-1Q11 Appendix 4 RWS Key Revenue Performance Indicators Appendix 5 Visitor Survey Plan Appendix 6 Table games live action survey plan ICG School of Casino & Hospitality Management, 200, Turf Club Road #02-03/09, Singapore 287994 1 tel: (65) 64671890 fax: (65) 64698801 email: corporate@icgtraining.com www.icgtraining.com
  3. 3. Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 20101. Purpose of StudyResorts World Sentosa casino, (RWS), opened on the 14th February 2010. In the two monthssince, the success and revenue potential of the casino has been open to speculations, asgaming statistics are not publicly available yet.The purpose of this study is to project the estimated revenue potential of casino gamingoperations at Resorts World Sentosa (RWS) for the first year of operations. A survey of thecasino operations is undertaken to gather information required to estimate the key performanceindicators, which will be used to tabulate and provide revenue projections. This will form thebasis to evaluate the casino’s revenue potential. This paper includes a preliminary study todefine operational capacity and visitor arrivals to provide a broader perspective of the RWScasino operations at its infancy. ICG School of Casino & Hospitality Management, 200, Turf Club Road #02-03/09, Singapore 287994 2 tel: (65) 64671890 fax: (65) 64698801 email: corporate@icgtraining.com www.icgtraining.com
  4. 4. Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 20102. Executive SummaryThe Casino Revenue Potential study of Resorts World Sentosa casino was completed in the month of April2010, approximately 2 months after its opening. Floor survey and live games data collection was th thconducted between the 5 and 10 of April. This study is restricted to RWS’s mass gaming operations,where public access allowed the survey to be conducted. Findings and projections of revenue are solelyreflecting the common gaming capacity of RWS. The following are summary of findings. 1. Overview of RWS casino The RWS casino offers approximately 365 gaming tables and 1200 gaming machines. The varieties of games offered are similar to Genting. All the table games and electronic table games in operation are well received. Study confirms that RWS is running at less than 50% of its full operational capacity in common gaming division. The lowest table opening count was observed at 69 tables and 197 at the highest. Observations suggest that demand exceeds supply of gaming at RWS during peak and high- peak periods. In general, the main games of Baccarat and Roulette are affected by operating hours offered causing overcrowding and heavy chip action. Improvements to match supply to demand will be a key concern for RWS over the next 3 months. Overall the casino operations and product is deemed exceptional and world-class in presentation. 2. Casino Visitors The study shows that the casino patronage is above average. Visitor rate is estimated at 22,000 for a typical weekday and 42,000 on Saturday; which translate to approximately 780,000 per month and 10.1 million per annum of visitors. (Factoring of repeat entry of visitor (on survey day) probabilities for a degree of correction in our analysis provides an estimate of 480,000 per month and 6.2 million per annum.) These estimates are conservative, as it does not take into account growth of visitor arrivals and positive fluctuations due to holiday periods. Apart from consideration of an adjustment expected when Marina Bay Sands opens in late April 2010, it can be concluded that to date the RWS casino operations in Singapore is successful in attracting both local (45% overall) and foreigners (55% overall). 3. Casino Revenue Projection The statistical theoretical win projection model, which uses the estimate of handle, offers the best approximation of revenue potential for an active casino. The propriety method developed for this study is comprehensive as it takes into consideration a variety of operating factors that impact the handle. The study concludes that the casino capable of generating a daily win of SGD $ 3 million and with an annualized revenue potential of SGD $ 1.1 billion for the mass gaming division. Estimate is based on statistical outcomes of the study for the month of April 2010. The projection does not take into consideration future positive or negative factors that would impact the revenue of the casino. ICG School of Casino & Hospitality Management, 200, Turf Club Road #02-03/09, Singapore 287994 3 tel: (65) 64671890 fax: (65) 64698801 email: corporate@icgtraining.com www.icgtraining.com
  5. 5. Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010 4. Game Performance The study of RWS’s game operations performance provides an insight to the efficiency and related impact on its present revenue generating capacity. This is an extremely rare independent study of the nuts and bolts of an active casino where the technical capabilities are examined. The propriety methodology designed for this study focuses on establishing the statistical values of table games Key Revenue-Performance Indicators that are crucial game efficiency descriptors. The findings conclude that RWS casino is at approximately 40-45% of technical efficiency. The key area of concern is the game pace of major games where overall the operations if at best about 40% of commonly acceptable Games per Hour expectation. The main issue would be inadequate tables to cater for players during peak and high peak periods. The game pace suffers due to overcrowding which increases chip action, further compounded by dealers lacking experience. Other factors that would require fine-tuning are the table limits, the offers of side bets and game procedures. The revenue of Baccarat, Roulette and Tai Sai are the most affected by game pace. These games receive above high-level wagers (Baccarat - $3800 per game and Roulette $2500 per game) thus the game pace is crucial to increase the handle per hour by increasing the game pace. Tai Sai (wager per game $3000) and 3 Pictures (wager per game $2100) are the 2 other games affected by the low win extracting capability caused by low game pace. Overall, it can be concluded that the RWS casino operation has pent-up potential in terms technical revenue generating capabilities. Large increments in game efficiency are expected in the short-term as the casino management fine tunes its operations. There is confidence to suggest that revenue projections have an upside merely due to significant impact from game operation improvements. This report provides detailed analysis and discussions on game performance of RWS casino. ICG School of Casino & Hospitality Management, 200, Turf Club Road #02-03/09, Singapore 287994 4 tel: (65) 64671890 fax: (65) 64698801 email: corporate@icgtraining.com www.icgtraining.com
