Las Vegas Gaming Revenues on the Rise

Lynn Martelli
Lynn Martelli February 7, 2023
Updated 2023/02/07 at 1:46 PM
Las Vegas Gaming Revenues on the Rise

In 2006, Macau, the Chinese administrative region, for the first time ever, beat the iconic Las Vegas Strip concerning annual gaming revenues. The former Portuguese colony earned the crown of the world’s gaming capital by its numbers surging past those of Sin City by a margin of more than $300 million in 2006. From that moment onwards, Las Vegas has remained the planet’s second most lucrative gaming destination regarding overall gambling profits.

However, despite what many analysts predicted, the global COVID-19 pandemic did not have the expected long-term impact on Nevada’s gaming sector that many thought it would. In fact, it is doing surprisingly well. So good it may be on track to regaining its honor as Earth’s top game of chance betting hub for good.

While most believed that it would take until 2023 for the US and the Battle Born State’s casino industries to recover from the establishments’ shutdowns, weakned tourism, and health restrictions seen in 2020 and 2021, they landed on their feet quicker than expected. Particularly Vegas’ one, which is super interesting since many online polls showed that after COVID, 96% of online gambling players prefer downloadable casinos like Silver Oak over land-based ones. Nevertheless, monthly gaming revenues in Nevada have gone over the one-billion-dollar mark from February 2021 onwards, with the state setting an annual gaming revenue record in 2021 and surpassing it in 2022. Thus, to say that Vegas has been on a roll lately would be an understatement.  

Why Is Demand For Vegas Gaming Growing?

The main question that most people in America have concerning the rising rate of gaming revenues is if this reflects experienced inflation and an incoming economic crisis. Per University of Nevada Las Vegas historian David Schwartz, the trend may be a reflection of uncertain times, as in dire straits, most individuals’’ wagering appetites get boosted. That much is clearly evident by the Powerball jackpot recently exceeding $2 billion, drawing never-before-seen ticket sales. Commercial casinos, those outside of Nevada, also seem to be doing quite well, winning over $15 billion for July, August, and September 2022.

Statistics show that casinos in America in the third quarter of 2022 experienced an 8.8% year-on-year growth. They did so well that they drastically outperformed the general US economy, which notched a 2.6% rise in the same period. While sports betting is dramatically expanding in North America, with more than thirty US states allowing this activity, land-based table games and slots continue to be the foundation of the US wagering industry, with quarterly revenue numbers of more than $12 billion.

So, the bounce back of the American gambling sector was even more bullish than the boldest predictions. No one expected that once it recovers that it will exponentially keep growing, as it has. Deutsche Bank gaming analyst Carlo Santarelli projected that the US gaming landscape may get stiffed in the second quarter of 2022 and beyond. But his assessment proved inaccurate, primarily due to the consolidation of domestic travel and elevated spending levels. Santarelli credits the latter as the most vital factor in rising gaming revenues, paired with evolving casino customer spending habits, reflected by slot activity significantly jumping when stacked up to pre-pandemic numbers.

Las Vegas Likely to Consistently Overtake Macau

Traditionally, Macau used to pull in gaming revenues of more than $13 billion, with high-roller baccarat action driving the island’s hospitality sector as its main money-making contributor. Though last year, Macau casinos’ revenues hit a record low as a result of strict Covid-19 policies keeping visitors from mainland China away from this world-famous gaming hub. Per a statement from Macau’s Gaming Inspection and Coordination Bureau, the sector’s revenues saw a 56% fall year-on-year. The Las Vegas Sands, which has a developed operation in the region, saw a net loss of $290 million for the first three months of 2022 because of Covid restrictions weighing on their Macau business.

Now, to help boost COVID recovery, Macau has passed a new gaming bill that increases government oversight of casino operations, replacing the one in force since 2021. The new law introduces, up to six gaming concessions, tax reductions if operators manage to draw foreign players and more.

How Is US iGaming Doing?

Interactive gaming is somewhat of a limited sphere in the US, as only six states allow operators to run websites that facilitate betting on casino-style games of chance. These are Michigan, New Jersey, West Virginia, Pennsylvania, Connecticut, and Delaware. New Jersey was the first American territory to allow this pastime to its residents in 2013, and Connecticut was the last from this batch to permit it, even though this has been a choice for all US regions since 2011. That was the year when the Department of Justice issued a novel interpretation of the Interstate Wire Act of 1961. Now, before 2013, all US residents could enjoy online blackjack and slots, but at offshore sites based in territories like the Isle of Man, Panama, Costa Rica, and Curacao.

In 2021, Custom Market Insights, a leading market research firm from Pune, India, approximated the global interactive gaming market at $58 billion, on course to hit annual revenues of $146 billion by 2030. In the US, the Garden State is the online gaming king, with revenues that traditionally go over the one hundred-million-dollar monthly benchmark, with brands like Borgata and BetMGM leading the pact. Michigan and Pennsylvania are also posting comparable monthly figures to New Jersey, with Delaware, Connecticut, and West Virginia ranking as the least developed markets. Yet, they also have displayed significant growth, with Delaware casinos posting a 39% yearly increase in generated online casino money in September 2022, compared to the same month in 2021.

It is paramount to note that internet wagering in Nevada is perfectly legal, and retail sports betting has been here for years before the fall of PASPA (the Professional and Amateur Sports Protection Act). Nonetheless, surprisingly, the Nevada Gaming Control Board does not regulate online casino gaming, making offshore platforms the only option for Nevadans. The reason for this is heavy lobbying against allowing this practice out of fear that it may disrupt the brick-and-mortar section of the industry, as Nevada is so economically-reliant on it for taxes.

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