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 483 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.

Heavy Regulation

The casino industry is highly regulated at the federal and state level, due to the cash-intensive nature of the business.

Competition from Alternative Forms of Entertainment

Casinos and casino hotels face competition from alternative forms of entertainment and lodging.

Industry size & Structure

The average casino establishment employs about 259 workers and generates about $83 million annually. The average casino hotel establishment employs 770 workers and generates about $259 million annually.

    • The casino industry includes about 276 establishments that generate $17 billion annually and employ 53,000 workers. The casino hotel industry includes about 456 establishments that generate $72 billion annually and employ almost 214,300 workers.
    • Both industries are highly concentrated; the top 50 firms account for 80% of industry revenue.
    • In the US, 24 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 2019, the tribal gaming industry consisted of 245 tribal nations that operated 522 casinos located in 29 states. Revenue per tribal casino averaged about $66 million.
    • Several large firms have international operations, with a focus in Asian markets. The Chinese territory has become one of the world's biggest gambling markets, with $42.7 billion in revenue, according to the 2020 China Game Industry Report.
                              Industry Forecast
                              Casinos and Casino Hotels Industry Growth
                              Source: Vertical IQ and Inforum

                              Recent Developments

                              Mar 4, 2023 - Record Year for Commercial Gaming
                              • Commercial gaming revenue topped $60 billion in 2022, breaking an annual record for the second consecutive year, the American Gaming Association (AGA) reported in February. According to the AGA’s Commercial Gaming Revenue Tracker, US commercial gaming revenue reached an annual record of $60.4 billion last year – the first $60 billion year for the commercial gaming sector – surpassing the previous record of $53 billion set in 2021. Revenue growth was broad based with slots, table games, legal sports betting, and iGaming all posting increases. In 2022, 84 million American adults (34% of the adult pop.) visited a casino. Table game revenue saw a strong boost in demand, up 13.9% year over year, while slot machines showed steady 5.1% annual growth. Online casino revenue (aka iGaming) increased 35.2%, while revenue from legal sports betting jumped nearly 73% year over year.
                              • Hotels are offering a raft of incentives to lure staff as the industry continues to experience staffing shortages, Hotel Management reported in February. A new survey of hoteliers conducted by the American Hotel & Lodging Association (AHLA) shows that nearly 80% of hotels are experiencing staffing shortages, with 22% saying the shortage is severe. The most critical staffing need is housekeeping, with 43% of respondents ranking it as their top hiring need, according to AHLA. While 71% of respondents say they are increasing wages, 64% offering greater flexibility with hours, and a third report expanding benefits, 81% say they are still unable to fill open positions. The numbers are an improvement from the AHLA September survey, when 87% of respondents said they were short staffed, 36% severely so. Respondents are attempting to fill an average of seven positions per property, down from 10 vacancies per property in September.
                              • While the practice of electronically screening for guns in US casinos is slowly being implemented, casinos still need to be more diligent in detecting weapons, Global Gaming Business (GGB) reported in January. Given high levels of gun ownership and relaxation of gun laws by many US states, mitigation strategies are being introduced to reduce the risk of a shooting incident like the 2017 massacre at the MGM Grand in Las Vegas. Gaming properties have started to take steps – including installing metal detectors – to perform weapons screenings, although larger markets such as Las Vegas still do not have ingress controls for patrons, according to GGB. Makers of weapons screening systems are developing technology that will detect certain weapons without the need for an obvious walk-through magnetometer like those found at airports and the large number of security personnel to manage the screening process.
                              • Rapper and entrepreneur Jay-Z and his agency Roc Nation will join SL Green Realty and Caesars Entertainment in their bid to open a casino in New York’s Times Square, 6sqft reported in December. New York State legalized casinos in 2013 but agreed not to establish any downstate until 2023. Last April, the state approved three casino licenses for the New York City region. A request for applications was slated to be issued by January 6 and licenses won’t be announced until later this year, reports 6sqft. SL Green and Caesars in October announced a partnership to redevelop a 54-storey office tower at 1515 Broadway as “a premiere entertainment and gaming destination” and are pursuing a gaming license. Jay-Z and Roc Nation would oversee entertainment at the casino, to be called Caesars Palace Times Square.
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