  6. 6. Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 20103. Scope of StudyThe following describes the scope of the study and report which is in 4 parts: 3.1 RW S casi no o pe ratio n patte r n st ud y. To define the operational parameters of the RWS casino. Design and deploy a survey. Organise information from the survey to present the following: i. Description for the common gaming facility - floor separation and allocation of gaming tables and machines by area. ii. Casino operations demographic – statistics of game types and available tables and gaming machines. iii. Define the current operations capacity against the possible full operating capacity in terms of total operation hours of gaming offered per day by game type. iv. Define tables operating pattern employed by the casino to match fluctuating demand throughout an operational day of 24 hours differentiated by weekday and weekend pattern. 3.2 RW S casi no visit or patter n stud y. To estimate daily visitor volume for weekday and weekend. Design and deploy a survey, data collection and analysis method. To analyse data, tabulate and present estimates of: i. Daily visitor arrival pattern for weekday and weekend. ii. The variance between local and international visitors. iii. Projection of weekly, monthly and annual visitors to the casino. 3.3 RW S casi no r eve nue p r ojecti on. To project the common gaming revenue generating capability of the RWS casino in terms of theoretical win derived from estimated handle. Design a statistical model to project RWS casino’s common gaming revenue. Design and deploy a sampling and data collection method. Data collected from live gaming activity include game pace (hands/hour), total wager per game, number of players per game and table limits. ICG School of Casino & Hospitality Management, 200, Turf Club Road #02-03/09, Singapore 287994 5 tel: (65) 64671890 fax: (65) 64698801 email: corporate@icgtraining.com www.icgtraining.com
  7. 7. Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010 To analyse data, estimate the key variables and tabulate the following: i. Total Operating hours for each periods (low-peak) of operation for each game type by weekday, Friday, Saturday and Sunday. ii. Order the data collected for games per hour, wager per game and players per game by game type and calculate the average values for 6 low-peak periods within 24 hours for weekday, Friday, Saturday and Sunday. iii. Use the averages for the variables of operating hours, hands per hour and wager per game to tabulate the Theoretical Win for each game type for 6 periods of each varying operational pattern days defined as Weekdays, Friday, Saturday and Sunday. iv. Complete projection of the casino’s common gaming total revenue capacity (weekly, monthly and yearly) based on theoretical wins tabulated of each period of the operational pattern days. 3.4 RW S casi no table game s pe rf orm anc e st ud y. Provide a basis for Comparative Performance Analysis of table games Isolate tabulated values into averages of all periods and days (weekly) and define the following: i. Games per hour comparison by game type – to describe efficiency. ii. Average Wager (Handle) per hour by game type – to describe sales volume. iii. Average Wager per player per game by game type – to describe purchasing power or gambling intensity. iv. Theoretical win per game by game type – to describe comparative revenue margin between games. v. Theoretical win per hour by game type – to describe profitability between games. ICG School of Casino & Hospitality Management, 200, Turf Club Road #02-03/09, Singapore 287994 6 tel: (65) 64671890 fax: (65) 64698801 email: corporate@icgtraining.com www.icgtraining.com
  8. 8. Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 20104. Methodology4.1 E stimated T he oretica l Wi n M odelThe usual methods to project potential casino revenue are based on the application of detailed“gravity models” that relate actual (and, for proposed facilities, potential) gaming-facility revenuesto the demographics of the areas surrounding them. These models are based upon a well-established principle of economics known as “Reilly’s Law,” which describes how consumerstend to visit alternative retail centers (roughly) in direction proportion to the size of each center(such as casino square footage, or number of slot machines) and inversely proportional to thesquare of the distance to each -- hence the parallel with Newton’s law of gravitation. Thismethod is usually used for studies undertaken before a decision to open the casino is made or ifthere are plans to redevelop or add casinos to a locality.In the case of an active casino, this study employs an unusual method of estimating the revenuepotential of the casino. A statistical model is designed to estimate the weekly handle (totalwagers) of the major table games. The total handle is a variable in the tabulation of TheoreticalWin. The following formula forms the basis of the statistical model used in this study: Theoretical Win = Handle x House Edge % where, Handle = Average Wager per Game x Average Games/Hour x Total Operating HourThus the statistical model requires measurement of the variables at live table games. Survey isconducted on randomly selected live table games and data is collected for wager per game andgames per hour. Total tables opened throughout the day are tracked and recorded to tabulatethe Total Operating Hours for each game studied.The table games surveyed are: • Roulette ( RL) • Baccarat (non-commission and commission) (BB or MB ) • Blackjack and Pontoon (not differentiated) (BJ and PO) • Progressive Caribbean Stud Poker (CSP) • Progressive Texas Hold ‘Em (TX) • 3 Card Poker (CP) • 3 Pictures (TP) • Tai Sai (TS) ICG School of Casino & Hospitality Management, 200, Turf Club Road #02-03/09, Singapore 287994 7 tel: (65) 64671890 fax: (65) 64698801 email: corporate@icgtraining.com www.icgtraining.com
  9. 9. Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 20104.2 Setti ng t he Ho use Ed ge % f or purp os e of st ud yHo use Ed ge (HE%) is the mathematical advantage the casino has over players for each of itsgames. Casino games are based on prediction of the outcome of a random event and wageringon the success of the predicted outcome. Based on the success probability of an outcome, the‘True Odds’ are defined. By setting the ‘Payout Odds’ lower than the ‘True Odds’, the casinocreates for itself a mathematical advantage for all the possible outcomes in a game of chance.House Edge is a statistic value that has a corresponding parameter in all casino games. Thecalculation and the stating of HE% for games can be as straight forward (as in Roulette) orextremely complicated (as in Texas Hold ‘Em Poker). The variety of game rules and side betsoffered by casinos further create complications in establishing the Empirical House Edge (EHE).In certain games with multiple betting options, the probabilities differ for each bet type thus agame shall have varying house edge percentages. In such cases the industry uses BlendedHouse Edge (BHE) figures or settles for the house edge value of the most common or probablewager or wagers, i.e. in Tai Sai, the commonly accepted practice is to use the HE% of Big orSmall bets which attract the bulk of wagers, as the various other bet options attract far lesserbet volume relatively.For the purpose of this study the House Edge % values described in Tabl e 4. 1 are used totabulate the theoretical win. ICG School of Casino & Hospitality Management, 200, Turf Club Road #02-03/09, Singapore 287994 8 tel: (65) 64671890 fax: (65) 64698801 email: corporate@icgtraining.com www.icgtraining.com
