HA 4080

Casino Operations

FALL 2017 SYLLABUS

Instructor: Reneta McCarthy (rch5@cornell.edu)
249-A Statler Hall (enter through 255)
255-5422

Time/Place: Fridays 10:10 am—12:10 pm in the Beck Center, room 396

Required Books: Earley, Peter. SUPER CASINO: Inside the "New" Las Vegas. Bantam Books, 2000.
ISBN: 0553573497
Binkley, Christina. Winner Takes All: Steve Wynn, Kirk Kerkorian, Gary Loveman,
and the Race to Own Las Vegas. Hyperion Books, 2008. ISBN: 1401309763
Castleman, Deke. Whale Hunt in the Desert: The Secret Las Vegas of Superhost
Steve Cyr. Huntington Press, 2004. ISBN: 0929712897
Fussman, Cal. Double or Nothing: How Two Friends Risked It All to Buy One of
Las Vegas’ Legendary Casinos. HarperCollins, 2008. ISBN: 0060835834
Optional Books: Kilby and Lucas. Introduction to Casino Management, 2nd edition. Okie
International, Inc. 2012
Martinez, Andres. 24/7: Living it Up and Doubling Down in the New Las Vegas.
Villard Books, 1999. ISBN: 0-375-50181-9
Mezrich, Ben. Bringing Down the House: The Inside Story of Six MIT Students
Who Took Vegas for Millions. Free Press, 2002. ISBN: 0-7432-2570-8
Mezrich, Ben. Busting Vegas: The MIT Whiz Kid Who Brought the Casinos to
their Knees. HarperCollins Publishers, 2005. ISBN-13: 978-0-06-057511-3
Hoffer, Richard. Jackpot Nation: Rambling and Gambling Across Our Landscape
of Luck. HarperCollins Publishers, 2007. ISBN: 978-0-06-076144-8

Required Subscriptions
HA 4080 Course Site: https://blackboard.cornell.edu/

Course Overview and Rationalization

In “Introduction to Casino Operations” we will focus primarily on the operation and ownership of US
commercial casinos, and the hotels attached to them, and Native American gaming. The course is
designed to introduce students to the internal and external casino environment. We will look at the
historical development of gaming in America to understand how the industry has evolved to its present
form. By the end of the course students will understand the organizational structure of a casino hotel,
how it operates and how it makes money. Students will also gain an understanding of the different
companies involved in owning casino hotels and the current issues facing these companies. We will look

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at casino marketing strategies and player rating systems. We will examine the social and economic
impact of gaming and the various regulatory environments within which casinos operate. We will learn
how common casino games are played as well as understand the mathematics of the various games.
And we will also understand the neurobiology of pathological gambling and addiction. Students will
build on their food and beverage and hotel knowledge to better understand the specific challenges
facing casino hotel operators.

Course Objectives
The course will:
1. Introduce students to the scope of the gaming industry, the major players and the competitive
arena.
2. Define how gaming has evolved into modern day casino management and identify where the
gaming industry is headed in the future.
3. Introduce casino marketing strategies and player rating systems and show how they are
influenced by the mathematics of various games and how they both contribute to the overall
success of the operation.
4. Examine the social and economic impact of gaming and the various regulatory environments
within which casinos operate while noticing how much they contribute in terms of jobs and tax
revenue to the communities where they operate.
5. Describe how the illusion of control impacts human decision-making, and how the neurobiology
of pathological gambling and addiction makes gamblers fall victim to the illusion of control more
so than non-gamblers.
6. Identify current issues, leadership challenges and career opportunities in the gaming industry.

Over the past 30 years the US has been transformed from a nation in which legalized gambling was
limited and a relatively rare phenomenon into one in which such activity is common and accessible to
almost everyone. Today, all but two states have some form of legalized gambling. Once exotic,
gambling has quickly taken its place in mainstream culture: Televised megabucks drawings; senior
citizens’ day-trips to nearby casinos; TV shows, including “reality” shows, set in Las Vegas; televised
poker tournaments and the transformation of Las Vegas into a themed adult resort, in which gambling is
but one of a menu of attractions, have become familiar backdrops to daily life.

