Magna Entertainment Competition
Now Viewing Magna Entertainment's competition in: Gambling Operations
Call Preparation Questions
Customers, Marketing, Pricing, Competition
What demographic does the company market? - Some operators appeal to customers with small but regular betting habits, some to upscale gamblers.
What types of marketing does the company do? - Most operators use TV and radio ads, and direct mail promotions aimed at repeat customers.
Does the company offer "frequent gambler" cards? Does it use information from the cards to offer promotions to individual players? - Some operators have fashioned sophisticated marketing strategies based on frequent gambler cards.
How will the company be affected if new casinos (especially Indian) open in its markets? - Rapid growth in Indian casinos is expected in the next several years.
Does the company offer programs to address problem gambling? - To counter accusations that they prey on compulsive gamblers, operators portray compulsive gambling as a medical issue and fund treatment programs, but public perception remains negative.
Competitive Landscape
Growth in consumer income and state spending has driven expansion of the US gambling industry. The profitability of individual companies depends on efficient operations and effective marketing. Large operators have the financial resources to make large investments in facilities and efficient computer operations, and have cross-marketing opportunities. Small gambling facilities can thrive by catering to a local clientèle. The industry is fairly labor-intensive: annual revenue per employee is $90,000.
Business Challenges
CRITICAL ISSUES
Demand Linked to Economic Cycles - Gambling revenue is affected by the health of the economy, including the growth of personal income. During the early 2000's recession, industry jobs fell 6 percent. Because of high fixed-costs, the profitability of gambling operations depends on a high volume of customers.
Dependence on Regulators - In states where gambling is legal, state commissions oversee gaming companies and have broad powers over their activities. State legislatures can easily raise tax rates on gambling machines. Continued industry growth depends on favorable legislation.
Industries Where Magna Entertainment Competes
- Leisure
- Gambling
- Gaming Activities
- Gambling
