Casino Industry

April 9, 2018 Law

Competition in the Casino Industry has been intensified since the business landscape has changed tremendously. Changes in the industry include the increasing legalization of gambling activities and the alternatives available in the industry such as internet gambling and the waterborne casinos. The first issue which affected the competition in the casino industry is the legalization of gambling activities. This has affected the threats of the new entrants since more businesses is able enter the industry without the law restrictions.

However, although it is relatively easier to enter into the industry, but the large amount of capital required for building a casino and the current companies in the industry poses certain issue for new entrants. Thus, the threats for new entrants remain relatively medium. Comparatively, the bargaining power of buyers is considered medium. Although there are several other forms of gambling games available; such as Orlando, New York, Native American Casinos and waterborne casinos, but all these belongs to different sector of the industry. In general, these various casinos cater to different types of visitors.

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Furthermore, visitors have little say in the pricing of the casinos thus, bargaining power of buyer can be considered medium. Contrastingly, the bargaining power of supplier in the industry is low. The only supplier in which casinos may have can be related to the normal furnishing of the casinos and perhaps the food supplies. However, bargaining power of supplier is relatively low since the casinos are still relatively dominant and they have more advantage over the small suppliers. The most prevalent issue in the case is the threats of Substitutes.

Since the legalization of the law, more gambling and other form of gaming is also flourishing across the nation. Gaming on tribal lands had attracted customers to patronize. Furthermore, gaming machines at racetrack, internet gambling, waterborne casinos are also on the rise. Thus the threats of substitutes are relatively high. Lastly, the competitive rivalry in the industry is seemingly high. As illustrated, most of the casinos are undergoing facelift and trying to outdo each other in terms of the luxury, the size and the offerings they provide.

Other gambling business such as the waterborne casinos is also in the competition in offering a lower cost for their gaming facilities. Moreover, the Native American tribes are also offering unique gambling experiences at their tribal island. Thus, the massive influx of competitors increases the competitive rivalry and thus it is considered high. In a nutshell, threats of substitutes and competitive rivalry appear to be the highest threat and the bargaining power of suppliers is relatively low.

Reviewing the five forces, competitive climate is vicious. Consumers have more choices of gaming to choose from and this forced companies the need to constantly improve and innovate on new incentives to provide customers to gain loyalty. Thus, companies require strong financial structure in order to remain competitive. Casino industry still remains a lucrative business, as long as company is able to build their empire and captivate the needs and wants of consumer, they will be able to emerge winner in this industry.


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