The gambling “industry” is composed of relatively discrete segments: casinos (commercial and tribal),
state-run lotteries, pari-mutuel wagering, sports wagering, charitable gambling, Internet gambling, and
stand-alone electronic gambling devices (EGD’s: video poker, video keno, slot machines). Before the
nineteen-nineties, legalized casinos operated in two jurisdictions: Nevada and Atlantic City. Today there
are 515 commercial casinos operating in 24 states and approximately 486 Native American casinos
located on reservations in 28 states. Twelve states have both. In addition there are three states that
have legalized online gambling: Nevada, Delaware and New Jersey, with more to follow suit.

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Gaming is an economic powerhouse. It is a unique segment of the US entertainment industry that
depends on a large workforce and the support of thousands of outside vendors and suppliers which
makes it dynamic in creating jobs and fueling economic growth. Public support of casino gaming is at an
all-time high, with nine-in-ten voters across political lines stating that gaming is an acceptable activity.
In all commercial and tribal casinos in 39 states generated enough consumer demand to produce total
gaming revenues of more than $81 billion.

The US gaming industry generates a significant amount of taxes, with $8.85 billion in tax revenue in 2015
helping to fund states with public initiatives and making the industry an influential economic force. In
fact, many states often look to gaming to plug holes in budget deficits during more difficult economic
periods. This is partly why we have seen gaming proliferate to the various states over the past twenty
years. Gaming tax rates states levy on gaming operators range from as low as 8% to as high at 67% of
gross gaming revenue. Those tax contributions help fund vital public services, such as transportation,
infrastructure, education and public safety programs. The industry also continued to be a major
employer in the US economy.

The last major US gaming expansion booms occurred in the early to mid-1990’s and the mid-2000’s
(there were seven states that started commercial gambling operations between 2004 and 2010). Today
the US gaming industry is mature and saturated. Penetration of the gaming industry is now at a point
where most people in the US are within a two-hour drive of a casino. While the US gaming industry is
growing as the number of gaming operations continues to increase (when we combine commercial
casinos, Tribal, limited stakes and iGaming) however, the revenue generated by new gaming operations
is starting to cannibalize revenues from long-established gaming operators. We clearly saw this with the
opening of casinos in Pennsylvania, Illinois, Missouri, Kansas, Ohio and Maryland. Atlantic City is a
perfect example of the impact of new casinos in nearby states and how revenues were cannibalized
causing the closing of four casinos in 2014 (Revel, Showboat, Atlantic Club and Trump Plaza). The most
recent casualty is Trump Taj Mahal, which closed October 2016, but will be reopened by as a Hard Rock
in 2018.

In other parts of the world, Macau remains the world’s largest gaming market, even though its revenues
were off from their highs in 2013 when they pulled in $45.2 billion. Due to the Chinese government’s
crackdown on corruption Macau’s gaming revenues fell to $28 billion in 2016. Macau is the only place in
China where casino gambling is legal, but other gaming markets, such as the Philippines, Korea, and
Japan are on track for gaming expansion over the next several years.

Land-based, riverboat, racetrack and Native American casinos in North America are an exciting segment
of the hospitality industry. This course will allow you to explore current issues, leadership challenges
and career opportunities in this dynamic industry. And, if nothing else, it will help you become a more
savvy, empowered casino customer!

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Atlantic City Field Trip
The field trip to Atlantic City is a required portion of the class. The trip is scheduled for Thursday,
November 2nd to Saturday, November 4th. You will be responsible for arranging your own transportation
to and from Atlantic City. The cost of the field trip is estimated to be about $300 (considering
transportation, room and food). Your spending may vary greatly depending on the decisions you make.
You are responsible for all of your expenses.

A block of rooms will be held at Borgata in Atlantic City. Reservations will be made through a rooming
list which I will maintain. Room rates have not yet been determined. You are encouraged to double and
triple-up to reduce your cost for the trip (the rooms at Borgata will contain two queen beds) but you
must understand that there may be additional charges for more than two people in the room. You are
also welcome to make your own accommodation arrangements. The rooming list will be finalized in
lecture on Friday, September 29th.

