Two Way Hard Three | Las Vegas Casino & Design Blog

November 21, 2011

The case for free casino wifi

Posted by daveschwartz

I'm still thinking about the Cosmopolitan's decision to pull its free wifi, and I've come to believe that casinos should offer free wifi, at least on the casino floor and other public areas.

Keep reading after the jump, which shouldn't take too long to load, unless you're sitting at a slot machine and stuck with a 3G connection.

First of all, free wifi is coming to be viewed, like free parking, as something that retailers and some F&B outlets offer just to make you feel more welcome.

From my own limited shopping experience over the past few days, I know that Macy's now offers free wifi, and Anthropolgie's offered it for quite some time.

The Anthropologie case is particularly instructive for casinos, because it's a store that's intensely fun to shop for women, but, once you get out of the home furnishings section, not so much for guys. I've been spending time at Anthropologie for years now (Mrs. Doctor Dave is a fan of their stuff), and I can attest to the brilliance of the executive who said, "You know what? If we put comfortable couches and lounging chairs in the store and have plenty of quirky books available for browsing, guys might not be so eager to leave."

So basically, for years, Anthropologie was providing relatively cheap baby-sitting services for men while the women put money in the cash register. And it worked. Again, just going from my personal experience, I'd always look forward to going to Anthopologie even though I don't have the figure for any of their clothes: I'd get time to just relax and read some random interesting stuff.

One time at the 3rd Street Promenade Anthropolgie, I picked up a book filled with neat midcentury modern-looking drawings of animals--and learned about the art of Charley Harper.

You might say that there are costs to providing what Anthropoligie does: that seating costs money, and there's the potential for it to get damaged. And they have to stock a lot of books that probably don't sell as well as their other merchandise. But, looking at who their prime consumer is and who she'll be shopping with, they decided to give guys a way to kill time while their counterpart shops.

Free wifi is an extension of that, and it's just as effective a way of letting those whose significant others/friends/etc are shopping feel more like they're killing time and less like they're waiting.

Casinos, like clothing retailers, are selling something with a selective appeal. Yes, a lot of people like to gamble, but there are also plenty of people who don't. And there's almost always at least one person in a group of people who doesn't want to gamble. Having free wifi is a way to encourage them to use their mobile device to entertain themselves while someone else is putting money into the drop boxes.

Let's say you've got a married couple. She wants to play slots; he doesn't. If she's got any kind of empathy, she's not going to really enjoy herself while he's sitting there staring at the pay tables and wishing desperately she'd lose her money already. She might gamble less than she would if A) she was alone B) he had something to do.

Now, let's say the casino has free wifi. He can bring his phone, tablet, or whatever else he has and stream something from Netflix while she's playing. If he gets into what he's watching, he won't want to leave--he might even ask her to play longer.

That's how you drive incremental revenue at your slot machines in the 21st century.

There is a big downside to giving wifi away: you lose a potential revenue stream. Even if you're only selling wifi to 100 people a day, at $15 per day, that's $547,500 per year. Which, come to think of it, isn't that much. If you can instead give that wifi away for free and use it to pacify non-gamblers while the gamblers play, you might be able to bump up your gaming revenues by encouraging that incremental play.

Of course, it costs money to maintain wifi networks, and casinos aren't in the business of giving away money. Higher-end hotels everywhere tend to charge for wifi (I still don't understand how motels can build the costs into room pricing but higher-cost hotels can't), and it does constitute a revenue stream.

Here's a possible compromise: Free wifi on the casino floor and other public spaces only? It would be a throwback to the days of tiny rooms, no in-room coffee makers, and no room service, when casinos did everything they could to get you into the casino. They might even drive some incremental F&B revenue while they're at it--it works for Starbucks (and even Tim Hortons), after all. And if casinos want, they can still charge for access in the hotel tower and convention center.

So far, I've only talked about using wifi to pacify non-gamblers as a way to drive gambling revenues. But there's an even better reason to open up the wifi floodgates on the casino floor, and I'm frankly amazed that the manufacturers haven't been working with the operators to make it happen.

Increasingly, casino gaming is becoming a multi-platform activity. At this year's G2E, each manufacturer was demoing game content that could be accessed through a traditional slot cabinet, a desktop computer with an Internet connection, and mobile devices. They should be developing apps that let players try games "for free" on their phones/tablets, and then guide them to the spot on the casino floor with the game they picked. Call it "Slot-finder Plus."

Already, retailers are using free wifi to let potential buyers demo technology. I think there's a compelling case to be made for casinos to do the same.

There's also a table games application: novices can hang around the tables, playing for free on their phones, then, when they're ready, get steered to a low-minimum starter table.

