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How Are Vegas Strip Casinos Making And Losing Money?

January 14, 2014 at 1:08 PM | by | Comments (3)

When we think about casinos, we imagine thereís no way they can possibly lose money. The casino has a profit margin built into every game they offer. There may be less than a 1% advantage, but thereís still money coming their way. Itís a little surprising when you read the headline ďNevada Casinos Post Fifth Straight Fiscal Year Net LossĒ. However, this †article takes all revenue into account, not just the casino portion of the hotels in the state of Nevada. Seeing stories like this only make us more curious about how the numbers actually work. Luckily, UNLVís Center For Gaming Research publishes a lot of this information.

Since this is VegasChatter and not NevadaChatter, weíll look at Vegas Strip hotel data. Itís time for fun with numbers!

Hotel Revenue Breakdown (By percentage)
Gaming: 36.94%
Rooms: 25.06%
Food: 15.70%
Beverage: 7.60%
Other: 14.71% (shows, spas, etc.)

Hotel revenue has been skewing away from gaming for about 20 years so it's no surprise to see it getting closer to being the same revenue as other sources. In 2007, gaming was good for over 40% of overall casino revenue. With The Linq and all of the other shopping being added to the Vegas Strip, this trend should continue. So, where has the revenue gone since itís not in the casino? Itís mostly going to Food and Beverage. Yup, $3-$4 for a soda, $5 for a slice of pizza and $65 for a steak all add up. This guy is a gambler, so letís look at how gaming revenue breaks down:

Gaming Revenue Breakdown (By Percentage)
Pit (a.k.a. table games): 48.52%
Slots (and video poker): 48.31%
Poker: 1.86%
Sports Book: 0.87%
Horse Book: 0.43%

Table games are generating almost the same amount of money as they were in 2007 thanks to a larger house advantage for the casinos in games like blackjack (less 3:2, more 6:5) and the growing popularity of games with a large house advantage like 3 Card Poker. Itís no surprise to see all other casino games show decreasing revenue over the years, but horse and sports betting stand out with huge drops. Horse racing brings in less than half the revenue it did in 2007 while sports betting brings in 45% less revenue.

Another really interesting piece of data in the reports is that almost 20% of all hotel rooms on the Vegas Strip are compíd.

These reports are great for Vegas dorks (like me). The data is useful for understanding why casinos operate a certain way. If you like playing with numbers, you can read the complete reports yourself:

The Average Big Strip Casino, 2013
Trends For Big Las Vegas Strip Casinos 2007 - 2013†

[PHOTO: mrwallpaper.com]

Comments (3)

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I'd love to see

I'd love to see a report showing how individual games earn. Like how much does Mirage make off the quarter Munster's machine they've had back in the corner for years compared to the new Wizard of Oz machines etc.

@writeguy27

These number are based on what's publicly available through tax statements, etc. That information wouldn't be available from casinos.

Slot manufacturers may release that annually to boast about how great their machine's are but nobody will highlight the slot in the corner. :)

Learn to flip houses

Gaming Revenue Breakdown (By Percentage) Pit (a.k.a. table games): 48.52% Slots (and video poker): 48.31% Poker: 1.86% Sports Book: 0.87% Horse Book: 0.43% GREAT!!!!!!!!!!!!!!!! Very very helpful Information.I have also collected many importance from http://www.houseflippingmastery.com

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