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Gaming In 2020: It's All About Sports Betting, New Resorts And Coronavirus

Nevada casinos reaped more than $1 billion in winnings in December, pushing the total for 2019 past $12 billion in a key index of state fiscal health.
 
The Nevada Gaming Control Board said Thursday the statewide "casino win" figure was up almost 5.8% compared with the same month in 2018.
 
Howard Stutz the executive editor for CDC Gaming Reports  told KNPR's State of Nevada that this is the first time the win figure had topped $12 billion since 2007, right before the Great Recession.
 
He said in the years that followed the economic downturn gaming revenues fell 20 percent and it has been a long climb back to pre-recession numbers.
 
Stutz said another important part of the number is where the money was coming from.
 
"What's interesting about this figure is it was kind of done with the Strip basically being flat year over year," he said, "The Strip was about $6.58 billion almost the same as it was a year ago. That didn't really do it. It was just the numbers that came in from other markets."
 
One of those other markets was downtown Las Vegas. The area saw an almost 6 percent jump in revenue from 2018 to 2019.
 
"Downtown seems to be on a rise," Stutz said, "It's the single largest total since 1993. Downtown really seems to be kicking in and I'm sure Derek Stevens is smiling right now just in time with Circa opening at the end of the year."
 
 
He said downtown has great operators, like Derek Stevens who runs the D Las Vegas and the Golden Gate. He also noted that the owners of the Plaza are doing a great job.
 
In addition, visitors are starting to see downtown as a bargain compared with the high prices of the Strip.
 
"I think downtown is really where it's happening," he said, "When Circa opens next year, it's going to push it over the edge. It's a bargain downtown. The Strip is so expensive people are starting to realize that, 'I can go downtown and get what I can get on the Strip for two-thirds of the price if not less.'"
 
One of the reasons for the price difference is the fees that megaresorts now charge. Gros noted that there are parking fees, resort fees and restaurant fees that start to add up.
 
However, he said it is unlikely that Strip resorts will back off the fees.
 
"They really can't cut them back now because they've kind of worked them into their balance sheet, and to cut them back, it's going to be difficult for them to make the profits that they've been making up until now," he said.
 
Stutz agreed. He said the fees are hurting the Strip's bottom line.
 
"Until they figure out a way to have a happy medium somewhere with this, it's going to be a challenge on the Strip," he said.
 
A global health concern could also end up hurting some of the gaming giants. The coronavirus in China has had a dramatic effect on the gaming enclave of Macau.
 
The area has been cut off from the mainland in hopes of containing the virus. 
 
"Wynn and Las Vegas Sands a lot of their revenue comes out of Macau so they've been hit pretty hard by this thing," Gros said, "People I've talked to tell me it's a ghost town."
 
The city where the outbreak started is not a key part of Macau's gaming revenue but the efforts to stop the disease from spreading are having an impact.
 
Stutz said he has not heard of the virus having an impact on tourism in Las Vegas. However, flights out of China are being canceled. He said the biggest concern for gaming companies will be Macau.
 
"This hit at just the worst time. There is no good time," he said, "In terms of business, this really hit at the worst time because they were looking at Chinese New Year, which is always a lucrative holiday, of kind of reviving Macau, which suffered its worst gaming revenue year in 2019 since 2016."
 
Despite the impact on gaming, Stutz believes when the virus is contained and panic over its spread subsides, people will flock to Macau.
 
A boost for casinos and sports books in the United States will come this weekend with the Super Bowl. It is the biggest single betting day for sports books.
 
Sports betting has expanded around the country as states were allowed to decide if they would legalize it. There was some concern that Nevada would see a drop in betting revenue when other states allowed sports books to open.
 
Stutz said the numbers show that hasn't been the case.
 
"It shows that Nevada is still the place. It's still the sports betting capital of the world. We're going to see it this weekend with the Super Bowl," he said.
 
Gros agreed that Nevada's status as the place to bet on sports hasn't changed but he said the state is at risk of losing that top spot if it doesn't start allowing total mobile sports betting like other states.
 
In Nevada, bettors must still go into a brick and mortar casino to set up their profile on a betting app. Also, they can't move money around without going into a casino.
 
"I know that brick and mortar casinos want that to remain the same way," he said, "But that's not the case in most of the other states. In New Jersey, you can do it from your living room couch. I think you really need to get into the technology that all the other states are using or Nevada will fall behind."
 
He also believes state lawmakers need to address the legalities that have kept daily fantasy football betting like Fan Duel and Draft Kings out of the state.
 
It was not that long ago that professional sports teams, especially the NFL, shunned Las Vegas, but that has changed. With the changes in sports betting and the arrival of the Vegas Golden Knights, pro sports leagues are making partnerships with casinos.
 
It was announced this month that Las Vegas would host the NFL draft with spectacle expected to top every other NFL event.
 
Stutz believes the change is good for everyone.
 
"The lines are blurring," he said, "And it's good for the city and good for the NFL."
 
NFL engagement is up and it's believed that sports betting is behind the increase. People are watching games to see how their bets turnout.
 
While the Super Bowl in Las Vegas is likely just over the horizon, a new way of betting is already making its way into Las Vegas casinos.
 
Cashless gaming is being tested right now at the D Las Vegas and the Strat. The Gaming Control Board will be monitoring how it works.
 
The idea is a way to attract more millennials, who are less likely to carry cash. But regulators have concerns.
 
"The regulators don't want to see that happen and I really don't see that changing anytime soon," Gros said, "Debit cards are just a step above that but there is still a danger there." 
 
Stutz thinks the move will be toward mobile wallets, which allow people to put money in and use while staying and gambling at a resort without getting out cash or using their credit card. 
 
(Editor's note: The Associated Press contributed to this report)

Support comes from

Guests

Roger Gros, publisher, Global Gaming Business magazine; Howard Stutz, executive editor, CDC Gaming Report 

 

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