nevada casino industry losing money

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notes1
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nevada casino industry losing money

Post by notes1 »



according to a CNN/MONEY article posted online, nevada casinos lost $682m last year. people are still coming, in 2016, they expect 42m visitors. they just are not gambling as much, instead spending their limited dollars on less profitable ventures such as entertainment, drinking and food. these mega properties with gigantic overhead costs, were built on the idea of folks losing money while gambling, especially on the machines. there is little cost involved. now, more of their business is coming from services that require more employee costs, much less profitable. this was inevitable. you can fool some of the folks some of the time, but you can't fool all of the folks all of the time. people have just gotten tired of feeding the machines, with their lower payouts. the entertainment value does equal the cost. so, for all of us who have argued that the cost of gambling has increased beyond expectations and have adjusted their play, the casinos are paying the price. maybe, they will now adjust their business model. it will be interesting to see what happens to the industry from here. 

DaBurglar
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Post by DaBurglar »


I did not see the CNN story but this is interesting....I would point out that when you say "Nevada Casinos lost nearly 700 million last year", you do realize that this TOTAL LOSS is not spread EQUALLY amongst all the dozens and dozens and dozens of casinos that exist in Nevada, right?   There are still individual winners and losers...... Obviously, MOST of the casinos in Nevada INDIVIDUALLY still turned a profit, although I would theorize (again because I did not see the story CNN put out) that profits are shrinking across the board, but PROFIT is profit.You are right the business model has indeed changed, and I have seen figures as low as 30% reflecting what the HUGE Vegas casinos expect to take in via gambling as a percentage of their total revenue, the rest from all other sources and amenities (but that is also the reason why they CHARGE NOW FOR ANYTHING AND EVERYTHING, and it is why they make a big deal about comping things like PARKING & WIFI, etc.....back in the day, we'd all be shrugging our shoulders saying "yeah, so?")All this report really means is the industry is saturated and therefore COMPETITION amongst casinos is no longer about GOBBLING UP as much money as possible as fast as possible so that EVERYONE makes a profit, but rather its now about WHO in the casino industry will PROFIT and who WILL LOSE as they fight over the same size pie every year (or, SHRINKING PIE if income inequality keeps getting worse and worse, since it is a well known fact that having such income concentration in the hands of fewer and fewer people is BAD for  "INDUSTRIES"  like gambling, simply because the filthy rich DO NOT gamble (with a handful of exceptions obviously....for every Kerry Packer in Australia, there are 100 Billionaires who are notorious cheapskates and who would never waste money on such frivolous and stupid activity as gambling in a casino!)



FAA
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Post by FAA »


Vman96
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Post by Vman96 »

Keep in mind, however, Nevada revenues are IMPROVING year over year. This article sorta glosses over that. The "great recession" really screwed the entire gaming industry over for quite awhile. Most people are not gambling money they can't afford to lose.

alpax
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Post by alpax »

I did not see the CNN article either, but very good points notes. I feel exactly the same. Except I was a fool longer than most people thinking I'd get some of the losing back, but I never won.

ko king
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Post by ko king »



according to a CNN/MONEY article posted online, nevada casinos lost $682m last year. people are still coming, in 2016, they expect 42m visitors. they just are not gambling as much, instead spending their limited dollars on less profitable ventures such as entertainment, drinking and food. these mega properties with gigantic overhead costs, were built on the idea of folks losing money while gambling, especially on the machines. there is little cost involved. now, more of their business is coming from services that require more employee costs, much less profitable. this was inevitable. you can fool some of the folks some of the time, but you can't fool all of the folks all of the time. people have just gotten tired of feeding the machines, with their lower payouts. the entertainment value does equal the cost. so, for all of us who have argued that the cost of gambling has increased beyond expectations and have adjusted their play, the casinos are paying the price. maybe, they will now adjust their business model. it will be interesting to see what happens to the industry from here. 

I don't play in Nevada so my comment isn't directed toward them. What kills me about the casinos in this area is the pay tables haven't changed a bit but somehow it cost more to play. The casinos here are getting what they deserve, the games are pathetic and anemic.

FAA
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Post by FAA »

In AC, the games are fairly responsive. But you often still lose too much to mention on the way to your nice hand.

DaBurglar
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Post by DaBurglar »

Good thread so far......If anyone opens the link for the Vegas article, they will also see two other stories linked within the Vegas article:  One is about MACAU and how the Chinese government is now totally stifling and controlling things, much to the chagrin of the HUGE companies (like WYNN) who have thrown big bucks and lots of resources into Macau and are worried they might now be in for a long, cold stretch with those MACAU investments.The other article is about sad and still sinking Atlantic City;  it states that "AC may lose even MORE of its remaining casinos in the coming year!"   AC had 12 casinos, then in rapid fire sequence, The AC CLUB closed, then Showboat (which was still making a profit), then Revel, and finally Trump Plaza (which is located in arguably the single BEST PHYSICAL spot / locale in the entire Atlantic City Market!)       In 2016 three casinos, The TAj MAhal, Caesars and Ballys  are ALL teetring on the brink of oblivion due to Bankruptcy filings and (in the Taj Mahal case) managerial / administrative intransigence and incompetence!       I can confidently state that, at this point, if the Taj Mahal were to simply shutter its doors in the coming months, I personally will not be going to AC at all anymore.    That indeed will be the FINAL nail for me......simply because the TAJ is the only remaining casino in AC with which I still have any significant level of card holder/player's status (i.e.  CHAIRMAN).....currently the vast majority of my trips to AC, and those going back the past 18 months to 2 years, now only last 4-5 days (as opposed to 7 days or longer prior to 2014), and I spend at least 3 of the days comp'd at the taj.     It is my "home base".....but if (or WHEN) it goes, that is it.   I have no intention, or interest, in moving to one of the remaining places, even Borgata.I have never witnessed or more sad, pathetic and abysmal spectacle than what I have seen befall AC since the very beginning of 2009.....such a rapid, unchecked DESCENT of what once was a healthy, robust location in a the GAMBLING industry, with a natural built in advantage (the OCEAN & Boardwalk), made me furious at the dimwitted, lazy, indolent Casino executives, and the New Jersey & AC civic leaders and decision makers.       PATHETIC.......


FAA
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Post by FAA »

DB, I would guess that another closing within two years is at least 51% likely. From what I hear, securing free room offers at Taj is fairly easy. I'm still too much of a low roller to qualify, but it is tempting. I am still dazzled by the upbeat environment, classy surroundings and winning track record at Borgata. Yet I only make the trek on 50% of my trips. I should make that 90%!


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