  10. 10. Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010Table 4. 1: H o us e Ed ge % sta nda rds fo r RW S ga mes i n the st ud y. Game Ho use Ed ge % Descri ptio n Roulette 2.703% Empirical value for single zero roulette. Baccarat 1.265% Blended house edge, based on resolved decisions (Tie not included) for game of eight-decks. Banker +1.17% Player +1.36% “These are known as the relative win rates” Aggreg ate Ho use E dge = (1 .17+1 .36)/2 = +1.265% The RWS Baccarat HE would also be affected by offer of side bets such as “Pair”, “Super Six’, “Insurance” and variation for No Commission games. The ‘‘Pair”(+10.7% HE) and ‘Super Six’, side bets increases the overall house edge to a certain degree but little evidence is available if the “Insurance” side bet improves or decreases the house edge. The No Commission Baccarat is quoted to have House Edge of +1.46%. These elements are left out of the HE% assumption for the purpose of the study. Blackjack & Pontoon 1.10% Blackjack/Pontoon house edge is subject to number of decks, rules applied by the casino and player skill. RWS game rules and assumption that players use optimal strategy (basic strategy) will provide: Blackjack +0.513 % Pontoon +0.490% The HE on consideration of players using non- optimal strategy or no strategy which will give HE varying from +1% to +14%. Although a good estimate would be +3.00%, in this study H E of +1.10% mimics the standard HE adopted by major regional casinos.continue … ICG School of Casino & Hospitality Management, 200, Turf Club Road #02-03/09, Singapore 287994 9 tel: (65) 64671890 fax: (65) 64698801 email: corporate@icgtraining.com www.icgtraining.com
  11. 11. Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010Table 4.1 continued: Game Ho use Ed ge % Descri ptio n Texas Hold’Em 1.47% RWS Texas Hold ‘Em is the Progressive with Bonus Bet variety. Ante wins with straights or better. Progressive ‘Progressive Gaming’ the license holder states that the HE on Ante is +5.5935% or an average of +1.4743% per wager. (TX Hold ‘Em has multiple wagers per hand). ‘Bonus’ bet has a stand-alone house edge of +8.5406%. For the purpose of study the impact of ‘Bonus’ bet is not included. 3 Card Poker 3.37% RWS 3 Card Poker is the No-Commission Pair Plus side bet with Progressive variety. Based on RWS Progressive pay tables, identified as TCP-07 version of Shuffle Master’s 3 Card Poker Progressive, the HE is +3.37%. The computation of the element of risk and progressive payout including the Envy Bonus is not included. 3 Pictures Non- 2.41% RWS version is a variation of 3 Card Baccarat of Macau. House Edge is based on player bet only. Commission Wagering on Tie bet (HE=+20.8%) and Three Pictures (Dealer) side bet (HE=+83%) are relatively insignificant and not included for the purpose of this study. Tai Sai 2.78% RWS version is similar to Sic-Bo. HE is based on even money pay-offs ( Big-Small, Even-Odd) only, as generally accepted.Ramachandar Siva © 2010 ICG School of Casino & Hospitality Management, 200, Turf Club Road #02-03/09, Singapore 287994 10 tel: (65) 64671890 fax: (65) 64698801 email: corporate@icgtraining.com www.icgtraining.com
  12. 12. Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 20104.3 T he Statistical Ap pr oac hThe basic theory of casino games allows the prediction of potential revenue subject to availabilityof key information such as game types, operating hours, game pace and value of wagers.Theoretical Win can be calculated by estimating the handle for the various types of games.A statistical revenue projection model is designed to tabulate the theoretical win based onestimates of game Operating Hours (OHD), Game Pace (GPH) and Average Wager per Game(AWG.)Information gathered is used to define values for Key Revenue-Performance Indicators (KRI)such as Games/Hour, Average Wager/Game, Theoretical Win/Game and Theoretical Win perHour for each game type offered by RWS. These values, once defined, will allow comparativestudy to describe productivity and efficiency levels between the games.KRI can be used as basis for performance comparison between two casinos.Key Revenue Performance Indicators – definitions: OHD - Operating Hours per Day, the total active duration of a gaming table in a 24-hour casino day. AWG - Average Wager per Game, the sum of wagers placed by punters in a valid game. GPH - Games per Hour, the total number of games conducted in one hour at a table game. Generally known as the game pace. PPG - Players per Game, the number of punters participating in a game by placing wager. WPP - Wager per Player, the average wager placed by a player for a game. TWG – Theoretical Win per Game, the statistical theoretical win estimate for a game conducted. TWH – Theoretical Win per Hour, the statistical theoretical win estimate for every one hour of games run. Ramachandar Siva © 2010 ICG School of Casino & Hospitality Management, 200, Turf Club Road #02-03/09, Singapore 287994 11 tel: (65) 64671890 fax: (65) 64698801 email: corporate@icgtraining.com www.icgtraining.com
  13. 13. Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010The following describes stages of survey, data collection, tabulation and analysis method. i. Ca si no Ope ratio ns S urvey 1. Survey is conducted for types of games offered by RWS in the common gaming area. 2. Survey is conducted to count the number of table games, electronic game stations and slot machines. The operational areas of the casino are identified and allocation of tables surveyed. A count for physical tables available and actual tables in operations. 3. Survey is conducted to record table opening patterns. Table opening pattern impacts the operating hours, a key component of the revenue projection model. A casino-day (24 hours) is divided into 6 periods that define the ‘low-peak’ operation system employed by casinos. Number of tables opened for each period is recorded by game type, table limit and location (sub-section within the common gaming area)). This captures the fluctuation of operational capacity to match changing demand throughout the day. A 7-day week operation is divided to Weekday and Weekend operating pattern. Starting Friday evening (period 4, 2000-2400 hrs) the casino is expected to increase its capacity for each day period running through Saturday and Sunday evening. This is to cater for the weekend visitor demand caused by additional arrivals and extended stay of players. To capture the fluctuation of periodic table opening pattern, table count data is collected on a Weekday day (Wednesday and Thursday) and a Weekend day (Saturday). The pattern for Friday and Sunday are derived by estimating demand and manpower capacity of the casino that dictate table opening. The manpower capacity by shift is predicted from data and observation completed on a Weekday and Saturday. Hence survey was not conducted on Friday and Sunday. ICG School of Casino & Hospitality Management, 200, Turf Club Road #02-03/09, Singapore 287994 12 tel: (65) 64671890 fax: (65) 64698801 email: corporate@icgtraining.com www.icgtraining.com
  14. 14. Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010 ii. Ca si no Visit or A rri val S urve y 1. Daily visitor study provides an estimate of demand and patterns of arrivals. Periodical (monthly or quarterly) tracking will provide an indication of growth of customer base and success of casino marketing. Visitors are classified as Local and International. This allows an understanding of volume and visit patterns of Singaporeans and foreigners. 2. Data is collected for Weekday (Wednesday/Thursday) and Weekend (Saturday) for both Local and International visitor. RWS has one entrance with separate entry points for locals and foreigners. Visitor headcount for local and international is recorded for 1 5 mi nute s at intervals of approximately 2 hours throughout the 24-hour day. Weekday visitor count is assumed for Monday-Friday. Weekend visitor count assumed for Saturday and Sunday. To take into count the effect of repeat entry of visitors, weightage of 1/1.5 (Weekday) and 1/1.8 (Weekend) is factored for acceptable head count estimate. Refer Appendix 5 – Visitor Survey Planiii. Ta ble Gam es Li ve Actio n S urve y 1. This survey provides the required information for projection of revenue and analysis of table games performance factors. 2. Survey of casino floor completed for 1 Weekday and 1 Weekend. An operational day of 24 hours is divided into 6 periods of 4 hours to reflect the casino’s ‘low-peak’ table opening plan, which in turn matches the patronage fluctuation between the low-peak periods. A set of data is collected for the defined periods on a Weekday and Weekend. In total 12 data sets representing all periods are recorded for all the games selected for the study. Sample size was set at 5% of the total tables for each game type or a minimum of 2 tables. Sample tables are selected using simple method of selecting the nth odd numbered table and the even numbered table next to it for each observation. Each observation is fixed at 15 minutes. All games falling (starting) within the observation period are included in the data collection. ICG School of Casino & Hospitality Management, 200, Turf Club Road #02-03/09, Singapore 287994 13 tel: (65) 64671890 fax: (65) 64698801 email: corporate@icgtraining.com www.icgtraining.com
