After reading Bond Lai’s (https://blogs.ubc.ca/bondlai/) blog post on River Rock Casino – it got me thinking how casino’s are so successful. In fact, I was one of the “few friends” that went that night with him too. Although I park and ride there every morning to go to school, after having been 19 for over half a year already… – finally decided to step foot into the actual casino for a game!
So in class we’ve been talking about pricing – and it’s interesting to think about how casino’s “price” their “goods.” By “goods,” I mean the games (whether it is slot machines, black jack, big 2, etc). I guess we can all agree that River Rock Casino is very profit oriented, just like any other casinos around.
Let’s look at the simple game of slot machines: you can play the ‘penny slot machines’ (although each spin is not exactly a penny), or up to even $5 for each spin. So why are there difference choices of bets even just for slot machines? Well, I guess I can answer this because penny slot machines appealed to me. With not a lot of disposable income…AND wanting to experience the ‘gambling’ experience- I decided to play the penny slot machines with $5. Of course, I ended up losing all $5- but because with $5 I was able to experience and is what I valued. These different pricing strategies allow for attracting different groups of customers, depending on their perceived value on how much they can gain from a simple slot machine (although my 2 friends did win over $50 just from slot machines that night)!
As for my other friend’s that I bumped into that same night at the casino… they went to the higher ‘pricing’ gambling games such as Black Jack – where minimum bet is $20. Although the price is higher, as long as there is demand for it and the customers perceive this game to be a greater return, then pricing can be higher for each bet. Minimum bets for every game is fixed at the casino. The variable cost is how much you want to bet after entering the game.
Though I’d argue that the “casino” is a luxury good – for those that are addicted, it has probably become a normal good as part of their necessity to gamble and may be caused by the income effect.
So here’s a little promotional clip on the casino resort as a whole in case you’ve never been there before:
In all, the casino experience was definitely thrilling and exciting, but I can say with confidence it is not the place for me. It’s great to experience it (perhaps winning would even make the experience better)… but we all know that most of us that go in the casino will lose anyway… so definitely not a place I suggest if you’re looking for something to do in Richmond!
Mandy
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