You are required to be in Atlantic City on Friday beginning at 8:30 am on Friday. Plan to be involved with
class activities until 5:00 pm. On Saturday we will not have any planned class activities.

Here is a tentative schedule for our trip:

Thursday, November 2nd – Leave Ithaca in the afternoon or early evening and arrive in Atlantic
City. Don’t go crazy in the casinos tonight or you will regret it tomorrow! Get a good night’s
sleep! Friday will be a long day with many presentations. Your participation, professionalism
and performance will be judged by the instructor, the class TA’s and the guest speakers and
managers from the properties we visit.

Friday, November 3rd we will begin at 8:30 am and will wrap-up around 5:00 pm on Friday. As
soon as our itinerary is finalized I will share it with you. It is highly recommended that you
spend Friday evening in Atlantic City becoming familiar with the casinos and enjoying all that AC
has to offer.

Saturday, November 4th— Return to Ithaca.

Learn How to Play Various Casino Games

Gambling on-line is a hands-on, risk-free way for you to practice playing casino games. Casino-on-
net.com is an example of an Internet casino where you can join live games and play with “demo”
money. There is even a “chat” function that allows you to interact with the other gamers at your table.
There is a lot of information available on the web to help you learn how to play all the popular casino
games. In particular, you may want to learn basic strategy for playing craps and blackjack. On the
course web site you will find two instructional videos that explain the intricacies of all the popular casino
games including: Slots, Blackjack, Craps, Roulette, and Baccarat in addition to a gaming guide with all the
rules for each of the games.

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If you are interested in becoming a proficient gambler you will need to spend a lot of time outside of
class playing the various games. You are expected to learn the basic rules for the various casino games,
including Blackjack, Craps, slots and video poker. After you have viewed the videos and read up on the
games please complete the Casino Games Homework Assignment on BlackBoard before our exam.

HA 4080 BlackBoard Web Site

A course web site has been developed to provide you with easy access to vast amounts of industry
information and can be accessed through https://blackboard.cornell.edu/ .

Students are expected to visit the site frequently and to read relevant industry material at the linked
sites as part of their weekly preparation for class. Each lecture has a folder under “Course Documents.”
The folder contains readings, the PowerPoint slides from lecture, homework assignments, links to
gaming videos and so on. Please visit each day’s lecture folder as soon after each lecture as possible to
understand what you are expected to do in preparation for our next class.

Academic Integrity
All students enrolled in this course are responsible for abiding by the guidelines outlined in the
University’s Code of Academic Integrity. You can find the full Code in the Policy Notebook for Cornell
Community 2003-2004. The following passage, which you will find in the Code’s introductory
paragraphs, broadly describes your key responsibilities:

Absolute integrity is expected of every Cornell student in all academic undertakings. Integrity [is]
grounded on the concept of honesty with respect to the intellectual efforts of oneself and others.
Academic integrity is expected not only in formal coursework situations but in all university
relationships and interactions connected to the educational process, including the use of university
resources. . . . A Cornell student’s submission of work for academic credit indicates that the work is
the student’s own. All outside assistance should be acknowledged. . . In addition, Cornell students
have a right to expect academic integrity from each of their peers.

Course Evaluation
Individual performance in the course will be evaluated based on the following:

Gaming Company Assignment 20%

On-line Homeworks & Quizzes 20%
AC Field Trip Participation & Contribution 10%
Research Paper and Presentation 40%
Contribution and Professionalism** 10%
** Professionalism refers to such factors as lecture attendance, respectful participation in
classroom discussions, regard for deadlines, and professional behavior and attitude toward
your fellow classmates, the TA’s, the instructor and all guest lecturers.

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Gaming Company Video Assignment–There are twelve major gaming companies in the world. The
Gaming Company video assignment is designed to help you learn about the major gaming companies
while integrating technology with student-centered learning. As part of the assignment you and a
teammate will research one of the twelve major gaming companies and create a video that will present
an overview of the company, its business model, locations, brands, and so on.

The videos will be shared with the class so that each student can learn about the major gaming
companies. Links to the videos will be posted on BlackBoard. This assignment is due Sunday,
September 10th by 4:00 pm.