  15. 15. Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010 3. Data collected – Table limit, Estimated wager per game, Number of Players and Number of games conducted. 4. The major games surveyed are Roulette, Baccarat, Blackjack and Pontoon. The data collection and eventual classification assumes Blackjack and Pontoon as same samples due to technical similarities. 5. Fun games included in the study are those deemed to have significant contribution to bottom-line. These would be Tai Sai, Caribbean Stud Poker, 3 Pictures, 3 Card Poker and Texas Hold ‘Em. From the set of games available at RWS, Craps, Mini Dice, Pai Gow Tiles and Money Wheel are not included in the survey. 6. Experienced casino games supervisors were used to survey the tables. The average related experience of a surveyor is 15 years. The accuracy of wagers per game estimation depends much on the skills and experience of the surveyor. Refer Appendix 6 – Table Games Live Action Survey Plan ICG School of Casino & Hospitality Management, 200, Turf Club Road #02-03/09, Singapore 287994 14 tel: (65) 64671890 fax: (65) 64698801 email: corporate@icgtraining.com www.icgtraining.com
  16. 16. Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 20105. Findings5.1 Ab o ut RW S Casi no O perati o ns. 5.1. 1 Ge ne ral O ve r view of Ca si no RWS casino is a Large Destination Casino (LDC) similar to the Genting Group’s flag-ship casino in Genting Highlands, Malaysia. The approved casino floor space is 15,000 sq metres. The casino operates on 2 floors, the ground floor, which is the Common Gaming area and the mezzanine floor where the Maxim’s Club and Crockford’s gaming rooms are located. Maxim’s caters to RWS’s club players holding at least a Silver membership card. The clubrooms that cater to the medium and high value players are kept out of view and have controlled access located within the main gaming floor. The common gaming floor is subdivided to the Main Gaming Hall (non-smoking) (COMNS), Singapore Citizen & Permanent Resident Room (COMSIN) and the Smoking Section (COMS). The exclusive Singaporean room has controlled access. Smoking is permitted in this room and a small area is demarked as non-smoking section. The casino has one entry point for all visitors. Entry is restricted to persons of 21 years and above of age. Local visitors who are required to pay a levy of $100 a day use dedicated entry and exit points. Foreign visitors are required to produce their passports for verification when entering and exiting the casino. ICG School of Casino & Hospitality Management, 200, Turf Club Road #02-03/09, Singapore 287994 15 tel: (65) 64671890 fax: (65) 64698801 email: corporate@icgtraining.com www.icgtraining.com
  17. 17. Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010 5. 1. 2 Ope rati ng H o ur s a nd Pattern The casino is open for 24 hours a day, 7 days a week. Total tables and game types vary throughout a day of operations. The casino employs a ‘low-peak’ manning and operating system to match demands of patronage and availability staff to man the tables. For purpose of the study, considerations were given to track the increase and decrease of table numbers for every period identified as per table 5.1. Summary of Operation Pattern; Lowest – Weekday, Periods 1 & 4 (less the 20% tables open) Highest – Saturday, Periods 4, 5 & 6 (more than 50% tables open) Chart 5.1 presents the operating capacity by period for typical weekday and weekend. Table 5. 1: RW S O perati o n Pattern – Lo w-Pe ak Perio ds Mon – Thursday (Typical Weekday) 08-1200 12-1600 16-2000 20-2400 00-0400 04-0800 Low Mid Mid Peak Peak Low Friday 08-1200 12-1600 16-2000 20-2400 00-0400 04-0800 Low Mid Peak High-Peak Peak Mid-Low Saturday 08-10 10-1200 12-1600 16-2000 20-2400 00-0400 04-0800 Low-Mid Mid Peak High-Peak High-Peak High-Peak Mid-Low Sunday 08-10 10-1200 12-1600 16-2000 20-2400 00-0400 04-0800 Low-Mid Peak High-Peak High-Peak Peak Mid Low Ramachandar Siva © 2010 ICG School of Casino & Hospitality Management, 200, Turf Club Road #02-03/09, Singapore 287994 16 tel: (65) 64671890 fax: (65) 64698801 email: corporate@icgtraining.com www.icgtraining.com
  18. 18. Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010 C hart 5.1: Ope rati ng Ca pacity b y Pe ri od – Wee kday vs Week end Ramachandar Siva © 2010 ICG School of Casino & Hospitality Management, 200, Turf Club Road #02-03/09, Singapore 287994 17 tel: (65) 64671890 fax: (65) 64698801 email: corporate@icgtraining.com www.icgtraining.com
  19. 19. Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010 5.1. 3 Types of Games The major games in the casino based on physical count are, Baccarat (24%), Roulette (21%), Blackjack (8.5%) and Pontoon (9.6%). The Casino Regulatory Authority (CRA) website lists 19 variations of games approved for RWS casino. There are six variations for Baccarat based on commission or non- commission with or without Super Six or Insurance side bets. For the purpose of study, table count for Baccarat specifies only commission or non- commission count. For the estimation of revenue, the variations are not specified. Craps is not included in the list of approved Game Rules by the (CRA). A physical Craps table was seen in the common gaming area but not in operation. Refer Table 5.2a for list of CRA approved games. Refer Table 5.2b for breakdown of tables by game type as per survey. Table 5. 2a: A pp ro ve d Game T ype – RW S Comm on Gami ng Se cto r (listed as approved game rules on CRA Website) 1 Blackjack (with Over and Under 13) 2 Caribbean Stud Poker 3 Casino War 4 Mini Dice 5 Money Wheel 6 Pai Gow 7 Pontoon 8 Progressive Texas Hold Em 9 Roulette 10 Tai Sai 11 Three Card Poker 12 Non-Commission Three Pictures 13 Poker 14 Commission Baccarat 15 Commission Baccarat with Insurance 16 Commission Baccarat with Super Six 17 Non-Commission Baccarat 18 Non-Commission Baccarat with Insurance 19 Non-Commission Baccarat with Super Six ICG School of Casino & Hospitality Management, 200, Turf Club Road #02-03/09, Singapore 287994 18 tel: (65) 64671890 fax: (65) 64698801 email: corporate@icgtraining.com www.icgtraining.com
