Despite the TV shows, headlining entertainment acts, and high rollers skittering about the Vegas Strip, Las Vegas casinos have seen a decline in revenue. Sure, they are still bringing in billions in cash each year, but their costs are also going up. So what has led to this steady decline in profits for the Las Vegas mega-resort casinos?
Here are 5 reasons why this is happening:
#5 – Competition from Other Casinos
With changes to state regulations on gambling, more states are allowing casinos to plant roots in small towns. States historically opposed to gambling have suddenly sought sweet solutions to their financial shortcomings by legalizing casinos. Gambling venues like casinos and pari-mutuel race tracks provide jobs, and give the states their kickbacks in the form of taxes and gaming license fees. There are more than 500 casinos in operation in the U.S. today, and a majority of them offer Las Vegas style gaming.
In addition to states legalizing gambling, tribal gaming is also on the rise. As Indian reservations are not technically state land, but federally-granted territories with certain autonomy, Indian casinos have sprung up in large numbers in recent decades. In fact, the largest casino in the world by gaming floor space (600,000 square feet) is owned by the Chickasaw Nation: the WinStar World Casino in Oklahoma.
Because people can spend less by staying closer to home, they are playing their games of chance at hometown casinos or tribal casinos, and forgetting all about the flashy Vegas powerhouses.
#4 – Online Casinos
Not only do Las Vegas casinos have to compete with all of the brick-and-mortar casinos springing up like wildflowers all over the country, they also have to compete with technology. Right now you are reading this article on an online casino website. Slots of Vegas, while being a premier online casino, is just one of many online gambling websites popping up all over the internet.
Online casinos are the single largest competitor for the Vegas megaresorts. Traveling to Vegas requires a huge expenditure of money in travel, accommodation, food and drink, and entertainment. These days, all you have to do is open a browser, fill in a quick online form, and you’re ready to play almost any casino game online for real money. You can even practice for free to try out the games before you commit any cash. Vegas casinos will not let you do that.
#3 – The Jackhole Parade
Unless you arrive by plane and are driven straight from the airport to your luxury megaresort casino by a limousine with blacked out windows, you’ll never see The Real Vegas. The streets of Vegas are filled with drunks, freaks, and drunken freaks, 24 hours per day. Unlike most other U.S. states with a liquor curfew of 2 a.m., you can drink 24 hours per day, right there in the streets. And they do. Nonstop.
In the Golden Era of the Rat Pack, Elvis, and the all-night party experience, people would sit outside of overfilled casino lounges and have a cocktail in the parking lot. Swinging tunes would issue forth from car radios, and the vibe was very cool, daddy-o. Drinking was done in a civilized yet fun way.
But then someone spread the cliché that Whatever Happens in Vegas, Stays in Vegas. And the clarion call rang far and wide, drawing every drunk in the world to the streets of Vegas. And what stays in Vegas is a massive mess. Armed with the knowledge that they can do almost anything in Vegas (only the Rat Pack, Elvis, and Hunter S. Thompson truly could), every fool with the ability to buy alcohol drinks it all day, and leaves all the messy after effects on the streets.
When faced with a street scene akin to a Tijuana Fandango (donkey shows) or British Stag Tours in Eastern Europe (island monkey shows), many people would rather not deal with the mayhem of the Las Vegas Strip.
#2 – Las Vegas is Expensive
Gone are the days when casinos liberally threw casino bonuses, free room comps, booze, and food at people to rope them in. Families used to drive to Vegas (when gas was cheap) just for the all-you-can-eat buffets. In those days, you could get a heck of a deal on food and feed your whole family for $20. Now it is more like $20 per person—more if you go to a fancy-shmancy casino buffet.
Comps aren’t for everyone these days. People used to go to Vegas with a hundred bucks to spend in the casino, and they would get free rooms for their trouble. Not anymore. You need a special VIP bonus card, high roller status, and a very steady career as a loyal gambler. Otherwise, you’re just a bumpkin in for the buffets.
Back when casinos only cost a few million to build, owners were more generous. They could offer free shows or food or discount steaks to woo the crowds. Nowadays, in the megaresort era where 3 or 4 guys run multi-billion-dollar casinos in multiple cities, there is no room in the margins for generosity. They need to please their board members, not their customers.
So, if you’ve got $10,000 or more burning a hole in your pocket, you could have a blast in Las Vegas, complete with free rooms, booze, and schmooze—without getting any street liquids on your shoes. If not, you may as well gamble online in the safety of cyberspace.
#1 – Millennials Aren’t Into Casinos
Let’s face it. The days of casinos filled to the brim with rows of retired people pumping coins into slot machines all day is over. The new generation craves a different type of thrill. Sitting in front of slot machines emptying their wallets into them is not one of them. Millennials are tech savvy, so they could easily gamble online for real money without ever leaving their home. Or when they’re on the move, they can easily play casino games through their phones.
Today’s young adults also expect unique, high-quality experiences, delivered in sustainable ways. As a result of the decline in casino revenues, casino moguls have devised strategies to lure the younger generation. Today’s visitors to the Las Vegas Strip can expect a wide variety of attractions to pique their curiosity. Top casinos now strive to provide top-level experience which can’t be had anywhere else, like a high-speed zip line ride between casino towers (high above the street mayhem), or a chart-topping singer in residence.
As global trends show a shift away from the ancient gambling grounds to new casinos on tribal lands and in cyberspace, Las Vegas constantly needs to up the ante if it wants to continue its winning streak.