I think we would all like to know the future—just a little bit of it, at least. Right now, probably like many of you, I think that if I could learn the next winning Powerball numbers in advance, that would be enough. Some of those who have hit the big jackpot, though, would tell us we’re misguided.
And, if you’re up on Greek mythology, you may recall that knowledge of the future didn’t do Cassandra much good.
But there’s a huge incentive for those running businesses to get a peek into the future. If they can get a little ahead of the curve, they can invest more wisely, make more money and presumably be happier. Journalists, too, like to see things before they happen: Getting the big scoop leads to professional recognition and personal validation.
The problem, though, is that the future we see is hardly ever the one we get. Even when forecasts are accurate, the big picture can change so much that they are meaningless; sometimes so many of the small details are fudged that we don’t realize the future is actually here.
Case in point: On June 10, 1996, UNLV’s International Gaming Institute, then steered by founding director Shannon Bybee, held a forum on “Entertainment Real Estate” at the MGM Grand. It was a heady time to meet at the corner of the Boulevard and Tropicana. Over the previous seven years, the Strip had changed enormously. The Mirage, Excalibur, Treasure Island, Luxor, Hard Rock Hotel and the MGM Grand itself redefined what Las Vegas could be: more than just gambling.
Better yet, the change was still unfolding. In various stages of development: Monte Carlo (its grand opening was less than two weeks away), Bellagio, Paris Las Vegas, The Venetian, Mandalay Bay and a new Aladdin.
At the forum, esteemed casino consultant Eugene Christiansen presented a paper called “Pushing the Location-Based Entertainment Envelope.” In it, he made a bold claim: “While you’re in town, look carefully at Treasure Island. You’re looking at the future—the future of Las Vegas, the future of gambling and the future of that portion of the lodging industry concerned with destination entertainment.”
In other words, casinos would transition from being dominated by gambling to offering gambling as only one of many entertainment options. The process, Christiansen argued, was built by the economics of growth. Casinos in previously undersupplied areas enjoyed incredible growth (and fat profit margins) in their first year, but as the market matured, competition, driven by the need to retain those big profit margins, led casinos to add a more diverse array of offerings. Building these new attractions was expensive, and it meant they had to be that much better than the competitors’ to justify themselves.
Christiansen considered Treasure Island the future because of what it had and what it made. What it had: a showroom dedicated to Cirque du Soleil’s Mystère; a pirate village on a lagoon; and a five (or six)-times-nightly pirate battle on that lagoon. All this made Treasure Island, in Christiansen’s estimation, “perhaps the most entertainment-dependent” property in Las Vegas. It was, he thought, competitive with Orlando, shorthand for Disneyfied theme parks worldwide.
As he explained, the entertainment-driven casinos then being built—Christiansen singled out Circus Circus Enterprises and Mirage Resorts as the key innovators here—were more profitable than their sawdust-joint predecessors. Both were shifting visitor expectations, which in turn would lead to even more heavily entertainment-driven resorts.
Taken at face value, Christiansen’s claim that Treasure Island was the future would draw a snort from most people who follow the Las Vegas gaming-tourism complex. It turns out that Treasure Island wasn’t even the future of itself. A decade after its 1993 opening, the property was de-pirated, with the skull-and-crossbones marquee replaced by the current sleek TI sign. The buccaneers versus Royal Navy skirmish was switched out for Sirens of TI, a similar pyrotechnic spectacular with more sex appeal. Sirens itself disappeared a decade after it opened, to make way for another CVS and Marvel’s Avengers.
So the future of Treasure Island in 1996 wasn’t Treasure Island but TI, which is less of everything that made Treasure Island, at first glance, different.
And, as you might remember, family-friendly Las Vegas gave way, around the time of Treasure Island’s de-bootification, to “what happens here” Vegas. It’s at this point that you feel most confident laughing at someone who predicted Treasure Island was the future.
But it wasn’t the theme or the family elements that Christiansen was talking about. Steve Wynn’s then-two resorts (Treasure Island and The Mirage) derived most of their income from nongaming or, as Christiansen styled it, entertainment areas. The average Clark County resort at the time earned 59 percent of its revenue from gambling; Treasure Island got about 42 percent of its revenue from the casino itself.
Adding more nongaming, Christiansen foresaw, was the only logical progression in an age of casino proliferation. Because, at the end of the day, it didn’t matter where the money came from, as long as there was more of it. Christiansen quoted then–Circus Circus Enterprises CEO Glenn Schaeffer as saying, “There’s nothing wrong with giving people more places to spend money in as long as you own all the cash registers.”
Which is precisely where Strip resorts (and, to a lesser but noticeable extent, Downtown casinos) have gone. In 1999, Strip resorts for the first time made more money from nongaming than gaming, and they haven’t looked back since; in 2016, Strip casinos averaged 34 percent of total cash brought in from gambling. Downtown passed the 50 percent milestone that year. So Christiansen was exactly right, and as competition becomes more fierce, he will become even more correct.
We’ve seen the logical progression implicit in Christiansen’s analysis unfold over the past decade: more cash registers everywhere. Free attractions, from Steve Wynn’s erstwhile white tigers and pirate battle to MGM’s own lion habitat, are making way for cash registers, be they burger restaurants or pharmacies. Those registers are even showing up in places once unthinkable. If you didn’t think “parking garage” by the time you got to unthinkable, you have been successfully desensitized to the “Era of Good Fee-ings” that shows no signs of going away.
Paying for parking on the Strip was loudly protested last year, but if you listened closely enough to Eugene Christiansen in 1996, it would have come as no surprise, because there are always people who can accurately foretell the future. But we don’t always allow ourselves to see their vision.