Note from Jeffrey Compton: Two hours after we published this column (and posted in The Flash) we received a note from Sarah M. Regan, CPPL, McCormick & Sons Ins. Agcy Inc. (and on-going adviser to CDC Gaming Reports) that the column below should have stated that Airbnb hosting may be in violation of local ordinance (including homeowner association regulations). It should also be noted that many homeowner’s policies do not cover claims incurred from “commecial” activities, in other words “Your HO policy maybe has $500,000 of liability coverage per occurrence, however, if your ‘paying’ guest falls down the stairs you are not covered.”

I had houseguests last weekend. Bill and Holly are from Cincinnati and are visiting their daughter, a student at the local college. They, like me, are 59 years old and share an interest in the arts. They loved my guestroom and the omelet breakfasts I make in the morning. I really enjoyed chatting with them – and what I like even more is the roughly $100 check I will be receiving later this week. That’s because Bill and Holly were paying houseguests, not friends or friends of friends. They found my guest room on Airbnb.com, the largest and fastest growing player in one of the largest and fast growing industries – online sharing. If you have a spare room, a spare spot at your dinner table, a spare seat in your car, or spare hours or skills, you can now sign up at Airbnb (rooms), Feastly (meals), Uber (transportation), or TaskRabbit (work), and turn those underused assets into cash.

I’m not familiar with Feastly, TaskRabbit or Uber – except that the latter is involved in a major battle with established taxicabs companies as they try to set up in Las Vegas (they’re already in New York, San Francisco, Washington DC, and approximately 100 other cities across the world), but from what I know about Airbnb (as both an observer and a user) I am impressed. So is the market: Based on an April 2014 round of funding, Airbnb is worth around $10 Billion (the B is not a typo). The company now has more rooms than any single hotel group in the world, including Hilton and Marriott: 800,000 listings in 33,000 cities in 192 countries.

Airbnb processes are well thought-out. All signups are verified (car license information, contact info; hosts have to submit a W9). Setting up a listing takes about an hour, including time for photos. The website is extremely user-friendly for guests to find the right accommodations. Both guests and hosts are “reviewed” so you know pretty much what you are getting. Airbnb guests are prepaid (Airbnb takes care of all of that) and they leave on a set date. Yes there are risks – but I can tell you from recent personal experience that there are also risks from letting a friend of a long-time friend move in “for a while.”

Why am I describing all this? Since signing up as a Airbnb host I have been astounded to find out how many of my gaming brethren are not familiar with the operation – they’ve just heard “something about it.”

How does this affect the casino industry? Remember that most properties are not just casinos: they are hotel casinos – and while some properties do not make money on their rooms (though the number is dropping), their rooms serve as one of the most important feeders to their gaming floor.

Today there are about 1,000 available Airbnb choices in Las Vegas, 500 in Reno, and about 100 in the Mississippi Gulf Coast region, and a total of 160,000 nationwide. Many experts expect these numbers to double within a year (as they have each of the past two years) and quadruple in certain (currently underserved) markets. And while 4,000 short term room/apt/house listings, for example, would not have any sizeable effect on the Strip hotels, there are micro markets that Airbnb could impact:

• Self-employed conventioneers who are paying their own way
• Overnight tourists driving through Las Vegas to/from another destination
• Tourists visiting Las Vegas residents who cannot put them up (a major market for outlier Las Vegas/Henderson hotels).
• Small party groups (four guys on a bachelor weekend) who might decide, for example, that currently offered Strip condos ($149 a night) are a more “fun” choice than being put into two or three hotel rooms at a large Strip property.

With the exception of the party group, none of the above customers would be expected to spend a great deal of money in the casino on these particular trips, but all them represent potentially good customers down the road. An important introduction is lost if they stay in a private home and not a hotel.

Granted, Airbnb poses a much bigger threat to hotels in New York, San Francisco, Chicago and even Orlando – where cost-concerned visitors consider accommodations an expensive-but-necessary evil – than to lodgings in Las Vegas. Sin City rooms have always been well priced, with many of the guests getting substantial discounts if not free rooms.

So what should you do about Airbnb?

First, become familiar with Airbnb.com website, especially as it affects your property. How many listings are in your area, how are they priced and what micro-markets could they affect?

Second, consider if there any opportunities available through Airbnb (or other internet sharing economy sites) – for example, customers being turned away on sold-out weekends.

Third, you might monitor local Airbnb listings to see if there are large providers that are operating in violation of local statures. There are currently legislative efforts in New York and San Francisco to curb Airbnb growth. Many towns already have laws on the books (including zoning regulations) that can be legally used, especially against folks who are running a major business as opposed to an occasional one-room-offer host.