It is not a secret that casinos have been investing a lot of resources into catering to their Asian clients, but should it be acceptable for them to actively and aggressively try to pull Asians into their gaming facilities? According to any article from The New York Times, the recent promotional blitz by Las Vegas toward the Asian community has created emotions ranging from concern to downright extreme anger.There are basically two ways in which Las Vegas casinos are able to lure in and keep the business of wealthy Asian (mostly newly rich Chinese) and Asian-Americans. One is by creating an enjoyable experience inside the casinos. Second is targeted advertising to the Asian demographic.
The first method strives to create an "Asian friendly" environment inside casinos. This method is one that I have absolutely no problem with what-so-ever. The first and most important rule of thumb in running a successful business is to "know your customer," and casinos can not be blamed for spotting the tremendous amount of cash inflows from their Asian clients and creating a more "user friendly" environment.
The second method involves special societal-based advertising campaigns. This is where the slippery slope of ethics begins, and I for one, have a hard time blaming the casinos for their marketing campaigns. The article gives example of Las Vegas and Atlantic City casinos using advertisements in Asian dialects; advertisements placed in community newspapers in nearby cities; and mailers written in a recipient's native language.
Both of the above methods are creating a stir among many who believe that the Asian community is being unfairly targeted as a demographic group that is both more likely to gamble heavily, and more apt to developing gambling addictions. But can casinos really be held accountable for the gambling habits of their guests? After all, is it not understood by everyone that gambling is a recreation that poses both risks and rewards? Is it not universally understood (even by addicted gamblers) that the house always wins?
I for one think that the casinos are not breaking any moral obligations by catering, and aggressively marketing to the Asian community. Should casino companies such as Las Vegas Sands Corp. (NYSE: LVS) and MGM Mirage (NYSE: MGM) be criticized for seeking out the most lucrative players, even if it does mean targeting one ethnic group, or commended for trying to make as much money as they can? What about Harrah's Entertainment Inc. (NYSE: HET) which created what its chief executive described as "the country's first authentic Asian gaming pit" at the beginning on 2006 in its Showboat casino in Atlantic City?
Maybe if this were any business other than casinos I would be more likely to lean toward the view that they are unfairly reaching out to one group over the other, but come on... these are casinos we are talking about. Unlike other companies that make money by selling goods and services, these companies make money by winning money, and they make no excuses for that, so why not go after the big whales? No one likes to fish for guppies after all.
Michael Fowlkes has worked as a stock trader for seven years and spent the last two years working as an analyst for the online investment advisory service Investor'sObserver.
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