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.

Heavy Regulation

The casino industry is highly regulated at the federal and state level, 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, 28 states offer legalized 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 2022, the tribal gaming industry consisted of 244 tribal nations that operated 519 casinos located in 29 states. Revenue per tribal casino averaged about $79 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 $45.5 billion in revenue, according to the 2022 China Game Industry Report.
                              Industry Forecast
                              Casinos and Casino Hotels Industry Growth
                              Source: Vertical IQ and Inforum

                              Recent Developments

                              Apr 5, 2024 - Revenue Growth Outpaced Rising Payroll Costs in 2023
                              • Employment by casinos and casino hotels grew 5.1% in December compared to a year ago after rising by 7% in the previous annual comparison, according to the US Bureau of Labor Statistics. Average wages at gambling industries were $20.30 per hour in December, a 2.3% year-over-year change and just $0.50 per hour shy of their all-time high in May 2020. Rising producer prices for casino hotels, growth in consumer spending, and Americans’ passion for gambling helped propelled commercial gaming revenue to record-levels last year
                              • US commercial gaming revenue reached an annual record of $66.5 billion in 2023, according to the American Gaming Association (AGA). Last year’s total exceeded 2022’s previous high of $60.5 billion by 10% and marked the industry’s third-straight record revenue year. 2023 ended with all-time-high Q4 revenue of $17.4 billion, capped by $6.2 billion in December alone, the highest grossing month in the industry’s history. “From the traditional casino experience to online options, American adults’ demand for gaming is at an all-time high,” said AGA CEO Bill Miller. Record online gaming and sports betting drove growth, with online gaming accounting for 24.7% of US commercial gaming revenue in 2023, while sportsbook revenue surged 44.5%, according to AGA’s Commercial Gaming Revenue Tracker. Traditional gaming – slots and table games – grossed a record $49.4 billion in 2023, up 3.3% over 2022.
                              • The contest between the Kansas City Chiefs and San Francisco 49ers in Super Bowl LVIII in Las Vegas in February was the most visible sign yet that the NFL has embraced both the city and the growing gambling industry, according to the AP. The NFL’s historically arms-length approach to Las Vegas and sports gambling has been replaced with a far cozier relationship. “The relationship developed very quickly,” Jay Kornegay, VP of race and sports operations at Westgate Las Vegas told the AP adding, “To us, it felt like it was a 180-degree turn. For decades, it was a precarious type of relationship.” The Raiders’ 2020 move from Oakland to Las Vegas and the Supreme Court’s overturning of the Professional and Amateur Sports Protection Act, which opened the door to legalized sports betting beyond Nevada, were key to improving ties between the league and the city, per the AP.
                              • A snapshot of the current and future economic health of the gaming industry found a majority of industry executives upbeat about current business conditions but somewhat less optimistic about the future, according to the American Gaming Association (AGA) Gaming Industry Outlook by Fitch Rating. Expansion of the US gaming sector is expected to continue but at a slower pace than in the pandemic's wake. Many gaming executives said they expect their balance sheets to improve and to continue to invest amid slowing revenue growth. When asked about future business conditions, more than half said they expect the next three to six months to be about the same (58%), with the rest almost evenly split between those who anticipate better or worse conditions. Their toned-down expectations reflect Oxford Economics’ forecast that the US economy will experience a mild recession beginning in the fourth quarter, according to the AGA.
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