Too Much of a Good Thing? US Casinos Are Maxing Out
Posted on: February 20, 2013, 02:36h.
Last updated on: March 4, 2013, 09:12h.
Once upon a time, if you wanted to gamble in America, you made the trek out to Las Vegas, and a glamorous and exciting trek it was. Then Atlantic City got on board, and tribal casinos opened at various locales around the country. The poker boom hit, and everyone and their mother wanted to open US casinos and ride the tidal wave. A combination of changing mores and the addictive excitement of gambling on tables and machines swept America and suddenly, it seemed like every state wanted to legalize what had once been largely forbidden. Dazzling revenues and thousands of created job opportunities probably didn’t hurt the surge in gaming houses either.
But those days appear to have hit a sinkhole in the road: experts are now saying that the American casino market is overbuilt, and approaching complete saturation.
Too Much Competition, Not Enough Differentiation
What’s caused the downward spiral? According to University of Nevada, Reno professor Mark Nichols, it’s become something of a fast-food-that’s-all-the-same environment for American casinos. Nichols says that casinos have lost their ability “to out-entice somebody, because everybody is pretty much the same, and everybody is on the same playing field. [So] then it just comes down to location.” Fitch gaming analyst Alex Bumazhny told Bloomberg earlier this month that the American brick-and-mortar casino market has nearly reached the saturation point: “It’s almost a zero-sum game whenever a new casino opens [now],” Bumazhy said.
Legendary Las Vegas Sands’ chairman Sheldon Adelson observed last year that the gambling industry itself is one of “supply and demand;” apparently there is now too much supply and demand has become complacent and expectant. The dawn of legalized online gambling that is about to burst forth in several key U.S. states cannot be helping, either; when it comes to location, after all, nothing is handier than your own bedroom, in your pajamas.
Where Atlantic City once owned the East Coast for land gaming, the scenery has now changed dramatically. Since its neighbor Pennsylvania opened its first casinos in 2006, New Jersey’s prime gambling mecca has seen its gaming revenues halved; a reality not aided by unfortunate and unforeseen events such as Hurricane Sandy and enormous political infighting between various factions in the Garden State over how to develop and market Atlantic City to potential customers.
New and Shiny Beats Old and Tawdry
Even within gambling states, stiffer and newer competition has not been able to keep gaming profits from falling overall. For example, while table game revenues rose 12% this January for Pennsylvania’s table games overall, it was largely due to the influx of fancier, newer casinos such as Sands Bethlehem and Parx, while the state’s older properties actually lost money compared to the same time in years prior. Likewise, Illinois’ new Des Plaines Rivers Casino saw a 6.8% revenue spike in January, while overall state gaming revenues dropped 3%. Similarly, Maryland’s new Maryland Live! Casino reaped 75% of the state’s overall January gaming intake, while two older casinos dropped 6.5% and a whopping 44% in total.
Where it will all go from here is anybody’s guess, but if you’re considering investing in a gambling venture right now, perhaps a lottery ticket is your best bet.
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