Viva Las Vegas for Casino Profits
This Hotel Interactive article offers some great data about the Las Vegas Casino scene in terms of economic impact. As you’d think it’s a staggering cash flow – some 2.1 billion profit on 24 billion in revenues from the 274 properties in Nevada reporting more than a million in profit for the year.
Here are some notable items from this report:
Gaming accounts for 49% percent of total revenue = $11.8 billion.
Rooms = 20% = $5 billion
Food = 14%
Average revenue per casino hotel resort was $88 million (!).
Casinos paid $928 million in state gambling tax and license fees (!).
Slot machines accounted for 67% of gaming revenue.
Poker accounts for only 1.4 percent of gaming revenue.
The Las Vegas Strip: $14.9 billion revenues and profits of $1.25 billion.
Downtown Las Vegas: $1.2 billion in revenue and a profit of $140.6 million.
Hey, here’s my brief Las Vegas History based on the PBS show about Las Vegas.
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>Casinos paid $928 million in state gambling tax and license fees(!).
Exclamation point indeed!! That is the LOWEST taxation rate of casinos anywhere in the nation.
>Slot machines accounted for 67% of gaming revenue.
Sure. Why do think casinos love the retired women? They don’t know how to play anything else, they know they are going to lose, but its ‘fun’. You take their money and you don’t have to pay any salary or medical benefits for the slot machine! And if you dribble a few quarters back to the player every now and then,,, that player will just put them into the machine again and this time you can keep them! What a profitable racket. Ever wonder why the low-level joints that are nothing but slot machines are so profitable?
>Poker accounts for only 1.4 percent of gaming revenue.
Yeah, in the poker rooms you have real gamblers and they take each others money. The casino just takes a ‘rake’ from each hand. Poker Rooms bring people to Vegas, the other games gets the money out of their pockets (or their spouses pockets). And dont forget,,, to get to those poker rooms you have to pass an awful lot of other opportunities to gamble or spend money. One casino makes poker players walk through two floors of the casino to get to the third floor poker room. With that setup, the poker room makes alot of money that never ever reaches the poker room at all!! So the books show a low return on the poker room, but those green eye shade types sure know how profitable those poker rooms really are! Remember, all a casino wants is to get people into the joint who have money and will give them action. A casino doesn’t really care if it has to win a dollar nine times at a game in order to finally get it into the counting room. Casino managers are very patient. All parasites are. Just as the tapeworm wins once it enters its host, the casino wins once the player walks through the doors. The actual battle may take some time, but the result is already known.
For a long time Vegas-types have been complaining of declineing numbers of visitors: empty sidewalks, empty shopping areas. Even the “girls” in the casino bars have been complaining of having to work harder for their money and there being far fewer men to choose from. Only recently did official convention-and-visitor figures confirm the economic slide.
Vegas used to be recession proof but now things are bad.
Some say its the change from ‘a gambling town’ to a “Vegas Experience town” wherein Room, Show, Restaurants and Spa all come higher on the visitor’s budget than the after-thought of $150 for the slots. Now ofcourse its hard to use the gripes of Cocktail Waitresses as an economic indicator or cell-phone photos of sidewalks as an economic predictor, but it has been clear for a couple of months that alot of places are simply getting fewer customers.
Recession proof? Mega Million construction projects persist despite any such recession. Yet its noticeably different. Some Poker Rooms have closed or gone dark at certain slower shifts. Its probably transitory but it does show a deeper recession than the officials claim.
Its not a particularly good time to be a poker dealer. Alot of rooms are cutting back on hours, few are hiring.
However, at Stations the recent Bad Beat Jackpot paid 322.00 to each and every poker player at all of the seven Stations casinos. So even though the poker rooms seem to contribute a slight amount to the casinos, it doesn’t mean the casinos are hurting. The casinos will weather any storm thrown at them. They just have to get back to core values of gambling rather than ‘Vegas Experience’.
… get back to core values of gambling
Those great American core values: Life, liberty, and casino blackjack.
Although I think you are right they’ll weather the storm, I think that higher air fares, local travel, and biz problems may hurt Las Vegas. Although I think I’ve read that people tend to gamble *more* during economic hard times, I think they will travel much less.
Those who would normally travel internationally will tend to limit themselves to domestic travel; those who would normally take more diverse vacations in the USA will travel to a gaming destination, but those are all over nowadays, not just in Las Vegas. Too much of Las Vegas is the “Las Vegas Experience” rather than solely gambling.
However, casinos are already offering free gas prizes and airfare discounts along with their substantially discounted rooms. The Venetian lowered its room price by engaging in a face-saving “Your Room Rate is the Forecast Temperature” gimmick.
One acquaintance recently enjoyed 3 nights at a Downtown hotel for seven dollars. Not seven dollar per night. Seven dollars. Plus he had his fifty in match play! Vegas will probably never be this desperate again.
FG I need to keep up on those specials – thanks for the heads up. I’ll be down there in December for National Table Tennis Championships and then in January for CES. CES fills the city and brings no good deals on the strip but downtown hotels don’t seem to benefit from CES much, which means the normal good rates. $7 for 3 nights plus $50 match play would be a net gain of $18 … That’ll be hard to beat!
The dollar value to him of 50.00 in Match Play is 46.2 percent of 50.00 or $23.10.
The thing to watch carefully are the surcharges for funbooks or gym access or internet access, these can make the rooms more costly than the quoted rates and its best to avoid the casinos that levy such charges. A daily charge for a coupon book is absurd but some places get away with it.
Usually you get thirty seconds to look at a minibar selection but a sensor can charge your room if you take a bottle out of the rack and put it back in 31 seconds or something like that.
It used to be that “locals” in Las Vegas tried to keep an out of state address and drivers license so as to get good deals from the casinos but now in the competition for business some casinos are catering to “locals”. Sahara has its clearly designated “Locals Lane” of higher payout slot machines and deeper discount Players Club for Locals. Somewhat financially troubled and image-troubled Hooters is offering free rooms to some of their local players. It used to be that free meant “full of loopholes and fine print” but now free is more often meaning just that: free. You can’t beat a free room. And you can’t really beat that “cover your first day’s losses up to $100.00″.
15 percent decline in gaming revenues in May.
More than people thought it would be.
Still… it means opportunities for the players as casinos will not ‘buy’ visitors with bribes of cheaper rooms and cheaper meals and more generous comps.
“…“You can’t cut your way to profitability” has become the new mantra of the gaming industry.”
The above snippet is taken from the historian who runs the UNLV gambling study center. I think its surely true that the common practice of wholesale firings in tough times just can’t be done forever. Getting rid of alot of staffers and making the remaining employees sweat ferociously and be pushed to the limit just reaches an irreducible minimum.
Steve Wynn hinted at this in his recent phone chat with stock analysts, but other casinos are faced with the same situation. You just can’t run a Vegas casino without dealers, waiters, housekeepers, etc. And working them to death won’t really help the casino’s bottom line at all.
While numbers are greatly improved in Vegas these days, it seems that the massive Baccarat numbers are deceptive because that is largely Asian money from players being flown in. Such players often get massive comps and the use of Dead Chips. The Drop figures will be high but the comps would be buried in accounting reports somewhere.
The key is that virtually the entire resurgence in Baccarat is confined to The Strip. No boom in Bacc in Downtown or the Boulder Strip or Reno or anywhere else in Nevada! So its all Asian gamblers in the High Limit rooms or the Private Gaming rooms and that’s why the figures were so high over the Chinese New Year. Since high rollers in Maccau are usually extremely well-organized and represented by agents, you know that these Asian high rollers are not flying to Las Vegas on their own dime!