Based on numerous articles concerning mergers in the casino
industry, antitrust concerns of the Justice Department and FTC focus
on traditional criteria of what constitutes a market (local vs.
regional or national) and pricing such as hotel rooms. As we know
but apparently the regulators don't, the major pricing criteria
involves gaming rules and criteria and not hotel room rates. If a
stronger market dominance (lack of completion) allows casinos
to "enhance" blackjack rules such as having the dealer hit soft 17s,
etc., this is as much monopoly pricing as raising hotel rates and
results in greater casino profit and consumer cost.
If the slots hold %s as published in Strictly Slots or the tables of
good VP in this groups database are to be given credence, casinos,
such as Harrah's in one casino markets have a much higher hold and
exhibit classical monopoly pricing. Harrah's also seems to exhibit
classical predatory practices, such as using its national power with
its rewards system in an attempt to dominate local competitors.
I realize that even a monopoly casino or one in a strong oligopoly
position will still give promotions and have gambling pay tables and
rules to attract customers. However, from what I remember of college
economics, a monopolist will price so that marginal revenue equals
marginal cost; i.e. it will not enhance slots or VP paybacks beyond
the point where the loss in profit from the higher holds on an
smaller customer base is more that the enhancement in profit from an
increased base. In a fully competitive market, such pricing
(payback) is more influenced by competitive considerations.
I perceive that the gambling public and groups are too fragmented,
to have an economist present a paper and testify to the effect that
gambling rules, etc. are equivalent to pricing, and that monopoly
pricing exists in less competitive markets. In particular the FTC
is concerned with consumer pricing, and has been enforcing
aggressively (perhaps seeking to expand its sphere of influence). If
a strong argument were presented and an agency were persuaded that
gambling conditions equal pricing, the regulatory agencies could use
their subpoena powers to find out the regional placement of tighter
versus looser slots chips, etc. in various markets from such sources
as IGT. This would fill in the dots as to the effect of competition
on "pricing."
In any event I believe that the trend of mergers will ultimately
result in much less advantageous VP play opportunities for members
of this group.
David