How quickly fortunes can turn in the world’s most famous gambling hubs. It was only 18 months ago, as the clock ticked into 2014, that Macau was trumpeting the fact its casinos were now raking in a whopping seven times more than Las Vegas on the back of another record year in 2013 which saw gaming revenue reach US$45.2 billion.
Not so anymore, with the lights of the Las Vegas Strip starting to shine brightly again just as Macau finds itself heading in the other direction. From its high of 2013, Macau is expected to see its annual gaming revenue fall to somewhere between US$31 billion and US$35 billion this year according to analysts – back to around five times the size of its American cousin.
And while this closing gap is predominantly a result of Macau’s decline rather than a Vegas boom, things are undoubtedly looking up in Sin City.
The WGM team recently spent a few weeks in Las Vegas for the World Series of Poker and couldn’t help but notice some promising signs that a resurgence is well underway – not the least of which being the sheer number of people on hand to enjoy the Vegas summer. Just as the 2008 US recession hit the gaming industry hard, the country’s recent recovery seems to have brought the tourists back in droves.
But don’t take our word for it. Official figures from the University of Nevada’s Center for Gaming Research show that from a low of US$5.5 billion in annual gaming revenue at the heart of the recession in 2009, the Las Vegas Strip’s casinos took in US$6.32 billion last year. And although that figure represents a slight drop on the US$6.5 billion they made in 2013, total revenue actually rose a full five percent to US$16.3 billion thanks to the Strip’s seemingly endless array of non-gaming offerings.
Notably, the last time gaming was the dominant revenue stream for Las Vegas casinos was 1998 with non-gaming now accounting for more than 63 percent. The benefits of such non-gaming offerings were also there for all to see during the recent Floyd Mayweather-Manny Pacquiao fight at MGM Grand in May which saw a new single-month record of 3.74 million tourists flock to Vegas and state wide gaming revenue top US$1 billion.
Overall, the first five months of 2015 saw visitor numbers rise by 1.3 percent and gaming revenue by 1.6 percent on the Strip, but perhaps the most intriguing statistic of all came from the baccarat tables where revenue fell – that’s right, fell – by 36.1 percent from May 2014. In other words, gaming revenue in Las Vegas has increased this year despite feeling at least some negative effects from the Chinese Central Government’s anti-corruption crackdown.
Nevertheless, Las Vegas has clearly identified China as a key source of its gaming revenue moving forward and it is no accident that Resorts World Las Vegas – set become the most expensive casino ever built in Las Vegas (costing US$4 billion) when it opens in 2016 – will be Chinese-themed. No doubt their primary target will be the Chinese high rollers currently steering clear of Macau.
Not so long ago written off as a spent force, it seems Las Vegas has some life left in her after all.