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Racetrack Casino Closing

Discussion in 'Online Casinos' started by Simmo!, Oct 25, 2006.

    Oct 25, 2006
  1. Simmo!

    Simmo! Moderator Staff Member

    Occupation:
    Web Dev.
    Location:
    England
    US fallout.

     
    1 person likes this.
  2. Oct 25, 2006
  3. winbig

    winbig Keep winning this amount.

    Occupation:
    Bum
    Location:
    Pennsylvania
    More of bad marketing and planning than US fallout.
     
  4. Oct 25, 2006
  5. Simmo!

    Simmo! Moderator Staff Member

    Occupation:
    Web Dev.
    Location:
    England
    Fair point :)
     
  6. Oct 25, 2006
  7. soflat

    soflat Senior Member

    Occupation:
    Scientist
    Location:
    Florida
    LOL. So true!
     
  8. Oct 25, 2006
  9. winbig

    winbig Keep winning this amount.

    Occupation:
    Bum
    Location:
    Pennsylvania
    Yep, yep...you don't see 32Red going under ;)

    *waits for the flood of PAB's from people not getting paid by Racetrack*
     
  10. Oct 26, 2006
  11. Casinomeister

    Casinomeister Forum Cheermeister Staff Member

    Occupation:
    Homemaker
    Location:
    Bierland
    Maybe they had too many "educated players" from Casinomeister :rolleyes:
     
    1 person likes this.
  12. Oct 27, 2006
  13. Tester

    Tester Quit Gambling

    Location:
    Israel
    Simple economics

    Other mistakes of them nonwithstanding, knocking down 70% of clients is soemthing that can drive many businesses to losers.

    With 100K monthly overhead. falling revenues from 200K to 60 is enough to close shop.

    We should remember that financially speaking, every operation that stops taking US bets is at a higher risk to be insolvent.

    PS. Even BetOnSports goes belly up by some accounts because they stopped taking US bets, which took the whole business downhill. But that is certainly another story.
     
  14. Oct 27, 2006
  15. Simmo!

    Simmo! Moderator Staff Member

    Occupation:
    Web Dev.
    Location:
    England
    Good point. I think many consumers (casino or otherwise) forget that any business has overheads. I've seen people say that online casinos are much less expensive to run than their B&M counterparts, undoubtedly true, but in relative terms the expenses per capita income are not very different. Licence fees, taxes and staff costs alone are very hefty, and that's before you even start to think about marketing. I can fully understand why a casino experiencing a 70% drop in business overnight decides to pack up. Witness all the redundancies (layoffs) at 888 in the past week.
     
  16. Oct 28, 2006
  17. Tester

    Tester Quit Gambling

    Location:
    Israel
    Neteller?

    I suspect that Neteller have relatively low overheads. And, at least as per their stated results over the last years, their results are just a fraction of revenues.

    Taken together with the fact that they are not backing up right now, and they have almost a year to change contracts with employees etc. I guess that their remaining operations if leaving the US will remain profitable as much as before (i.e. if they retain 30% of the business, they will have 30% net income).
     
  18. Oct 30, 2006
  19. GrandMaster

    GrandMaster Ueber Meister CAG

    Occupation:
    Mathematician by day, online gambler by night.
    Location:
    UK
    The Wynn cost $2.7 billion to build. I don't think any online casino required even 1% of this amount to start up.
     
  20. Oct 30, 2006
  21. Simmo!

    Simmo! Moderator Staff Member

    Occupation:
    Web Dev.
    Location:
    England
    Probably not, but running costs and outgoings on a d2d basis still have to be less than revenues to turn a profit, whatever business you're in and I was amazed at the outlay required for an MG licencee.
     
  22. Oct 31, 2006
  23. Tester

    Tester Quit Gambling

    Location:
    Israel
    Economics again

    In an efficient market, $100 bills do not lay on the ground.
    If there is free money then competition erodes it.

    If a casino can make money giving you half the HA, there will be someone doing so and winnig the customers.

    In the end, there is some kind of balance between expenses and revenues.
    Once you remove 70% of revenues the balance breaks down.
     

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