Casino revenue: gains of large gambling investors

‘Casino always wins’ is a well-known saying. But in practice, gambling institutions have different incomes and some of them end up with losses. In this article, we will tell you what business income is received by large casinos and their shareholders.

Las Vegas Sands — champion among the casinos

Top position as for profits among gambling institutions is held by the global company Las Vegas Sands. In 2013, it became an absolute champion for the first time: total profit for the year increased by 25.6% to a record $4.76 billion, and net profit was $2.4 billion. The company owns hotels and gambling houses in the USA (Las Vegas, Pennsylvania), Singapore, China (Macau).

Currently, the company has already reported on its revenues for the Q1 2018. According to the report, consolidated net income increased by 16.7% and reached $3.58 billion. Today, the company's revenues result from not only gambling, but also a spa business, as well as real estate.

According to the return on capital program, Las Vegas Sands pays dividends to shareholders since 2012. By March 1, 2018 they received more than $19.7 billion as dividends and share repurchases.

Gambling revenues are growing in the US

In addition to Las Vegas Sands, there are many other successful operators in the US. So, according to the local tax authorities reports for 2017, in Nevada, casino revenues reached $980 million, which is 3.25% more compared to 2016.

It is in Nevada, where the famous Las Vegas is located, the popularity of which among players continues to grow. The casinos located in the center of Las Vegas reported a net profit of $110.3 million in 2017, which is 111.3% more than in the 2016 financial year. The report says that the biggest revenue was provided to the casinos owners by slot machines.

Asia: up to 300% annual growth

In Asian countries, casino revenues are growing at an even more impressive pace. For instance, the profit of the Wynn operator (USA) in Macao grew by 300% for the Q1 2018, amounting to $187.04 million.

Macau remains the largest gambling hub in Asia: income from gambling establishments and nightclubs accounts for up to 70% of the local budget. 2017 was a successful year for the local operators: in March, Macau gambling houses demonstrated revenue growth of 18%, amounting to MOP 21.2 billion (USD 2.6 billion). The growth continued throughout the year.

Russia is on the rise

According to PriceWaterhouseCoopers' estimates, the gambling industry turnover in Russia in 2007 was $4.6 billion, which was second only to England among the European countries. In 2009, the situation changed: casinos began to work only in special areas. It affected the market volume. Now there are five gambling zones in the country: Azov-City, Krasnaya Polyana, Primorye, Siberian Coin and Yantanaya. Some of the casinos work there since 2010.

As a result of 2017, all residents of the gambling zones of Russia noted the rise in attendance. Therefore, revenues to the local budgets in 2017 from Azov-City amounted to more than 231 million rubles, Krasnaya Polyana – 164.8 million rubles. This is almost twice as much as in 2016.

The attendance rate of the Siberian coin gambling zone in the Altai Territory in 2017 doubled compared to 2016, and the regional treasury received 90 million rubles.

Primorye is the largest investment project in the Russian Far East. Now there is only one hotel and casino there – Tigre de Cristal, hosting about 550 guests per day, while the rooms in it are booked for three months in advance. According to the plans, by 2025, sixteen hotels, a yacht club, ten villas for guests and a significant trade and exhibition complex will be built in Primorye.

Investing in casino: is it safe?

So, in general, the gambling industry is enjoying a boom now. But casino is a competitive business, therefore not all brands succeed in it. There are those, who go into a more massive online segment; there are also those who leave the scene. But large companies that have achieved success, profit not only from gambling, but also from other sources (real estate, resorts, travel services). Therefore, investing in their assets will be profitable.

Casino as a way of investment will be discussed in detail at RGW Moscow. Follow the announcements of the conference!