  20. 20. Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010 5.1. 4 P hysical Tab le C o unt ( Co mmo n Gami ng ) The casino offers typical casino table games (as approved by CRA) that are popular in the Asia-Pacific region. In total 36 5 p hys ical table s were found on the common gaming floor as of 2nd week April 2010. The tables are distributed across sections as following: Main Hall (Non-smoking) 57 % Singapore /PR Room 6% Smoking Area 27% Table 5.2b: Breakdown of Physical Table Count by Game Type (April 2010) (Baccarat games are clustered as Commission or Non-Commission only) RWS Physical Table Sector GAME Sector Total % Roulette 76 20.8% Commission Baccarat 86 23.6% Non-Commission Baccarat 26 7.1% Blackjack 31 8.5% Pontoon 35 9.6% Caribbean Stud Poker 18 4.9% Progressive 3 Cards Poker 12 3.3% 3 Pictures 18 4.9% Progressive Texas Hold Em 19 5.2% Pai Gow Tiles 10 2.7% Tai Sai 16 4.4% Mini Dice 6 1.6% Money Wheel 3 0.8% Casino War 8 2.2% Craps 1 0.3% Total Tables 365 100.0% ICG School of Casino & Hospitality Management, 200, Turf Club Road #02-03/09, Singapore 287994 19 tel: (65) 64671890 fax: (65) 64698801 email: corporate@icgtraining.com www.icgtraining.com
  21. 21. Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010 Chart 5.2: RWS Common Gaming Table Games – Distribution (April 2010) Ramachandar Siva © 2010 5.1. 5 Elect ro ni c Gami ng Ta ble s (E GT ) & Slot Ma chi nes The casino also offers electronic betting station based games of Touch Bet Roulette (168 stations) and Rapid Baccarat (152 stations). It is to be noted that the electronic gaming tables (EGT) (for roulette and baccarat) are approved under the Slots Machines licensing scheme. Each betting station is counted as 1 machine. As of April 2010, the casino has approximately 900 slot machines. Of the 900 machines positioned in the common gaming area, approximately 280 machines were only commissioned and opened for operation on the 11th of April 2010. The planned VIP Slot Club room is yet to be opened. ICG School of Casino & Hospitality Management, 200, Turf Club Road #02-03/09, Singapore 287994 20 tel: (65) 64671890 fax: (65) 64698801 email: corporate@icgtraining.com www.icgtraining.com
  22. 22. Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010Table 5.3: RWS Common Gaming – Table Games & Gaming Machines Distribution by floorsections (April 2010) Game RWS Physical Table TOTAL Type MAIN SMOKING CITIZEN/PR COMMON GAME TYPE HALL AREA ROOM GAMING % Roulette 47 22 7 76 20.82% Baccarat 44 26 16 86 23.56% Mini Baccarat (No Tax) 16 10 0 26 7.12% Blackjack 20 8 3 31 8.49% Pontoon 24 8 3 35 9.59% Caribbean Stud Poker 10 4 4 18 4.93% 3 Card Poker 8 4 0 12 3.29% 3 Picture 8 4 6 18 4.93% Texas HoldEm 8 5 6 19 5.21% Pai Gow 4 0 6 10 2.74% Tai Sai 11 2 3 16 4.38% Mini Dice 3 3 0 6 1.64% Money Wheel 1 1 1 3 0.82% Casino War 3 3 2 8 2.19% Craps 1 0 0 1 0.27% Total Tables 208 100 57 365 100.00% Area Table % 57 % 27 % 16 % Slot Machines 791 109 900 Rapid Roulette 66 102 168 Rapid Baccarat 60 60 32 152 Gaming Machines Total 1220Ramachandar Siva © 2010 ICG School of Casino & Hospitality Management, 200, Turf Club Road #02-03/09, Singapore 287994 21 tel: (65) 64671890 fax: (65) 64698801 email: corporate@icgtraining.com www.icgtraining.com
  23. 23. Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 20105.1. 6 RW S C omm on Gami ng - Ope rati ona l C ap acity as of Ap ril 2 01 0 With 365 physical gaming tables accounted for as of 2nd week of April 2010, technically the casino is able to offer 8,7 60 op erati ng ho ur s pe r day. Operating Hours per table is defined as total hours a gaming table is technically open and available for business operations. Based on the ‘low-peak’ operations system described earlier, the casino does not open all its tables on full 24 hours. For purpose of comparative study, the Full Capacity of the casino’s table games operations is assumed as the 24 hours opening total of all physically available tables. The survey of actual tables opened throughout various periods of operations shows that the Common Gaming division is operating at average operating capacities of 34% on Weekdays and 42 % on Weekends. At the lowest operating period (weekday 0400-1200) 69 tables are opened or approximately 19% of full capacity. The casino achieves highest weekday capacity of 168 tables or 46% at peak periods between 2000-0400 hours. On weekend (Saturday), the lowest operation period offers 82 tables or 22% of capacity, while the peak periods offer 197 tables or 54% capacity. Table 5. 4: Act ual Acti ve Table s – W eekda y vs Weeke nd (A pri l 2 01 0 ) RWS Tables Spread Period 0800-1000 1200-1600 1600-2000 2000-2400 0000-0400 0400-0800 Weekday 69 138 142 168 168 69 19% 38% 39% 46% 46% 19% Saturday 82 171 181 185 197 114 22% 47% 50% 51% 54% 31% Ramachandar Siva © 2010 Overall observation shows demand far exceeding supply of gaming tables throughout the mid, peak and high-peak periods. Almost all games are oversubscribed by 2-3 times in the peak and high-peak periods. Fact-finding shows that RWS’s ability to increase its operational capacity is curtailed by shortage of dealers. ICG School of Casino & Hospitality Management, 200, Turf Club Road #02-03/09, Singapore 287994 22 tel: (65) 64671890 fax: (65) 64698801 email: corporate@icgtraining.com www.icgtraining.com
  24. 24. Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010 It can be further assumed that RWS may be holding back on employing additional staff as the demand may see a drop when Marina Bay Sands opens late April. A wait-and see-approach is likely, to observe changes in demand before committing to employ additional dealers. The manpower situation is expected to improve gradually over the next 3 months.Table 5. 5a: RWS C omm on Gami ng –Wee kda y Actua l Ta ble Sp read vs Full Capac ity Physical Table Tables Spread Actual Actual Physical PhysicalGAME TYPE Total 8-1000 12-1600 1600-2000 2000-2400 0000-0400 0400-0800 Ops Hours Sector Capacity Sector Actual vs 4 4 4 4 4 4 % Ops Hours % CapacityRoulette 76 16 28 28 39 39 16 664 22.0% 1824 20.8% 36%Bacacarat 86 20 24 28 32 32 20 624 20.7% 2064 23.6% 30%Mini Bac No Tax 26 0 4 4 4 4 0 64 2.1% 624 7.1% 10%Blackjack 31 11 15 13 17 17 11 336 11.1% 744 8.5% 45%Pontoon 35 7 19 21 21 21 7 384 12.7% 840 9.6% 46%CSP 18 4 8 8 8 8 4 160 5.3% 432 4.9% 37%3 Card Poker 12 0 4 4 8 8 0 96 3.2% 288 3.3% 33%3 Picture 18 0 8 8 8 8 0 128 4.2% 432 4.9% 30%Texas Holdem 19 4 8 8 8 8 4 160 5.3% 456 5.2% 35%Pai Gow 10 0 6 6 6 6 0 96 3.2% 240 2.7% 40%Tai Sai 16 6 13 13 16 16 6 280 9.3% 384 4.4% 73%Mini Dice 6 0 0 0 0 0 0 0 0.0% 144 1.6% 0%Money Wheel 3 1 1 1 1 1 1 24 0.8% 72 0.8% 33%Casino War 8 0 0 0 0 0 0 0 0.0% 192 2.2% 0%Craps 1 0 0 0 0 0 0 0 0.0% 24 0.3% 0%Total 365 69 138 142 168 168 69 3016 100.0% 8760 100.0% 34%Spread % 19% 38% 39% 46% 46% 19%Rapid Roulette 168Rapid Baccarat 152Ramachandar Siva © 2010Table 5. 5b: RWS C omm on Gami ng–Wee ke nd Actua l Ta ble S pread vs Full Capac ity Physical Table Tables Spread Actual Actual Physical PhysicalGAME TYPE Total 8-1000 12-1600 1600-2000 2000-2400 0000-0400 0400-0800 Ops Hours Sector Capacity Sector Actual vs 4 4 4 4 4 4 % Ops Hours % CapacityRoulette 76 24 40 46 46 46 37 956 25.7% 1824 20.8% 52%Bacacarat 86 24 36 36 36 40 30 808 21.7% 2064 23.6% 39%Mini Bac No Tax 26 0 4 4 4 4 0 64 1.7% 624 7.1% 10%Blackjack 31 7 15 16 16 20 13 348 9.4% 744 8.5% 47%Pontoon 35 11 24 24 24 28 15 504 13.5% 840 9.6% 60%CSP 18 4 8 8 12 12 8 208 5.6% 432 4.9% 48%3 Card Poker 12 0 8 8 8 8 0 128 3.4% 288 3.3% 44%3 Picture 18 0 8 8 8 8 0 128 3.4% 432 4.9% 30%Texas Holdem 19 4 8 8 8 8 4 160 4.3% 456 5.2% 35%Pai Gow 10 0 6 6 6 6 0 96 2.6% 240 2.7% 40%Tai Sai 16 8 13 16 16 16 7 304 8.2% 384 4.4% 79%Mini Dice 6 0 0 0 0 0 0 0 0.0% 144 1.6% 0%Money Wheel 3 0 1 1 1 1 0 16 0.4% 72 0.8% 22%Casino War 8 0 0 0 0 0 0 0 0.0% 192 2.2% 0%Craps 1 0 0 0 0 0 0 0 0.0% 24 0.3% 0%Total 365 82 171 181 185 197 114 3720 100.0% 8760 100.0% 42%Spread % 22% 47% 50% 51% 54% 31%Rapid Roulette 168Rapid Baccarat 152Ramachandar Siva © 2010 ICG School of Casino & Hospitality Management, 200, Turf Club Road #02-03/09, Singapore 287994 23 tel: (65) 64671890 fax: (65) 64698801 email: corporate@icgtraining.com www.icgtraining.com
