Casinos and Casino Hotels
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 788 casinos in the US operate facilities that offer gambling activities, such as slot machines, table wagering games, and sports betting. Casino hotels provide short-term lodging and casino activities on-premise. Gambling machines and table wagering games account for the majority of industry revenue. Other sources of revenue include room accommodations, meals, beverages, and other services.
Competition from Alternative Forms of Entertainment
Casinos and casino hotels face competition from alternative forms of entertainment and lodging.
Strict Regulation
The casino industry is highly regulated at the federal and state levels due to the cash-intensive nature of the business.
Industry size & Structure
The average casino establishment employs about 270 workers and generates about $78 million annually, while the average casino hotel establishment employs about 480 workers and generates about $153 million annually.
- The casino industry includes about 227 establishments that generate $17.7 billion annually and employ 60,700 workers. The casino hotel industry includes about 420 establishments that generate $64.5 billion annually and employ 230,300 workers.
- Both industries are highly concentrated; the top 50 firms account for 80% of industry revenue.
- In the US, 35 states and Washington, DC offer land-based casino gambling. The largest US casino markets are Las Vegas, NV, Atlantic City, NJ, and the Chicago, IL/IN area.
- Large firms include Caesars Entertainment, Penn National Gaming, Las Vegas Sands, and Wynn Resorts.
- Native American gaming operations are owned by sovereign tribes and located on tribal land. In 2023, the tribal gaming industry consisted of 245 tribal nations that operated 525 casinos located in 29 states. Revenue per tribal casino averaged about $80 million.
- Several large firms have international operations, with a focus on Asian markets. The Chinese territory has become one of the world's biggest gambling markets, with $47.8 billion in revenue, according to the 2023 China Game Industry Report.
Industry Forecast
Casinos and Casino Hotels Industry Growth
Recent Developments
Oct 5, 2024 - Prices and Payrolls Rising
- Producer prices for casino hotels increased 1.5% in July compared to a year ago after rising less than 1% in the previous July-versus-July annual comparison, according to the US Bureau of Labor Statistics data. Meanwhile, employment by casinos and casino hotels grew 3.8% year over year in July, while average wages in gambling industries jumped 12.7% over the same period to a new high of $21.07 per hour, BLS data show. Although employment in the industry has shown steady growth in recent years, it remains well below pre-pandemic levels, while average wages in gambling industries surpassed pre-pandemic levels in March and have remained there. Rebounding tourism and sustained consumer spending, up 2.6% year over year in June, are driving the rise in gambling revenue.
- Gaming executives share a positive view of current business conditions but are more cautious in their outlook for the next three to six months, according to the latest American Gaming Association (AGA) Gaming Industry Outlook released in October. Most respondents to the AGA survey (88%) view the current state of the gaming industry as either good or satisfactory. However, they have a more conservative outlook regarding future business conditions, with respondents split on whether they expect conditions to improve over the next three-to-six months (3% net positive) and many expecting a decrease in customer activity (28% net negative). Following years of gaming revenue growth, revenue expansion has cooled, according to the AGA, clouding the near-term outlook. Per the survey, hotel (56%) and food and beverage facilities (56%) continue to be the main and growing focus of capital investment among operators, followed by live entertainment (28%) and casino floor slots (22%).
- Room rates at some Las Vegas Strip casino hotels are down compared to last year ahead of November’s big Formula One race, the Las Vegas Review-Journal reported in August, citing industry executives. On a recent earnings call, the CEO of MGM Resorts International said ticket sales for this year’s Las Vegas Grand Prix were soft and that some MGM properties were MGM’s properties were charging up to 50% less for hotel rooms compared with last year’s inaugural race. While room rates at the Big Three Strip hotels – Aria, Cosmo, and Bellagio – are down, gaming revenue is holding up. The Las Vegas Grand Prix is in the second year of a three-year deal between the Las Vegas Convention and Visitors Authority and Formula One. The authority is paying Formula One $6.5 million per year to sponsor the race, according to the Review-Journal.
- The US commercial gaming industry set a new record for quarterly revenue in the first quarter, which capped 13 consecutive quarters of growth, according to the American Gaming Association’s (AGA) Commercial Gaming Revenue Tracker. AGA data show that combined revenue from commercially operated land-based casinos, sports betting, and iGaming (online betting) increased by 5.6% year-over-year, reaching $17.67 billion for the quarter. March results were particularly noteworthy, with the industry recording its second-highest revenue month ever at $6.09 billion, a 1.8% increase compared to the previous year. December 2023 remains the highest-grossing month at $6.35 billion. Sports and iGaming are the primary growth drivers, up 22% and 26.1%, respectively, while revenue from table games rose 3% and revenue from slots was flat. Vermont and North Carolina legalized online sports betting in the first quarter, bringing the total number of states where it’s legal to 38.
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