The North American table games market has shown remarkable resilience and growth, with a 31% increase in Q4 2023 revenue compared to Q4 2019. This increase also extends across the full year of 2023 vs 2019 by 23% as reported by the AGA Commercial Gaming Revenue Tracker.

This growth is largely attributed to higher table minimums, which have been more than 25% above pre-COVID levels, compensating for fewer open hours due to dealer shortages post-COVID. As the dealer shortages ease in many jurisdictions, it is important that executives continue to review and re-assess their pricing strategy.

In this blog, we will review in more granular detail the trends to the operational KPIs from Q4 2019 to Q4 2023 and then review some practical examples on how to leverage data to continue to optimize table pricing and open table hours; in many cases counter-intuitive decisions to lower limits.

A Financial and Operational KPI Timeline: 2019 Q4 to 2023 Q4

In a previous blog, we assessed the impact of increased table pricing in light of the COVID restrictions had on revenue in the quarters, immediately following the closures and then into the periods following restrictions being lifted. In both instances, it was observed that the significant increase in table pricing offset the reductions in open table hours, and occupancy to maintain overall revenue by driving up win per open hour WPOH, allowing the operators to service the highest quality of the player base.

Now, three years post-impact that the COVID-driven restrictions imposed on how operators strategize their open table hours and pricing, what is the current landscape, has pricing reverted back or has it sustained?

First, we need to understand how table hours, patron hours and table occupancy compare to pre-COVID demand using the North American market. In the chart below, we used Q4 2019 as the benchmark and tracked the relative changes as a percentage for each of the following quarters. Since 2021 Q2, we can see that the overall trends has relatively stabilized with patron hours reduced by 30%, open table hours 20% and the average table occupancy inline with Q4 2019. Note, we see that after nine consecutive quarters of relatively consistent operational KPIs, 2023 Q3 and Q4 showed an increase in open table and patron hours but these are still below the Q4 2019 benchmark.

Despite reduced patron and table hours, revenue has not declined thanks to a 30% increase in table minimums. This strategic pricing has effectively kept revenue levels stable.

The chart below shows that since Q2 2021, patron hours were reduced to only a 30% gap during Q2 of 2021, this created the tipping point to exceed 2019 levels for overall win. This has maintained for the past two years.

Given the limited supply of open hours and table spots, it made sense to price aggressively to prioritize higher valued clientele. Now that open hours have returned back to pre-pandemic levels, table pricing has continued to be 30%+ higher. Is it time to revisit your pricing strategy?

Optimizing Table Pricing Requires Data-Driven Strategies

This section provides a simple framework to help evaluate your table pricing strategy. Each property must tailor its pricing strategy to the demand of the product. Software tools such as TYM can help manage the table limits dynamically as demand fluctuates. However the pricing assessment matrix can at quickly determine the effectiveness of your current pricing strategy.

Example: Weekday vs Weekend Pricing Strategy

Below is a grid that highlights some important KPIs that are useful in updating your pricing strategy. The goal is to prioritize your higher segments first but ensuring that all of your table minimums have an optimal occupancy and sensible empty table percentage so that players are optimally spread out to maximize profits.

Mon to Sun - All Hours

Overall, we see 9% of hours being allocated to $25, 15% to $20 and 75% to the $15 and $10 table minimums. The $25 table has 37% empty table percentage and a significantly lower average occupancy of 1.4. The $10, $15 and $20 tiers have a 50% higher average occupancy of 2.2. 

While we see the highest theoretical win per open hour for the $25 pricing tier, ~37% of open hours are sitting empty, and it’s marginally better than the $20 pricing tier. 

Sun to Thurs - Peak Hours (7pm - 2am)

While filtering down to specifically Sunday to Thursday and on peak gaming day hours, we see that the empty table percentage increases as the table minimum increases, starting at 8% on the $10 tier up to 36% on the $25 tier. The data is indicating that our clientele is price sensitive during the weekday. The theoretical win per open hour has a smaller gap between $20 to $25 then from the other tiers. This is due to the high amount of empty table hours.

With nothing supporting an increase is theoretical net contribution between the $20 and $25 tiers, reducing, or eliminating the $25 offering would shift those hours and play time to increase occupancy on the $20 segment resulting in a more profitable segment while also providing a better customer experience. 

Conversely, when looking at the weekend crowd, we have a different story.

Friday & Saturday - Peak Hours (7pm - 2am)

On weekends, we are seeing an increase in $25 table hours to represent 21% of open hours. Double of what is offered during weekdays. We also see a reduction in the empty table percentage to 23% and an increase in average occupancy to 1.8.

The opportunity here is not with the $25 segment, but rather the lowest tier at $10. We see that the $10 tier has about 8% of open hours only but the average occupancy is slightly less than the $15 segment. This indicates that we should be converting all tables to $15+ earlier than 7pm and help spread out the players on the $15 and $20 segment. This weekend player group is definitely less sensitive than your weekday players.

Conclusion and the Unmet Demand

We reviewed a specific pricing examples to illustrate that the pricing strategy needs to be reviewed at an area, game type as well as day of week. Based on the data, it will be situationally dependent whether the pricing should be lowered, remain the same or be increased. However, at the start of this blog, we have seen that the overall market has an increase of 30% higher table minimums. The question remains, is there unmet table demand and how can we capitalize on this unmet demand?

Many operators have increased their offering of electronic table games (ETG) over the past few years, to cater to the lower average wager guest. For some great insights and an in depth analysis of ETGs, please read our recently published blog, Unlocking the Potential of Electronic Table Games: Strategies and Insights.

This framework when reviewed on a regular basis will always ensure that you have the right product for the right customer, at the right time, for the right price!