  25. 25. Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 20105.2 RW S Ca si no Vi sit or Ar riva l St udy 5.2. 1 Cas ino Vi sito r Ar ri val Projecti o n Study of visitor arrival provides a good indication of RWS casino’s success. Periodical tracking of visitors to casino will enable estimation of increasing demand, growth and success of marketing activities. This study covers typical Weekday and Weekend visitor patterns only. Various other visitor patterns that can cause positive fluctuations such as public holidays, school holidays and special events (such as Singapore Formula One Race week) are not considered in the estimates. The following are the key findings of the Casino Visitor Survey: 1.Single Weekday Visitors Locals 11,400 (51.2 %) International: 10,800 (48.8 %) Typical Weekday Total: 22,200 2. Saturday Visitors Locals: 15,400 (37.1 %) International: 26,200 (62.9 %) Typical Weekend Day Total: 41,600 3. Estimated Weekly Visitor arrivals: 194,000 4. Estimated Monthly Visitor arrivals: 776,000 5. Annualised Visitor Arrival Estimate: 10. 1 mil lio n * Estimates are not adjusted for repeat visitor (on days of study) and Visitor estimates are exclusively for casino only and do not reflect the RWS overall resort-hotel visitor arrival. On Weekday, Local visitors slightly lead Foreigners 51.2% against 48.8 %. On Saturday, Foreigners take an overwhelming lead of 63 %. Overall the casino can expect 55 % of its total patronage to be foreigners. As the survey does not include various other positive fluctuation periods, the estimates are deemed very conservative. ICG School of Casino & Hospitality Management, 200, Turf Club Road #02-03/09, Singapore 287994 24 tel: (65) 64671890 fax: (65) 64698801 email: corporate@icgtraining.com www.icgtraining.com
  26. 26. Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010 Table 5. 5: RW S Casi no – V isit or Projecti o n Lo cal, Fo rei g ners a nd All Visit ors (including Repeat Visit Factored figures for comparison) Repeat Visit Not Repeat Visit Factored Factored i. Local Vi sito r Pr ojecti o n Total Weighted Total Daily -Weekday estimate 11,300 7,600 Daily -Weekend estimate 15,400 8,600 Weekly projection 87,600 55,000 Monthly projection 350,000 220,000 Quarterly Projection 1,138,000 715,000 Annual Projection 4,553,000 2,857,000 ii. Internati o nal Vi sito r Projecti o n Total Weighted Total Daily - Weekday estimate 10,800 7,200 Daily - Weekend estimate 26,200 14,600 Weekly projection 106,000 65,000 Monthly projection 425,000 260,000 Quarterly Projection 1,382,000 846,000 Annual Projection 5,530,000 3,383,000 iii. Al l Vis ito r P r ojectio n Total Weighted Total Daily - Weekday estimate 22,100 14,800 Daily Weekend estimate 41,600 23,100 Weekly projection 194,000 120,000 Monthly projection 776,000 480,000 Quarterly Projection 2,521,000 1,560,000 Annual Projection 10, 0 83, 00 0 6,2 4 0,0 00 Ramachandar Siva © 2010 ICG School of Casino & Hospitality Management, 200, Turf Club Road #02-03/09, Singapore 287994 25 tel: (65) 64671890 fax: (65) 64698801 email: corporate@icgtraining.com www.icgtraining.com
  27. 27. Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010 5.2. 2 Dail y Vi sit or Ar ri val Pattern Visitor arrival pattern is typical of any land-based casino. Arrivals are low in the early morning, before picking-up mid-day to simmer down during dinner between 5.00 pm to 7.00 pm. A second surge of visitors is seen after dinner period starting 8.00 pm to midnight before gradually declining between 2.00 to 6.00 am. The busiest period for RWS casino is between 8.00 pm to midnight on a Weekday, while on Saturday the highest Peak is between midnight to 4.00 am. Chart 5.3 shows the low-peak visitor arrival pattern at RWS casino over a typical Weekday and Weekend (Saturday). C hart 5.3: RW S C asi no– Dail y V isit or Arri val Pat tern Weekda y vs Weeke nd Ramachandar Siva © 2010 ICG School of Casino & Hospitality Management, 200, Turf Club Road #02-03/09, Singapore 287994 26 tel: (65) 64671890 fax: (65) 64698801 email: corporate@icgtraining.com www.icgtraining.com
  28. 28. Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 20105.3 RW S Ca si no R eve nu e Pro je cti on – Co mmo n G a min g 5.3. 1 M o nthl y a nd A nnuali sed Statistical T he ore tical Wi n Based on its present capacity of operations, game efficiency, pricing and turnover (handle), the RWS casino is expected to achieve the following revenue estimates: Sector Monthly ( TW) 12 Months ( TW) Sector % Table Games $61,100,000 $794,300,000 75.7% Touch Bet Roulette* $10,900,000 $84,000,000 8.0% Rapid Baccarat* $2,600,000 $29,000,000 2.8% Slot Machines* $9,350,000 $141,000,000 13.5% Annual Revenue Projection (TW) SGD $1.05 Billion Ramachandar Siva © 2010 * Estimates for gaming machines are based on survey of machine count, minimum bet limits, observation of occupancy and wagering by observation only. Relevant variables are based on industry historical data and empirical values where applicable. The casino is expected to achieve a dail y a vera ge wi n of SGD $2. 87 milli o n from the common gaming division.5.3. 2 Re ve nue Co nt rib utio n by Game Secto r Table games main revenue contribution is expected from the 3 major games: Baccarat 24 % Roulette 19 % Blackjack/Pontoon 13 % Gaming Machines sector projections show significant contribution from Touchbet Roulette EGT with an estimated 8 % contribution to overall casino revenue. Slots Machines are estimated to contribute 13.5 % based on observations and active machine count as of April 2010. The Slots revenue is expected to grow in tandem with growth of tourist and exceed the contributions of EGTs. Refer to Table 5.6 for revenue projection by game sector. ICG School of Casino & Hospitality Management, 200, Turf Club Road #02-03/09, Singapore 287994 27 tel: (65) 64671890 fax: (65) 64698801 email: corporate@icgtraining.com www.icgtraining.com
  29. 29. Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010Table 5. 6: RW S Co mmo n G ami ng Statistic al T heoretica l Wi n (Mo nt h & A nnual ) Sector Monthly T. Win Annual T. Win Sector Casino Total Casino Total % Roulette $15,600,000 $202,800,000 19% Baccarat $19,300,000 $250,600,000 24% Blackjack/Pontoon $10,350,000 $134,500,000 13% Caribbean Stud $2,600,000 $33,400,000 3% Texas Hold Em $1,450,000 $18,900,000 2% 3 Card Poker $936,000 $12,000,000 1% 3 Pictures $3,800,000 $49,000,000 5% Tai Sai $7,100,000 $92,600,000 9% Total T abl e Gam es TW $61,099,000 $794,300,000 71.9% ETG Roulette $6,440,000 $83,723,000 8.0% ETG Baccarat $2,260,000 $29,300,000 2.8% Slot Machines $10,880,000 $141,400,000 13.5% Total Annual Revenue (TW) SGD $1,048,800,000 100% Casino Theoretical Win Average Per Day $2,873,000 Ramachandar Siva 2010 5.3. 3 Co nside rati ons Fo r Projecti o n o f A nnuali s ed Ca si no Re venue Generally the statistical revenue projection stated above does not take into consideration various factors that will have impact on RWS’s common gaming revenue over the next 12 months. The following factors are to be considered for approximation of Annual Revenue projection based on results of this study: The casino operations will increase its operating hours capacity over the next 3 months and may achieve optimum capacity 9-12 months from now. This will provide direct increase in Operating Hours thus increasing games and handle. The opening of Marina Bay Sands (MBS) will have a significant impact on patronage for a period that is uncertain. Reduced patronage would affect the handle per game, which in turn will directly affect the Theoretical Win. Apart from cannibalization of patronage, if the MBS casino is a superior product, RWS may also see an impact on quality of players. The Average Wager per Player may be reduced if MBS succeeds in attracting and keeping the higher value players. On the positive side, overall the RWS table games operation is yet to achieve typical productivity levels expected in large Asian casinos. The Games per Hour or game pace is just at 40% at best against expected levels. The experienced casino management team at RWS is expected to ramp-up the productivity to optimum levels successfully over the next 6 months. ICG School of Casino & Hospitality Management, 200, Turf Club Road #02-03/09, Singapore 287994 28 tel: (65) 64671890 fax: (65) 64698801 email: corporate@icgtraining.com www.icgtraining.com
