Are Casinos Killing The Golden Goose With High Fees And Fewer Perks?
Visitation to Las Vegas has fallen over the last two years. There’s speculation about many reasons: casino expansion and sports betting around the country, to say nothing of parking charges and increasing resort fees.
Are casinos killing the golden goose?
“I think a lot of it is attributed to a reduction in room inventory because there has been a lot of renovations, a lot of upgrades at the various properties," said Chris Sieroty, U.S. editor for Gambling Compliance.
He also believes the October 1 shooting had an impact.
Sieroty agrees that spending $45 a day on resort fees seems strange but he thinks it is part of people's budgets for their trip to Las Vegas.
“They do have an impact on people’s spending, but I think there are other factors in terms of the decrease in visitation I don’t think it has to do with fees,” he said.
However, Sieroty does think there is a ceiling on how much people are willing to pay and if casinos continue to look for ways to get as much money as possible from each guest they will reach that ceiling.
GAMING REVENUE DECREASE
“Worried? I think they’re always worried," Sieroty said of gaming companies and their potential concern about slumping gaming revenue numbers.
However, he believes the softening numbers are seasonal. Plus, there are some positive signs.
“There’s more rooms coming on. There’s more conventions coming back. I think it will be okay,” he said.
In addition, local casinos and downtown casinos reported good gaming revenue numbers.
“I think it means a stronger local consumer who wants to go down, spend money on the Strip, or at a locals casino or downtown on Fremont or a Station Casino. They feel comfortable. The economy is good. They’re making money. It has to do with the health of the Las Vegas economy,” he said.
IMPACT OF EXPANDED SPORTS BETTING ON LAS VEGAS
“I think right now, I don’t see it impacting Las Vegas as whole because… the people I know want to come to Las Vegas and they don’t want to go to Atlantic City for these big sports betting events,” he said.
Sieroty said Las Vegas still leads the way in non-gaming amenities compared with other gaming centers around the country like New Jersey, Missouri and Mississippi.
Plus, people like to come to Las Vegas for the experience that they can only get here.
NEW BOUTIQUE HOTEL
“Two words: Raiders Stadium,” he said.
The new hotel is planned for the south end of the Strip near the Raiders Stadium, which is under construction.
However, it is relatively small with just 625 rooms and a price tag of $300 million.
“If they can get people who come in for the Raider games to stay there, they’ll have a chance,” Sieroty said.
But there aren't that many home games and if people choose to stay at a big name property the new boutique hotel might be in trouble.
“I think any one-off property has a problem in Las Vegas on the Strip competing with Caesars and MGM, which basically dominate the Strip with about 19 hotels now,” he said.
Sieroty also had a word of caution. He said the hotel isn't expected to break ground until spring of next year and isn't slated to be finished until 2022. That is a lot of time for a project to fall apart.
MASSACHUSETTS GAMING COMMISSION AND WYNN RESORTS
“I think they’re going to be fined and they’ll keep their license and everything will move forward,” Sieroty said.
The commission is investigating the company's response to allegations of sexual harassment and misconduct by former CEO and founder Steve Wynn.
Sieroty expects the Massachusetts gaming regulators will hand out about the same fine as Nevada regulators did - $20 million.
He thinks it is unlikely that the gaming commission there will take away the license because of the size of the Encore Boston Harbor project, which is set to open in June.
“It’s too big of a project in Massachusetts to stop now,” he said.
Plus, Sieroty says revoking the company's licenses would be "a pretty severe punishment," and would have an impact on licenses in Macau.
Chris Sieroty, US editor, Gaming Compliance.