On-line Homeworks –The on-line homeworks are short essay questions that you will answer on
BlackBoard. They are designed to help you focus on important aspects of the readings or videos that
you will be asked to do outside of class, and to ensure that you keep up with this important part of the
class.

Turning Stone Field / del Lago Resort and Casino Field Trip – The field trip will expose you to Native
American gaming in Verona, NY, and to one of the soon to be three commercial casinos recently opened
in New York State (Rivers Casino in Schenectady, del Lago in Tyre, and Montreign in the Catskills, still
under construction). Note: It takes a minimum of one hour and a half to get to Turning Stone. Once you
are there you have to park and find the location where we will be meeting. Do not arrive late for our
first presentation! You will also be expected to dress professionally (relaxed business attire) and act
appropriately. Del Lago is about an hour drive from Syracuse and an hour drive from Ithaca.

If you are taking another class in the afternoon (such as DDSL) you may be excused from the trip to
Turning Stone and del Lago, but I would encourage you to visit both resorts.

AC Field Trip Participation– The Atlantic City field trip will expose you to various casino/hotel operations
and the people who manage them. Students are expected to attend all speaker presentations, to ask
thought provoking questions, to tour the market in Atlantic City, and to fully participate. In addition,
you will also be expected to dress professionally in business attire and to act appropriately. The
presentations you will hear during the trip cannot be duplicated and the information you will receive
from them will be critical to your understanding of the industry. This is a required portion of the class.
If you are unable to make the Atlantic City field trip please talk to the instructor.

Research Paper and Presentation— Your Research Paper/Presentation proposed topic is due Friday,
September 22nd. The final product of this assignment will be a PowerPoint presentation that you will
present to the class and a written paper that will be turned in as your final deliverable for the course.
Your presentation is due Friday, November 10th. Your final paper will be due at the time assigned by
the university for final projects. You should incorporate feedback you receive from your presentation in
your final paper.

For your assignment due September 22nd, briefly describe the topic of your research, your presentation
title and include a brief outline of your paper. You should be on the way to developing your thesis

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statement. I would like to see a listing of sources that you have consulted in determining your topic or
sources that you will use for your paper. You will be given the option of working on a project proposed
by an industry mentor, or choosing a topic of your own. If you would like to discuss topics with me,
please e-mail me to set up a time!

Contribution and Professionalism – Professionalism refers to such factors as lecture attendance,

respectful participation in classroom discussions, regard for deadlines, and professional behavior and
attitude toward your fellow classmates, the TA’s, the instructor and all guest lecturers.
Bubbly Personalities, YES! Bubble Gum? NO!
Please do not use smart phones, tablets or laptops during class.
You are allowed one absence. If you miss more than one class there may be a grade penalty. If you miss
more than two classes your final grade will drop by a grade.
Contribution refers to actively participating in creating and sharing knowledge with the class. This
involves sharing current events or interesting articles and leading or contributing to class discussions.
Just showing up is not enough!

To Help Support Everyone’s Learning… and this impacts your professionalism score…
In an effort to make your learning experience and the experience of others in the class as positive and
productive as possible, please observe the following:
 You are expected to attend lecture. If you are taking this class for a grade, missing more than
one or two lectures will negatively impact your grade.
 If you become ill and are unable to attend lecture you may want to send me an e-mail alerting
me to the fact that you are sick. This is still an absence. I do NOT need a doctor’s note.
 Smart phones’ laptops and tablets must be turned off before class begins and under no
circumstances may they be used during class or exams (please bring a calculator to the exam!).
 Questions during lecture are welcome and encouraged. If you have a question about material
that we are covering or something related to the material it is likely that others have a similar
question. Please ask!
 Talking to a classmate during class is rude to your instructor or guest lecturer and inconsiderate
to your classmates who are trying to listen. Disruption of this kind—as well as sleeping, chewing
gum, and other unprofessional behaviors—will reduce your professionalism grade.
 If you arrive late to class please make every effort to enter quietly and discreetly. Repeated late
arrivals will affect your professionalism grade.
 Since this class is two hours long, we will take a brief (ten minutes only) break approximately
half way through the class. You should be able to sit through a 75-minute lecture, however, if
you must leave the classroom during lecture, do so discreetly with minimal disruption.
 In an effort to protect of investment in classroom facilities, food is not permitted in the
classroom. Please eat before or after class. You may bring a beverage to class provided that it
has a lid or a cover. Please remove your beverage container at the end of class.