  30. 30. Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010 Tabl e 5.7 pro vid es com pariso n RW S g am e pa ce again st t ypi ca l A sian casi no ex pe ct ations . Impact of general marketing initiatives – The grind market is sensitive to the success of general marketing initiatives, specifically the tourist distribution channel. RWS being a resort-casino, it can be assumed that extensive marketing plans are in place with results kicking-in in monthly increments of visitors on an on-going basis. Upon adjustment for lost of patronage to the 2nd casino in May 2010, fresh visitor arrival is expected from the tourist class. Though such growth is expected, the net value of players from this class is expected to be low. Low cost and efficient volume management will be a key success factor for RWS. ICG School of Casino & Hospitality Management, 200, Turf Club Road #02-03/09, Singapore 287994 29 tel: (65) 64671890 fax: (65) 64698801 email: corporate@icgtraining.com www.icgtraining.com
  31. 31. Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 20105.4 RW S Ga m e P er for m an ce Stu dy 5.4. 1 Ga me Effi cie ncy The aggregate Games per Hour (game pace) of tables surveyed are used to describe the efficiency of RWS table games operations. Table 5.7 is the summary of game pace findings at RWS casino. The aggregate Games per Hour (GPH) is significantly lower than typical game pace expectations of established large Asian casinos. Expectations of the Genting casino and Star Cruises casinos are selected for comparison due to similarity of operations and player locality. Typical of new casinos the overall game pace is below expectations largely due to Lower Dealer experience level and under-developed skills. Inadequate supply of gaming tables at peak and high-peak periods. Operational Procedures that place emphasis on security. The efficiency is expected to improve gradually week by week over the next 3 to 6 months. Specifically the dealer skills development and increased table opening is expected to improve the game pace. The game pace is expected to improve at least by 15-20 % over the next 3 months (May to July). Even slightest increase in games (i.e. 1 additional game per hour) will create significant impact in revenue for the casino. Tabl e 5 .7: RW S St atist ic al G am es Per Hour Vs T ypi c al Ind ustry Ga me Pa ce (April 2010) Asia n RWS RWS RWS RWS RWS Casi no Game Sector Weekday Friday Saturday Sunday Aggreg ate Typi cal Roulette 13 11 10 11 11 25-30 Baccarat (Face Down) 20 18 19 20 19 30-45 Blackjack/Pontoon 31 29 27 29 29 60-70 Caribbean Stud 20 21 19 18 19 30-35 Texas Hold Em 17 22 23 20 20 25-30 3 Card Poker 12 9 9 10 10 25-30 3 Pictures 14 18 18 16 17 30-35 Tai Sai 11 12 13 12 12 30-45 Ramachandar Siva © 2010 ICG School of Casino & Hospitality Management, 200, Turf Club Road #02-03/09, Singapore 287994 30 tel: (65) 64671890 fax: (65) 64698801 email: corporate@icgtraining.com www.icgtraining.com
  32. 32. Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010 C hart 5.4: RW S Game s pe r Ho ur – C ommo n Ga ming April 2 0 10 Ramachandar Siva © 2010 ICG School of Casino & Hospitality Management, 200, Turf Club Road #02-03/09, Singapore 287994 31 tel: (65) 64671890 fax: (65) 64698801 email: corporate@icgtraining.com www.icgtraining.com
  33. 33. Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010 5.4. 2 Ga me H andle (T urno ver ) We can assume the handle to represent the turnover or sales volume. (For lack of information the casinos prefer the Drop as the indicator of sales volume.) Average Wager (Handle) per hour by game – to describe sales volume for comparative performance purposes. The wager per game indicates the players’ wagering power. There are no industry standards for wager per game or handle to make comparisons. Observations alone indicate that the casino is receiving above average wagering. Typically the game of Baccarat attracts the highest volume of wager per hour ($74,000) and wager per game ($3,800). The 3 Card Poker has the lowest wagering at $10,500 per hour and $720 per game. If the casino patronage is affected by opening of the second casino, the handle per game is expected to drop creating a significant impact on revenue. Table 5. 8: RW S Casi no Statistical Wage r/ Game and Ha nd le/ Ho ur (A pril 2 01 0) SECTOR Wager/game Handle/hour/table Roulette $2,548 $27,173 Baccarat $3,818 $74,272 Blackjack/Pontoon $1,732 $48,515 Caribbean Stud $1,027 $19,689 Texas Hold Em $1,240 $26,100 3 Card Poker $720 $10,493 3 Pictures $2,098 $53,232 Tai Sai $2,974 $34,636 Ramachandar Siva © 2010 ICG School of Casino & Hospitality Management, 200, Turf Club Road #02-03/09, Singapore 287994 32 tel: (65) 64671890 fax: (65) 64698801 email: corporate@icgtraining.com www.icgtraining.com
  34. 34. Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010 C hart 5.5: RW S A ve rag e Wa ger per Game – C o mmo n Gam ing Ap ril 20 1 0Ramachandar Siva © 2010 ICG School of Casino & Hospitality Management, 200, Turf Club Road #02-03/09, Singapore 287994 33 tel: (65) 64671890 fax: (65) 64698801 email: corporate@icgtraining.com www.icgtraining.com
  35. 35. Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010 5.4. 3 Ga me Margi ns a nd Profitab ilit y The statistical Theoretical Win per Game estimates the profit margin between the types of table games at RWS. The statistical Theoretical Win per Hour estimates the revenue potential in correlation to the Operating Hours. The tabulated figures allow classification and assessment of the games in terms of profitability. Tai Sai has the highest TW per Game at $82. This is due to above average demand and an operating pattern where the dealers tend to accept wagers longer than usual. The profit performance of 3 Pictures is extraordinary with the highest TW per hour at $1,300. This reflects the high demand for the game where the Handle per Hour is recorded to be consistently higher than other games. 3 Pictures tables are about 3.4% of tables in operations, thus the overall revenue contribution is a low 4%. Note: It was observed that 3 Pictures and Tai Sai are popular among PRC nationals. Having the 3 Pictures game pit beside the Tai Sai pit attracts additional wagers from players waiting for the next game at Tai Sai. The 4 tables are inadequate to cater for the demand, and the potential of higher contribution is obvious if tables are increased. Otherwise as expected Baccarat is the most profitable game for RWS while Roulette has the highest potential to improve. Table 5. 9: RW S Casi no Statistical TW/ Game a nd TW /H o ur A pril 2 01 0 SECTOR TW/game TW/Hour Roulette $69 $734 Baccarat $51 $997 Blackjack/Pontoon $19 $536 Caribbean Stud $26 $502 Texas Hold Em $19 $392 3 Card Poker $24 $343 3 Pictures $51 $1,301 Tai Sai $82 $959 Ramachandar Siva © 2010 ICG School of Casino & Hospitality Management, 200, Turf Club Road #02-03/09, Singapore 287994 34 tel: (65) 64671890 fax: (65) 64698801 email: corporate@icgtraining.com www.icgtraining.com
