A few years ago I was at a real estate investing meeting when a guy came in and talked to us about a casino that he was opening. He was looking for capitol for the casino and in exchange for money he said he was willing to exchange equity in the casino.
After a few conversations we worked out being a part of this deal. I am not going to get into all the details of how this came about at this point. I have written about it in the past and I am sure you can find the articles here or on my Facebook page.
This post is not about the casino itself. It is about some of the experiences that I had while I was up there in Cripple Creek, Colorado and the whole world of casinos and gambling. To be clear, I actually like this whole topic. I think it is fascinating. You will not find a high horse speech about how people shouldn’t gamble on this blog.
The truth is I still gamble a little bit but I know that I am likely to lose whatever I decide to gamble with and there are times when I might win a little bit or with a ton of luck I could hit that huge jackpot that everyone hopes for. I would never go gamble the rent money though.
While I was in Cripple Creek,Colorado I learned that there is a ridiculous amount of money to make in the casino world as the casino owner however it is a pain in the ass to get it done. The amount of money to get a casino started is staggering. To give you an idea it cost about 15,000 dollars a month for the electricity bill. That covers nothing else. You’ve got to have enough money to pay out any jackpots that might happen.
You have to have money to pay your employees, for all of the licenses(which cost a ton themselves) all of the alcohol that you’re going to serve.
Keep in mind too that there were fees to get the business Licensed and it had to pass the fire codes. The system alone cost more than $30,000 dollars for that. You also can’t just have a casino. You must have a hotel and a restaurant and entertainment too if you want your casino to be able to compete with the local casinos. None of these things are cheap to get set up but they are an amazing cash cow once they are set up and running properly.
There are a lot more expenses too but I am not going to get into those right now because I am guessing that you don’t really care about all that too much.
While I was in Cripple Creek we decided that we could use some money and we got jobs at another casino in the town. We were working with the management team and we routed out some rotten apples in their staff. We were also learning a bit about the world of casinos while we were there.
One thing that surprised me was that the mafia has been forced out of casinos to the extent that they can be. The federal background checks for the licensing is rigorous and you have to have all of your information from the time you turned 18 to get the license.
That doesn’t mean the mob isn’t still involved at some level somewhere but they have to work through loopholes now if they are still involved.
I personally don’t gamble much now. Not for the reasons that you’d think though. The machines are all federally regulated and if they move an inch on the floor the government wants to know about it. The machines are random. Every spin is random therefore there is no such thing as being on a winning streak. The people who win at the slot machines would often tell me that they are on a streak now that they won a few times so they had to keep playing or they might not get the most out of their bets.
This always ends the same if they don’t walk away. Not only do they lose the initial bet but they lose anything they might have won. The funny thing about Vegas and the casino world is that if you put a dollar in the machine and you win fifty cents you will then gamble away both the dollar and the fifty cents because you think that you’ve hit a streak. In any other arena on the planet a 50% return on your investment is awesome and you would walk away happy. Not at a casino though. If you make an additional fifty cents on top of your dollar at a casino that little voice in your head kicks in and says I won I think I can do it again! Then you win again a few rounds later for a net gain of another fifty cents. That is now a 100% return on your initial investment of a dollar but that little voice now says WooHoo Now I am on a streak and a few rounds later ever last dime is gone!
The machines themselves are tricky on a psychological level too. You hear those bells ringing and people winning. You start to play. You put $1.00 in the penny slots (Which have the worst odds by the way) Then you play your pennies 10 cents or 20 cents at a time. You win a nickel! WooHoo! You feel like you are winning but you forgot that you have spent 20 cents when that bell rings. Those bells mean you’re winning and the machine tells you that you won and it tells everyone around you that you’re winning but it never mentions that you lost fifteen cents when you won that nickel and no one is doing the math on this while they are getting a bit drunk sitting at a slot machine.
Another interesting thing in Las Vegas is that you will never find a clock on the wall or a window that isn’t tinted. This is so you lose track of time and you will stay in the casino longer. Booze is an interesting subject for the casinos because most of them would let you get as hammered as you like while playing their machines but the government has stepped in and said that that is not okay so if you get completely sloshed while playing the games you can expect to be asked to leave so the casino doesn’t get in trouble.
So I don’t gamble because I am not into having my head messed with and the odds stacked against me while I am trying to make money. Like I said earlier I will gamble but I know the game well enough to know that I shouldn’t drink while I am doing it and I know some of the tricks that make it look like your winning when in reality you’re actually losing.
The casino owner side of the table is completely different. That is world in itself. You may remeber the old saying, “The house always wins” That is the casino owner side of the table. The interesting thing is that if you have enough money and a few great connections in the right part of the United states it isn’t too hard to get yourself a small casino up and running.
Obviously it has to be really legal and above board or you will find yourself in jail and with massive fines but if you have a clean background and live in a place like Colorado you can get it done as long as you have some really deep pockets for operating costs and start up costs. The biggest trouble is getting the money for the jackpots that the state requires and getting all of the machines onto the floor.
The slot machines are highly regulated like I said earlier. There are seriously forms to fill out if a single one moves even a little bit. Another huge expense in the start up cost is all of the security equipment. You have to have a camera on everything. No blind spots on the gaming floor will be tolerated by the state that the casino is in.
I just through this part in so you could get a feel for what it is like on both sides of the table. Some of the casinos in Cripple Creek, Colorado would pull in an easy million on a weekend. The employees of the casinos up there in Cripple Creek always thought the casino was just rolling in the money but they never thought about any of the expenses that the casino had to pay in government fees, operating expenses or any of the other expenses that come along with owning a casino. I am sure they spent a couple of thousand dollars a month in popcorn alone!
One quick story before I wrap this up top share with you what some people are like when they like to gamble and have more money than they know what to do with.
There was a man who would come into the casino that I was working with/for. This casino was not the one that I had ownership in. It was the one I went to work with to help them out for awhile. This guy would come in at least twice a week. He would sit down with whomever he brought with him and he would drink all night long.
He had a personal waiter or waitress that would come and serve him. He would pump money into these machines. I am talking a lot of money. Sometimes as much as $30,000 in a night. Which is the point of this story. This guy got too drunk one night and kept putting more and more money into the machine. Then the machine stopped taking his money.
He called a slot tech to fix the machine. The slot tech then had a delicate subject to discuss with the patron. See the slot tech had to tell him that he had to push the buttons to play the machine because he had maxed out the limit of money the machine could take with out playing the game. To insert more money he would have to gamble some of it!
You know his excuse for gambling so much? He liked to watch the numbers spin…
I don’t gamble much any more, not that I was ever someone who gambled a lot. I am no longer a part of that project either and I am really glad that I am not. Now I am on to things that i find a lot more fun and I really like passive income way better than earned income. So I spend my time blogging and helping people blog and travel. Freedom is what I am a fan of. I like to be able to go places that I find interesting when I want to. I like not having to answer to a boss day in and day out.
To me 40 years is way too long to work for a single person or company. If that is what you want to do then by all means stick with that but if you’re looking for a way to make money while you’re sleeping then check out the link below this post.