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Gaming Vs. Non-Gaming Revenue

Discussion in 'Casino Industry & Development' started by sco5123, Apr 26, 2014.

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  1. sco5123

    sco5123 VIP Whale

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  2. MisplacedTexan

    MisplacedTexan Low-Roller

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    That chart is pretty telling, huh? I don't have anything to back up this theory, but I wonder how much of the gambling dollars that used to go to Vegas now to Indian and regional casinos and the like.

    Back in my parent's day, Vegas and horse and dog tracks were about the only legal gambling to be had. Fast forward one generation and there are only two states that haven't legalized gambling in one form or another.

    I absolutely cannot envision a "future Vegas" completely devoid of gaming. And honestly, I don't know that I'd want to be a part of it if it did.
     
  3. teacher1

    teacher1 Low-Roller

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    Interesting, thanks for posting.
     
  4. paperposter

    paperposter VIP Whale

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    yes great graph chart and photo isnt bad either:nworthy:
     
  5. Kickin

    Kickin Flea

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    I posted that chart on this board months ago, and even then it was old. VegasChatter needs to step up their game.

    As usual, I have some comments on it. I hate drawing conclusions from graphs without examining the overall context but I will post my thoughts when I'm not typing on a phone.
     
  6. WHIVGOYTUBE

    WHIVGOYTUBE MIA

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    The Vegas of the future will not be gambling based at all, and I expect it to be more like an arcade. Jump ahead enough years, and there will be no, as in zero human dealers. All computer based table games, slots, and VP, and something new electronically. This will suit the young gamer mentality of non social, but social through technology interaction.

    Drink comps will be based on players club cards inserted and the points needed to be awarded a comp drink. There will be a countdown meter on the screen for the next comp drink, or whatever points are needed for X comp.

    Actual gaming casino space will be 1/2 of what it is today, and expect technology media rooms to be part of every casino floor (non gaming). Floor space has already been gutted (games removed), to make it appear busier than it really is.

    How many years till gaming = 25% of revenue or less? I say, by early 2020's. That is 8 years from today. There will be no need to visit the Vegas Strip, if gambling was your thing to do, unless you go off strip.

    Downtown and off site properties will still be what is considered, old Vegas style attractions and entertainment. But airfare keeps going up as fossil fuels get depleted, and that will keep the gamblers that are not within driving distance to Vegas, away.

    When airfare becomes ridiculous (and it's getting there), people will only go to Vegas to party, concerts, big events like March Madness (sports books), and clubs, as the draw. Not the Casinos or the Resorts themselves. :peace:
     
  7. BayouBengal

    BayouBengal VIP Whale

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    i can see it now, "Congratulations, BLACKJACK! Share on Facebook?"
     
  8. Someone

    Someone High-Roller

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    the article is really meaningless without any type of a profit/loss comparison or any type of profits from OTG (other than gambling) VS profits from gaming itself

    some (even some major casino operators) fail to understand there is a big difference between revenues and profits and a big difference between earnings per dollar invested and just gross revenues

    cosmo and revel point clearly to the fact that building something big, new and fancy and geared towards OTG and the club kiddies surely does not make your profitable and revel has gone broke twice and will probably go broke at least a third time as well and cosmo has really gone broke already 1 time during construction and has never shown a profit or even sniffed one since opening

    and yes plenty of "gambling oriented" casinos have gone broke as well and some even before opening, but the reality is that just shows that gambling and the associated "entertainment" industry is beyond mature and well over crowded and so far appealing to OTG has not proven to be a means to overcome that fact
     
  9. paperposter

    paperposter VIP Whale

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    imaginje if cosmo got it right with gaming, they only lost 100 million dollars with no real gamming in effect basicaly it came from hotel, niteclubs, resturants and concerts, so if they get that down the will be profitable not bad for a bunch of screw ups.

    crowell (cet)belives that the hotel revernue and niteclub with surpass the casino dollars they would have made if the made a big casino
     
  10. Kickin

    Kickin Flea

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    That is one big issue with just looking at top line revenue, another issue is to look at it and think that gambling is somehow diminishing. It has grown over that time period, other non-gaming revenue has just grown faster.

    This chart starts in 1990 and since then gambling revenues on the strip have TRIPLED. From $2.17bn to 6.5bn. I can't find total visitor volume just for the strip, but for Vegas as a whole, visitor volume is a little less than double since 1990 and overall Vegas gaming revenue is up by more than double.

    There is inflation of course, and in real dollars gaming revenue is down in Vegas as a whole, but not on the strip. The bigger problem for the strip is not that gaming is diminishing, its just not growing fast enough.

    Some strip critics contend that downtown is all about gaming, but over that same period downtown is where gaming revenue actually declined significantly, both on a real and nominal basis. So you could argue that its the non-gaming attractions that help keep strip gaming revenues up and keeping them from avoiding downtown's fate on the gambling side.

    Another thing worth noting is that gaming revenues are reported net of promotional allowances (i.e. comps), otherwise they'd be double counting revenue. It represents over 20% of gaming revenue from the major strip hotels so you can add that back in and deduct it from non-gaming to get a truer picture of the breakdown. If this was the case for all the years shown it wouldn't matter, but I am pretty sure the accounting has changed over the years as these properties split each division more and more to operate as their own profit centers. I think (I haven't confirmed) that comps used to be treated purely on a COGS basis instead of as a transfer of revenue at retail prices from the casino to other departments.
     
  11. UTE

    UTE Plastics

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    The Chicken nailed it. Good, succinct analysis.

    Bill
     
  12. Joe

    Joe VIP Whale

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    My crystal ball is a bit fuzzy, but I can certainly see this happening as far as drinks go.
     
    Christmas
  13. keno60

    keno60 VIP Whale

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    Did anybody see the program on the Mega Resort Gambling, a expert wrote a book with the thesis that people wanted to gamble in more social places (smaller areas] and the large resorts were not conducive to gambling. Sorry, I don't remember names or even the channel. It usually ran we the Vegas week shows that are all out of date. Sucker bets, How Whales are treated, Cheaters Beware etc.:confused2:
     
  14. Viva Las Vegas

    Viva Las Vegas Ramblin' Gamblin' Man

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    I haven't produced a FY 2013 review of Nevada gaming (will post in a separate thread), but here are a few points related to revenue / revenue sources.

    1. Kickin Chicken is square on regarding revenue vs. profit. Casino Executives who haven't put in a penny into their business give a song and dance and pimp out EBITDA (as if interest, taxes, depreciation and amortization are not real expenses) and spin figures to secure the biggest bonus / claim on awarded shares. Operators like Wynn & Sheldon have their skin in the game, and they focus more on profit / the bottom line. CET/MGM do not have an incentive to borrow tens of billions to increase revenue while at the same time decreasing margins / losing cash.

    2. While club / bar revenue has increased significantly in the 2000s, keep in mind many casinos merely rent or lease this space, and they only capture a portion of club profits.

    3. The chart in the link lumps room revenue in the "non gaming revenue". A fair assessment separate room revenue to determine the portion earned via gambling vs. shop/dine/drink/club/shows. You could lump in airfare into "non-gaming" and have an even more distorted picture. Taking room revenue out gives a cleaner assessment as to what people are spending their money after they fly/drive in and check into their room.
     
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