The latest Las Vegas hotel casino to open, the Lucky Dragon, has been up and running for more than three months. It may not have the immediate landscape-altering impact of the Strip behemoths that preceded it, but the way the casino is running could have profound implications on how Las Vegas casinos do business in the future.
Lucky Dragon debuted with the usual opening festivities, but a lion dance and dragon dance signified in no uncertain terms that this casino would cater primarily to Asians and Asian-Americans. It is a curious moment for an Asian-oriented casino in Las Vegas. Until the Chinese government’s 2013 anti-graft crackdown, both Macau and eastward-leaning Las Vegas casinos were enriched by a flood of baccarat money. Since then, however, the influence of the high-end Chinese market has been diminished. But none of Beijing’s actions could obscure the rising power and wealth of the Chinese middle market. It may be auspicious that Lucky Dragon opened the day after Hainan Airlines’ first nonstop Beijing—Las Vegas flight landed—many hope this will lure the vacationing Chinese middle class, who will make up in numbers what they lack in individual prosperity.
According to Lucky Dragon Chief Operating Officer Dave Jacoby, the casino has, in its first three months, followed a positive buzz around opening with “great word of mouth.” Lucky Dragon, he says, is seeing rapidly growing interest from near and far: Las Vegas locals as well as Northern and Southern California, Vancouver, Toronto and New York.
As with all young casinos, there are already some changes in the making. It’s nothing that rivals Steve Wynn’s $67 million addition of the Encore Beach Club months after that casino’s opening, but in Lucky Dragon’s small footprint, all changes are significant. The space currently occupied by Dragon’s Alley will be split into a noodle bar and a relocated Pearl Ocean restaurant. The space that Pearl Ocean is vacating will become a new VIP gaming area.
The biggest change at Lucky Dragon, though, is the rolling chip program initiated for players with a $10,000 or higher buy-in, which changes how players are rated for comps. It is a Macau idea that has since filtered to Las Vegas, but has not been embraced systematically by a Nevada casino until now. Traditionally, a pit boss or other executive will watch table players, estimate their rate of play and average play, then base comps and discounts on that rating. This is an imperfect process that sometimes benefits the player, but often doesn’t. According to Jacoby, the rolling chip program eliminates guesswork by tracking play more closely. “If you buy in for $100,000,” he explains, “you get $100,000 in dead chips. You wager what you wager. If you win, we pay in live chips [that can be played elsewhere or redeemed for cash], and we take your dead chips. It ends up being a perfect accounting process.”
Once a player has exhausted his dead chips, he can buy in for more dead chips and continue playing. The result is a more accurate win/loss rating that, according to Jacoby, has already proved popular. “It has been very well received,” he says. “The win/loss is accurate and guests understand how they will get comped before they come in.” Jacoby says that while another Las Vegas property has sporadically offered a rolling chip program for select guests, Lucky Dragon is the first casino to offer it as a matter of course. “We’re doing this several times a day,” he says.
The adoption of this Macau idea and its subsequent popularity may explain why Lucky Dragon is adding VIP space three months in. “The volume of VIP gaming,” Jacoby says, “has exceeded our expectations.” He is enthused by the support the casino has gotten from the local community and guests from all over the world and adds that, despite the property’s avowedly Asian focus, “we welcome guests of all ethnicities.”
The smallest and most focused Las Vegas casino to open in a long while, Lucky Dragon is a test case for the future of casino design in Las Vegas. The apparently enthusiastic response to its rolling chip program may inspire other casinos to roll out similar programs on a broader basis.
So, while Lucky Dragon may be small in stature, it already has the potential to influence the broader Las Vegas casino business—a sign, perhaps, that it is destined for success.
David G. Schwartz is the director of UNLV’s Center for Gaming Research.