The Casino Industry in the US - Case Study Example

Competition of the new entrants is a real threat and it is eating the business. The emerging market for the new casinos is led by boat casinos and Native American casinos. According to Michael E. Porter (1980), concentrating only on resources and competencies, while ignoring the competition, can turn a firm inward looking (XVI). The competition is not only growing in the US alone. Europe is harboring its own army of casinos and stealing away the high rollers. This means that the extremely wealthy that used to travel to Las Vegas to buy casino chips and gamble are now getting the facility in their own country or continent.

After the financial crisis of 2008, the rivalry between casinos has gotten more intense. Now the same casinos fight over customers and have turned to game theories to ward off the competition. Other forms of entertainments like late opening nightclubs can take away some market segment as many come to Las Vegas for entertainment and as a side dish, for gambling. If nightclubs take away these customers, casino revenues will drop as advertisers won’t find their customers to target. All gaming firms do not compete for head to head.

Some firms target the high rollers, people who can stack up millions at one gambling table, while other casinos target small-time gamblers. Big casinos always aim for high rollers despite the fact that so much revenue becomes dependent on a single investor or party. An absence of this ‘investment’ just once can mean a low earning quarter. Other than capturing market segment, geographical dominance also plays its part. No other state can compete with Nevada when it comes to gambling.

This state was given the license to gamble in 1933, the first state to have that privilege. The longest stay in the business has made it the topmost gaming revenue generator in the US with over $10 billion annually.