Today, casino restaurants are more of a draw rather than the afterthought they may have once been. The cheap, old-school buffets of the past have given way to higher end, full-service, chef-inspired restaurants that are more of a destination.

As a result, these foodservice operations have become multimillion-dollar investments that are paying off. With casinos becoming more diverse entertainment centers, operators continue to add premier live entertainment and other events as well as cash in on expanded food offerings.

“Branding with chefs makes it more of an upscale experience,” says Ron Santibanez, CEO, Profit Line Consulting, Moreno Valley, Calif. “Going back several years, casinos wouldn’t use food as a hook to get people in. However, now these restaurants are becoming a destination and driving people to casinos. These foodservice operations also are keeping up with industry trends and, in some cases, are even ahead of the curve.”

Casino foodservice evolved when restaurants became a part of gaming centers’ brands; customers seek their favorite eateries, even when these venues become part of a larger operation. In addition, when popular chains partner with a casino, it can be beneficial for both operations.

“When I work with casinos doing foodservice, it’s a little more focused since we’re dealing with so many different operations within it,” Santibanez notes. “It may have a food court, fine dining and/or mid-level dining. There may be a sandwich place, seafood or a steakhouse. Different and separate kitchens may be operating at one casino, providing different types of cuisine. This can result in operational issues for those casinos that are stretched too thin.”

The emphasis among today’s casinos is on creating a place where people not only play but also stay. A restaurant can help bring people in the door and create profits from those who are not hitting the tables, too.

It stands to reason that upscale casino restaurants with serious traffic will require durable, high-end equipment. With many operations running around the clock with no downtime, these units need to be reliable with minimal breakdowns. Also, ideally, multipurpose equipment is best for more diverse menus and those that are not static.

Not only do casinos typically purchase equipment in multiples to handle continuous and high-volume traffic, but also custom units are becoming more common. This is especially the case in the increasing number of open kitchens with display cooking.

According to Los Angeles-based IBISWorld’s January 2023 report “Casino Hotels in the U.S.,” industry revenue has decreased an annualized 0.2% to $80.9 billion over the past 5 years, mostly due to the pandemic. The segment did, however, experience an increase of 2.7% in 2022, and profit margins are expected to reach 13.1% of industry revenue this year. IBISWorld projects casino revenue to grow 1.9% between 2023 and 2028.

Several key trends continue to impact the casino foodservice segment. According to IBISWorld, operators have attempted to attract the younger generation by staging concerts, parties and other large events. This gives foodservice operations even more visibility. Also, casinos continue to focus on amenities that set the operations apart to compete in this growing segment.

With food and alcohol comprising 13.2% of casino sales in 2022, according to IBISWorld, it’s still predicted that nongaming amenities will be at the forefront in creating more revenue streams. These extra attractions will help casinos differentiate themselves from the competition and draw a larger demographic for fine dining as well as gaming.

“Casinos try to appeal to the masses with handheld foods, like the typical burger, chicken wings and fries,” Santibanez says. “But food also has become more sophisticated, with the segment paying attention to what’s going on in the industry overall. As a result, we’re seeing phenomenal Japanese restaurants with sushi and high-end steakhouses in casinos.”

Some of the larger casino restaurants operated by world-renowned chefs have the potential to generate higher revenue than other dining options, IBISWorld reports. The bottom line is the ambiance of gaming rooms and the hospitality, food, drinks and entertainment options available to patrons plays a critical role in drawing customers.

Santibanez says he’s seen some casinos incorporate food courts, which can work out well, depending on the level of service provided. “Different skill sets are required for various types of operations,” he explains. “For example, the manager needs to be able to handle fine dining, mid-level, quick-service and fast-casual concepts; that’s the biggest difference between casino foodservice versus a traditional restaurant.”

Santibanez adds that while some do this very well, those who don’t may struggle. “There may be confusion, and product consistency may suffer,” he says. “That’s the challenge with so many different types of operations under one roof. Many do a good job in branding and marketing; branding is very important.”

The challenge of obtaining and retaining skilled employees adds to staffing issues. “Not only does everyone have difficulty finding qualified employees and holding onto them, but the labor rates are so high,” Santibanez says. “It becomes a question of how automated we can get by incorporating sophisticated combi ovens, fry stations and flat tops. This is something that the casino foodservice segment is looking towards making great strides in and that will minimize work staff.”

He notes an influx of new and high-tech equipment in the industry, but operators may find it challenging to keep up with what’s new. “Now, it’s all about minimizing labor,” Santibanez says. “Automated fry stations were created back in the ’80s; now everything is becoming self-contained.”

This type of equipment evolution means that the difficult task of hiring a large, highly skilled labor force would not be as crucial as it has been in the past. “The industry is trying to simplify things as much as possible with pre-prepared food and multiuse equipment,” Santibanez says. “If you can have a smaller hood for equipment that offers multiple uses, you’ll be ahead of the game.”

Indeed, ongoing equipment innovation continues to positively impact casino foodservice. “The industry is still innovating combi ovens for multiple uses, but this also is the case for griddles, fryers and other equipment,” Santibanez says. “Also, ordering technology [has seen many advancements]. When ordering off a smartphone, mistakes are minimized, but so is the interaction with employees. In some cases, this can be a mistake.”

When looking at efficiencies and increasing table turns, though, point-of-sale systems and online ordering can be more effective. “Many things we do are service related, so in looking at these operations, I look at efficiencies, training and overall service level,” Santibanez says. “Sometimes I see there is room for improvement. I’ve seen casino restaurants run very well, but a handful have a tendency to struggle with efficiencies. It’s all about the guest experience.”

With the growing
acceptance of gambling and online betting becoming more popular, industry operators will need to find new ways to attract consumers to land-based locations, according to IBISWorld. Foodservice may be the answer.