Putting information to work

In the world of Target’s credit card breach, NSA, Neiman Marcus, JP Morgan, and others, it’s easy to lose sight of the role of information in a business.

In my class at Rice, we’ve now moved beyond a basic understanding of compliance, risk, and the applicable laws and policies and on to a discussion of information in action.  “I was gambling in Havana, I took a little risk ….” W. Zevon.  There’s certainly value in meeting the organization’s obligation to comply with law and policy, and manage risk, but there’s more value in getting the right information and using it to your advantage.

Which brings me to Kam Pek, in Macau.  A casino that has focused on the lower end of the market, managing to leverage a lot of small gamblers into a huge monthly revenue (increase from HKD 9million to HKD 100million since 2007).  The casino stripped away some of the glitz (it is Macau, after all), reduced staffing through use of technology, and built an impressive margin.

Where’s the information in all of this? Well, part of it is from exploiting the regulations, which impose a limit on the number of tables but which counts electronic gambling machines as a fraction of an entire table.  Rather than trying to squeeze more revenue from a gambler, they use technology to use one employee to deal to 112 gamblers at machines, rather than to 9 gamblers at a table.  This allows them to reach more gamblers at a lower cost.  Even at a lower minimum bet, they’re able to generate more revenue.

Isn’t business built on exploiting information more efficiently than the competition?

“The Cheapest, Richest Casino in Macau,” Wall Street Journal, February 6, 2014 B1 http://on.wsj.com/1fAzMda


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Filed under Definition, Information, Legal, Operations, Requirements, Use, Value

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