Monday, December 12, 2016

Montreal Casino Gambles Away Your Money

The provincially-run casino in Montreal was a big success when it opened in 1993, but has since declined to a degree with adjusted revenue falling over time and for managers of the enterprise a distressing state of affairs, where executive bonus' and indeed job security is based on increased profits.

I cannot say that that lower sales and profits are a bad thing, just as I wouldn't complain over falling alcohol sales at provincially-run liquor stores. Declines such as these should be seen as a positive societal tendency, just as falling cigarette sales, even with the loss of the massive taxes attached is also a good thing.

But the reduced popularity of these "sins" certainly has a negative effect on government revenues and while it would be unconscionable for the government to encourage more smoking or drinking in an attempt to boost tax revenue, somehow encouraging people to gamble away their pay-cheque seems more palatable.

The Montreal casino was and remains a particularly grim place, patronized mostly with hardened gambling addicts, almost all locals with a particular over-representation of Montreal's Asian and Hassidic communities.
There's a palpable pall of sadness and desperation in the atmosphere where unsmiling pensioners feed the slot machines like zombies and gambling addicts of various degrees, toss good money after bad, unable to stop themselves, never quite able to sate the urge to lose. 

As for tourists coming to town and making big donations, the options for real gamblers outside Quebec are much more inviting, and no sophisticated gambler or "whale" would consider Montreal as a destination because of it's long gaming odds and smoke-free policy. Tourists do make up almost a quarter of visitors, but they are there for one-night's entertainment and are not particularly big contributors.

The Montreal casino is a far cry from the glitzy entertainment and gambling centres of Las Vegas, which make their money equally from lodging and entertainment, with nightclubs, restaurants, pool parties making up a significant part of the revenue stream.

But the casino as a gambling centre does serve a purpose, it relieves local gambling addicts of money that would otherwise be lost to out-of-province casinos and that is hundreds of millions in revenue best kept in Quebec.

The casino has tried to widen its customer base (something that we all should object to) by promoting entertainment and has failed miserably, clearly its clientele is not the carefree vacationers looking for a good time as is the case of Las Vegas.

Desperate to boost it's appeal the casino recently spent some $300 million sprucing itself up in the hope of re-inspiring customers, but so far the plan has failed to bear fruit.

Now the casino is taking another expensive gamble, opening up the glitziest of glitziest of restaurants and has imported a French master chef to oversee the project, one that will cost untold millions in the vain attempt to lure the rich and carefree to a world class restaurant that runs patrons upwards of $500 per couple.

This plan is, in gambling jargon, a longshot and will likely be another financial fiasco when all is said and done, whether the restaurant eventually shutters or survives.

Casino Restaurant to cost taxpayers big $$$
The local culinary community is furious over the importation of a famous French brand, complaining bitterly that a local chef could do as well, but that fact, true or false, is thoroughly beside the point.

The restaurant Atelier de Joël Robuchon  can never make money, even at capacity, the expenses are just too ridiculously high.
Those in the industry know that with the vast investment and publicity campaign (at public expense), coupled with overpaid unionized cooking and wait staff, plus the enormous fee to the celebrity chef, the restaurant is at best a device meant to drive attendance into the casino.

Clients who do patronize the casino restaurant as a destination, rather than an adjunct to gambling, do so at the expense of our small exclusive community of expensive French restaurants in the greater Montreal area. It is the ultimate example of unfair competition, the government pirating clients away using the restaurant as a loss leader.

I wonder what Montreal area car dealers would think of a government run car dealership that ignored the laws of business, stole clients via massive advertising, plus promotions and loss leaders, all paid for by taxpayers?

Read an excellent article over at EATER.MONTREAL

When governments run restaurants or any business that compete with private enterprise, can they ever be successful?

Let us examine the case of the Hélène-de-Champlain on  St. Helen's Island, a historic building owned by the City of Montreal and leased out to a private restaurateur successfully for 27 years.
When the lease ran out a few years ago, the historic building was shuttered and a $7 million dollar renovation undertaken, which ballooned up to $16 million, all at public expense, with the auditor general characterizing the overspending as"catastrophic."
That renovation was finished last year, but the building remains unused because as a restaurant the project made no sense considering the investment.
So what does the City of Montreal do?... It comes up with a new plan and invests another 10 million dollars to convert the place into four banquet halls, something that might work if the $26 million investment is written off.
And who is to say that cost for this new fantasy project won't balloon as well. Link

But no matter, even with writing off the investment, the project won't work because as we all understand, the government cannot compete with private industry in the hospitality industry, nor come to think of it, in any industry at all.
And then again if the city runs a banquet hall facility at a loss, all it does is hurt those in the legitimate banquet hall business. Perhaps the government might abide by the old medical adage to "Do no harm"

And so the misguided folks at Loto-Quebec view their mission as making the casino more successful by augmenting gambling, when the real goal of the agency should be to control gambling and to provide just enough opportunity to those Quebecers so inclined to gamble, but nothing more.
The same for the SAQ, which should not be promoting more alcohol consumption by attempting to draw in new customers, or boost consumption via promotions and loss leaders..

A few years ago the SAQ was persuaded to abandon the sale of alcohol related products such as glassware and decanters, because of the direct competition with the private industry and the casino should be held to the same standard.

As for celebrity chef Joël Robuchon I'm quite sure he negotiated himself a sweet deal and win or lose, success or failure, he'll come out well-compensated for his efforts, unlike celebrity chef Mike Ramsey whose private industry venture at the old Laurier BBQ restaurant in Montreal flamed out brilliantly with lawsuits abounding.

If the new casino restaurant fails, taxpayers are losers.
If the restaurant succeeds in luring more Quebecers to the casino, to gamble away their money, then we as a society lose as well.

1 comment:

  1. I am not in Montreal anymore, so I may lose touch with what is going on there. However, I have two questions for you, Philip:

    1. You wrote, "...no sophisticated gambler or "whale" would consider Montreal as a destination because of it's long gaming odds..." How is it gaming odds in Montreal Casino is longer than in any other casinos in the world? After all, a roulette is a roulette, is it not?

    2. How does Montreal Casino situation compare with Casino Lac-Leamy in Gatineau? Every time I read advertisement about Ottawa (even the one published by the municipal government), Casino Lac-Leamy is always included even though it is located in other province.

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