  36. 36. Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010 C hart 5.6: RW S T he oreti cal Wi n p er G ame – C o mmo n Gam ing Ap ril 20 1 0Ramachandar Siva © 2010 C hart 5.7: RW S T he oreti cal Wi n p er H our – C o mmo n Gam ing Ap ril 20 1 0Ramachandar Siva © 2010 ICG School of Casino & Hospitality Management, 200, Turf Club Road #02-03/09, Singapore 287994 35 tel: (65) 64671890 fax: (65) 64698801 email: corporate@icgtraining.com www.icgtraining.com
  37. 37. Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 20106. Conclusions and DiscussionThe core purpose of this report is to provide an evaluation of the RWS casino operations interms of operational capacity, patronage levels and to estimate the revenue potential.6.1 RW S Ca si no Ope rati ons Re vie w Conclusion On the average less than 50% of the 365 physical tables are opened in the common gaming area. Tables provided are inadequate to meet demand on peak to high peak periods. The congestion is affecting revenue efficiency of the games. The variety of games offered for a new casino is exceptional, 14 distinct table games were seen on the floor (including Mini Dice and Craps which are yet to be opened). The major games are Baccarat, Roulette and Pontoon. Heavy action is seen in the Singapore /PR room on all games during mid to peak periods. Overall RWS must overcome its manpower woes to increase its operating capacity as soon as possible to capture the revenue opportunities. Points of Discussion The RWS casino is yet to achieve its optimum operating capability. Demand in the early morning of weekdays is very thin. Peak periods show demand to be higher than available gaming tables. Players are seen 2-3 layers deep around the gaming tables. Immediate increase in table opening is required for peak and high-peak periods to capitalize on present demand. Electronic Gaming Tables are extremely popular and have very high take-up rates. Slot Operations is average in terms of take-up but is expected to pick-up with the development of the Slots Players club and increase in tourist class visitors over the next 3-6 months. Dealers lack skills to handle heavy action and do not demonstrate game pace management. Similarly floor supervisors are not seen to be prompting for game pace. Operational policies such as using $5 wheel checks for $10 minimum Roulette tables are self-defeating as the $10 min tables have very high chip action to literally bring down the game to a standstill. ICG School of Casino & Hospitality Management, 200, Turf Club Road #02-03/09, Singapore 287994 36 tel: (65) 64671890 fax: (65) 64698801 email: corporate@icgtraining.com www.icgtraining.com
  38. 38. Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010 The nine-box baccarat (Bean Table) operating face-down game and having various side bets such as Insurance, Pairs and Super Six is inefficient for the common gaming crowd. Among slowest common gaming baccarat ever seen in any casino. Various operational improvements are required to get the casino into optimum revenue generating capacity in the common gaming area where technical efficiency is key to maximizing revenue. 6.2 Ca si no Visit or s Conclusion The casino is well received by both local and foreigners. Assumption that Singaporean players will leave early on weekdays (before midnight) is unfounded. The casino is seen to have peak periods between 8.00 pm to 4.00 am on weekdays. Singaporeans are seen to be streaming into the casino as late as 11.00 pm on weekdays. As expected foreign visitor numbers are significantly higher on weekend. An adjustment is expected when Marina Bay Sands opens on the 27th of April 2010. Points of Discussion There is equal support from locals and foreigners on weekdays. On weekends as expected the numbers increase and foreigners overtake the locals by almost 2 times. It is to be noted that RWS is a city casino comparable with casinos in Melbourne and Sydney for time being before it develops the tourist market and fulfill its positioning as an international resort-casino. Thus the foreign visitor patronage is expected to outnumber local support by a large degree. Current patronage is within expectations and is expected to grow week by week if not for the opening of the 2nd casino. The adjustment is to be seen in May 2010. Foreigners are made of Indonesians, Main-land Chinese, Malaysians, Thais and Vietnamese. Indian and European visitors are insignificant. Main-land Chinese players are major punters at Baccarat, Tai Sai and 3 Pictures in the Main Gaming Hall. Heavy action was observed at these games. The local, Singaporean, support is significant and is higher than expected. There are indications that RWS sets higher table limits in the SIN/PR Room and action is heavy. Observations made in this study show that the Average Wager per game is significantly higher in the exclusive Singaporean gaming room. This suggests the support from Singaporeans, key to the casino’s short-term stability, is well secured. It will be imperative for RWS to focus on the Singaporean market with increased efforts to sustain when the 2nd casino opens. ICG School of Casino & Hospitality Management, 200, Turf Club Road #02-03/09, Singapore 287994 37 tel: (65) 64671890 fax: (65) 64698801 email: corporate@icgtraining.com www.icgtraining.com
  39. 39. Casino Reve nue Potenti al Stu dy – Re sor ts Worl d Sento sa25.04. 2010 6.3 Reve nue per fo rma nce Conclusion: It’s a likely case of demand exceeding supply in the case of RWS. The weekday crowds are manageable, but from Friday evening to late Sunday, the operation is clearly overwhelmed. Games come down to snail’s pace at Roulette and Tai Sai where chip action is heavy and dealers are inexperienced to pace the games. Generally the action in the Singapore/PR area is higher and intense, suggesting the grind locals are high value players. Although an adjustment is expected when Marina Bay Sands opens, RWS is expected to pick-up with efficiency improvements and efforts of marketing kicking-in to bring the tourist class visitors. Information gathered, confirms that the VIP gaming division is also enjoying a bumper crowd as the premium program commissions are higher than regional casinos. For time being ( 3-6 months from date of report), RWS is expected to hold its own against MBS. The two months earlier opening is a big advantage in terms of stabilization of the operations and services and will keep ahead of MBS in retaining a larger share of Grind and VIP players. Points of Discussion: The annualized revenue projection of SGD $1.05 billion in the common gaming division is deemed conservative. The projected SGD $ 2.9 million per day in the common gaming division is considerable for a new casino and is expected to increase with improvement in efficiency. Based on Handle estimates, it can be said RWS casino is enjoying above average sales. It can be concluded that a casino based in Singapore receives significantly higher wager per player in the common gaming sector (or non-commission play) compared to Malaysia, Macau or Australia. Probably the highest in the world. The grind gaming shows very high quality punters (it may be having the highest wager per game of any casino in the world). ICG School of Casino & Hospitality Management, 200, Turf Club Road #02-03/09, Singapore 287994 38 tel: (65) 64671890 fax: (65) 64698801 email: corporate@icgtraining.com www.icgtraining.com

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