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Peppermill, Atlantis opt to run race and sports book

Jun 10, 2013

When it comes to running a sports and race book, many of Northern Nevada’s casinos opt to contract with an outside operator.

The two titans on the south Reno skyline — the Peppermill and Atlantis — would rather do it themselves under their own brands.

For them, it’s a matter not only of control but, in Atlantis Casino Resort Spa executive David Farahi’s words, “differentiating ourselves” in a hotly competitive arena of ever-bigger TV screens, plusher amenities and more giveaways linked to other services inside the resort.

“You can’t do that everywhere. We can do things no one else can do,” said Farahi, chief operating officer of Monarch Casino & Resort Inc., owner of the Atlantis. “At the end of the day, the sports book isn’t a huge revenue generator, but it’s something our guests enjoy doing. We’ve always prided ourselves on our service, and we think we can offer a higher quality product.”

The Peppermill Resort Spa Casino’s race and sports book, which opened in 2000, links the south Reno casino with books in the privately owned company’s other casinos, Western Village in Sparks and three sites in Wendover near the Utah line.

“Our strategy is: Customers want the whole experience” — gaming, lodging, spa, restaurants, conventions, said Terry Cox, director of the book that recently added a dozen new TVs.

“That’s what we feel they want,” he said. “Times are changing. It used to be all about casinos; now, it’s the whole resort. Sports books are, by no means, cookie-cutter, but there’s enough people who say, ‘I can go to a Starbucks or I can go to a locally owned place for a latte.’

“There’s a personal touch, and there are those who’d rather deal directly with people who operate it locally.”

Nevada Gaming Control Board data show that statewide, sports book wagers nearly doubled from 2003 through 2012 to $3.45 billion.

That growth helped prompt last year’s $53 million acquisition by Britain-based William Hill PLC of three third-party businesses, Leroy’s, Lucky’s and Club Cal Neva, with more than 160 sports and race book locations statewide.

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Industry observers say it takes monetary muscle to go it alone in the sports betting business. They say it makes sense for smaller operations to outsource to companies like William Hill, whose Nevada operations are based in Las Vegas and whose worldwide operations offer a vastly deeper betting pool and resources that lessen the risk to individual casinos.

“There’s a lot of appeal to outsourcing given the level of expertise and costs,” said Richard Wells, president of Wells Gaming Research in Reno. “Typically, books are not highly profitable but viewed as something you need to have to offer a full complement of services. A William Hill-type of operation allows small casinos to offer that.”

Reno gaming analyst Ken Adams cites the economics of scale.

“William Hill can set the odds for hundreds of casinos as well as one,” he said. “The economics are pretty expensive. When you get down to the level of a small casino, it’s pretty expensive to run. But the Peppermill and Atlantis are pretty aggressive with their sports books.

“Yes, it’s a way to differentiate yourself with an identity customers can see, and that’s big for the Peppermill and Atlantis. But the downside is, you can never offer as many wagers as a William Hill. They are a brand in itself.”

Other major resorts in the region run sports books through their corporate bases that include numerous locations, including Harrah’s and the Silver Legacy Resort Casino, which operates its book under the name MGM Mirage, its financial partner in the 35-story downtown Reno property opened in 1995.

William Hill operates inside more than two dozen casinos across Northern Nevada, from the Grand Sierra Resort, Eldorado Hotel Casino, Siena Hotel Spa Casino, Sands Regency and Boomtown Casino and Hotel in Reno to John Ascuaga’s Nugget in Sparks and Casino Fandango in Carson City.

“They offer a fabulous gaming amenity to my players,” Dean DiLullo, president of M1 Gaming, owner of Boomtown, said of William Hill. “We are able to offer a quality amenity without having to run a sports book myself and take on the risks associated with wagering and the costs of labor.”

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Even with a third-party operator, Boomtown has joined in the race to renovate its sports book, DiLullo said, adding new carpeting and other improvements.

And, last month, the Grand Sierra Resort and Casino completed its own work, part of a $25 million facelift to the entire property, to expand its book to cover nearly 13,000 square feet with two glass-enclosed VIP rooms and space for up to 660 people within view of 73 big-screen TVs.

Against the backdrop of growth in tribal casinos in California, Cox said the region has one advantage: sports wagering is illegal next door, and that offers more incentive to keep improving sports books.

“It makes sense to have a nice book,” Cox said. “Our owners decided, and so far they’re right, that they can build all those casinos in California but they don’t have sports books. If you want to bet on the 49ers, you have to come here to do it. So, our owners don’t want to give that up.

“We still have a lot of loyal customers who drive up here from San Jose, San Francisco and Oakland. Think about how many casinos they pass to do that,” he said. “We’re a gambling business. We don’t mind taking that risk.”

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