The more I think about it, the better I think free casino wifi would be for business. Gambling is heading into the cloud, and building the tech infrastructure now--and getting players used to flipping from mobile to physical betting--seems like the best way to make the roll-out of mobile play as smooth as possible.

With just a cursory look into prevailing practices in retail, I was able to assemble, pretty quickly, a sound argument for casinos introducing free wifi. I can't think of any reasons not, besides the fact that charging hotel guests for it opens up a small (in the grand scheme of things) revenue stream. It's disappointing that the Cosmopolitan, which promised itself to be a place where people could just come to hang out (Exhibit 1: the P3 Commons) has backed away from its free wifi, because I think that, if done right, this could be a difference maker, at least until everyone else in the industry adopts it.


Read archived comments (9 so far)
November 21, 2011 11:40 AM Posted by vespajet

Many McDonald's and Taco Bell locations ofter free wifi, as does Chick-Fil-A. If fast food outlets can afford to offer it, why not casinos?

Now when you consider that pretty much every hotel in Vegas that charges a resort fee includes WiFi in the fee, at many properties that resort fee is worth it just for the WiFi since the typical cost per day at most hotels that charge for it is $12-15+ Case in point, the Tropicana charges a $9.99/day resort fee that includes WiFi. To me, that makes the resort fee worth it.

I think hotel charge as much as they do for it in order to drive folks downstairs to the lobby or into their business center and use the internet kiosks that require a minimum of $5 into the kiosk.

My last trip out there, I simply tethered my netbook to my BlackBerry and while the speeds weren't as fast as the in-room WiFi that was $15/day, it did what I needed it to do.

November 21, 2011 12:25 PM Posted by Mitesh Damania

Cosmo was ahead of the rest of the casinos by providing free WIFI. That is one of the major attractions of Cosmo and got the type of demographic that spends money on food and entertainment. The cost of providing WIFI is negligible. How much can a few wireless APs, controllers, and service from an ISP cost? In an era where the internet is omnipresent and ubiquitous, it's as bad as charging for parking in their garage or to receive electricity in their hotel rooms. I can just see their next meeting..

When i book a hotel room, one of the things I check for is FREE INTERNET (and I don't mean in the lobby either). If they don't have it, I will most likely avoid them.

November 21, 2011 4:52 PM Posted by Ted Newkirk

Great article. This makes far too much sense to be implemented, and I think just goes to show how out-of-touch Las Vegas resort management is with the guests and guest experience.

In a world where my local McDonald's touts free wi-fi, it is unconscionable that that any business is charging for it.

I know the train of thought is to ding the convention crowd. Although we'll have to see how that holds up over time. My 4G phone can become its own hot spot ($30 extra a month for the privilege). But if someone travels just a little bit, that will pay for itself.

I think that Cosmo is simply under directive to wring every cent they can get right now and do their best to cut losses. And... they are probably the property most likely to have the guests who will travel with their computer or tablet. And... there probably is something to discouraging people from sitting in their room taking a breather and watching Netflix or YouTube when they want them on the floor spending money on booze and slots.

But... I think over time wi-fi will be considered such a "right" (instead of a privileged) everywhere people go that the hotels will eventually have to cave and offer it.

November 22, 2011 1:20 AM Posted by Jason

What about he idea of comping wifi for your better players? Gold level, 7 star, whatever you want to call it... Being a higher level player, it would be an incentive for someone to stay at a property.

November 22, 2011 2:50 AM Posted by baccarat_guy

For the first time this weekend, I noticed that at the Borg in AC, they were offering free wifi in common areas (casino floor, lobbies, VIP lounges). Can't seem to recall this before. Especially good, since the Amphora VIP Lounge (former Poker Room) is on a 'sub-level' with suspect 3G service.

Of course, wifi in my Water Club (Borgata) room was $9.95 (or $14.95) per day, depending on your speed choice.

November 22, 2011 6:26 AM Posted by detroit1051

Seminole Hard Rock Hollywood offers free wifi throughout the property, including all rooms. Failure to offer what is rapidly being considered a basic necessity is a mistake by Las Vegas hotels.

November 22, 2011 9:05 AM Posted by Dr.Dave

At the end of the day, I think wifi's going to be a necessity once game content starts going into the cloud. It'd be smart to get a jump on rolling it out now, as opposed to two years from now when everyone's going to be doing it.

November 22, 2011 4:05 PM Posted by GolferTrav

Why not tie it into your player loyalty/tracking system by requiring users to log in with their loyalty card number and a password. Upon login, you can have a splash screen with customized offers or promotions. Furthermore, you'd be able to track members that are utilizing the services and aren't gambling enough to break even and focus marketing to those individuals in unique ways. The possibilities are limitless.

November 23, 2011 10:27 AM Posted by Dave

^ That's a great idea.