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WEEKLY TOPICS AND READING ASSIGNMENTS

Weekly Topics and Reading Assignments (NOTE: subject to change!)
The readings are from:
 SUPER CASINO Inside the "New" Las Vegas by Peter Early
 Winner Takes All: Steve Wynn, Kirk Kerkorian, Gary Loveman, and the Race to Own Las Vegas by
Christina Binkley
 Whale Hunt In the Desert: The Secret Las Vegas of Superhost Steve Cyr by Deke Castleman
 Double or Nothing: How Two Friends Risked It All to Buy One of Las Vegas’ Legendary Casinos by
Cal Fussman
Note: Page numbers differ for paperback and hardbound copies of the books, which is why chapters are
noted instead of page numbers
August 25
Topics: Introduction to Casino Operations
Evolution of Gambling in Nevada
Las Vegas History: Odds Against Kefauver, The Rat Pack, Eccentric Billionaire

Read: SUPER CASINO: Read "Counting Cards” and Chapters 1 through 6

Counting Cards is on BlackBoard if you don’t yet have a book

Gaming Industry Terminology--BlackBoard

Homework: Complete the “Counting Cards” Homework Assignment #1 on BlackBoard

September 1 Start Atlantic City rooming list….

Topics: Casino Accounting: Drop, Win, Hold and Calculating Theoretical Win/Loss
Racking Up Comps: Black Jack
How Gaming was Legalized in New Jersey

Read: SUPER CASINO: Read Chapters 7 through 11

Gaming Guide—BlackBoard

Watch: “Play to Win” Las Vegas Hilton video (available on BlackBoard) to learn how to
play Blackjack, Roulette, Craps, Baccarat, Poker, Keno, Slots

September 8 Gaming Company Video Due Sunday, September 10th by 4:00 pm

Topics: Native American Gaming: Turning Stone
Racking Up Comps: Craps
Minding Your Gambling Manners & Cheaters Beware

Read: 2017 Gaming Statistics by Rubin Brown—BlackBoard—Homework #2

Read: SUPER CASINO: Read Chapters 12-21

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September 15
Field Trip: Turning Stone Resort and Casino, Verona, NY, & del Lago Resort and Casino,
Waterloo, NY

Read: SUPER CASINO: Finish the book

September 22 Research Paper Topic and Bibliography Due: TBD

Topics: Walt Fales, SVP Strategic Development / Enterprise Gaming, Caesars
Introducing t
he “Gaming Floor of the Future” Class Project

Read: Winner Takes All: Read “Friendly” through Chapter 11, “Hungry Alligator”

DDLS Speaker: William McBeth, President and CEO of The Cosmopolitan, Las Vegas
1:25 pm in the Statler Auditorium, open seating in the balcony

September 29 Finalize Atlantic City Rooming-lists

Topic: Guest Speaker: Mark Birtha, President, Hard Rock Rocksino, Ohio

Read: Winner Takes All: Read Chapter 12 “Taa-Daaah!” through Chapter 13 “Propeller
Heads”

October 6 No class—Fall Break

Read: Winner Takes All: Read Chapter 20 “Avid” through Chapter 28 “No End”

October 13
Topics: Dan Ingster, VP of Slot Operations Seminole Hard Rock Hotel & Casino, Tampa
Understanding Slot Math and Par Sheets

Read: Winner Takes All: Get caught up on your reading

October 20
Topics: Marketing, Player Reinvestment and Pricing Decisions
Read: Whale Hunt: Read through “Telemarketing the Marks”

October 27
Topics: Problem and Patholocical Gambling
Research Project Meetings
Read: Whale Hunt: Read through “From Pathological to Professional”

DDLS Speaker: George Markantonis, President and COO The Venetian/Palazzo and Sands Expo