The trend is continuing and growing at Strip casinos that make more money off their rooms, restaurants and entertainment than from the table games and slots.
“Spending patterns are changing,” Michael Lawton, (senior research analyst for the control board) told the forum. His chart showed that since 1999, the nongaming revenues have surpassed the games and slots.
Nongaming revenues have been increasing every year for 13 years and Las Vegas casinos are finally deciding to follow those changes in consumer preference on a large-scale.
Looking back, when the Cosmopolitan opened in December 2010 it may have been a sign that things would be different in Las Vegas. Their focus has been on creating a casino to eat, drink and party. Not a casino to gamble.
While people (including me) looked at their poor gaming revenue as being bad for the casino, they may be looked at as a trail blazer for the new Las Vegas – even if they are sold and losing tons of money every quarter. Their short-term losses may become long-term a win.
We’re seeing sportsbooks get smaller (at Flamingo) because they don’t generate the same revenue that renting space to a place selling $15 margaritas does (at Carlos & Charlies). Sportsbooks are being farmed out to companies like William Hill or Cantor Gaming and streamlined to the point where they may be obsolete in the future.
While some slot machines are being taken off the floor for electronic table games some of that space is also being devoted to new restaurants.
Thankfully there are still gaming tables for people like me but expect less of the Vegas casino to be devoted to that kind of fun since that seems to be what the majority of customer money is being spent on.
Over the past year or so there has been an influx of walk upsportsbooks in Las Vegas casinos. Most recently Cantor Gaming has introduced a walk up sportsbook at The Palazzo and another at Palms.
The walk up sportsbook at The Palazzo is all about convenience and access. Lagasse’s Stadium is located in the basement of the casino and typically only to be found by people seeking it out. It’s also a relatively long haul for someone staying at the hotel since it’s located on the opposite end of the property. The walk up sports betting desk at The Palazzo is in the center of the casino and will catch the casual sports bettor as well as people that are leaving the casino and don’t want to forget to place their bet.
On the surface, the Walk up sportsbook at Palms is a little more curious since the actual sportsbook is only a 90 second walk away. However, the sportsbook is out of site in the corner of the casino that’s more for Vegas locals then tourists. This walk up section is located near the hotel elevators and table games where the tourists and gamblers are. Again, this will reach casual sports bettors.
Even though sports betting only makes up a small part of a casinos bottom line it is growing in awareness with these non-traditional placements. Don’t be surprised that these walk up sportsbooks and kiosks replace actual sit down sportsbooks in the future.
As fantasy football and betting with apps continue to grow in popularity sportsbooks are being filled with people that aren’t generating any income for the casino or sportsbook. Unless all sportsbooks and/or casinos get into the fantasy football business (like Cantor Fantasy) why would a casino dedicate their real estate to people not spending money with them? They won’t.
Last week British bookmaker, William Hill received approval to run 159 sportsbooks and kiosks in Las Vegas. Those 159 include Leroy’s, Lucky’s and Cal Neva sportsbooks. While this gives William Hill great reach, it comes with little money.
While William Hill will operate 55 percent of the state’s race and sports books, it would only generate about 11 percent of the state’s book revenue. Race and sports books, while popular with a loyal clientele of sports bettors, generate less than 5 percent of the state’s gross gaming revenue and usually partner with resorts to run a casino’s sports wagering.
It will be interesting what direction William Hill takes these, mostly, locals sportsbooks. As you may or may not know I do much of my small sports betting with Leroy’s iPhone app. (You can see more thought on the app in my review at Vegas Chatter.)
More interesting is that this really consolidates the sportsbook market in Vegas. Consolidation is rarely good for the consumer as it narrows competition, but this may actually be good for the local sports bettor. This William Hill consolidation may provide better betting options and locations for the local Nevada sports better.
While Leroy’s sportsbooks may not see much of a change since many of their locations are in bars and not casinos, it’s possible that William Hill could breath life into Lucky’s and some Cal Neva sportsbooks. Lucky’s sportsbook at the Riviera could be the first to see some action.
While sports betting only represents about 1% of the bottom line for a casino improving the Lucky’s sportsbook at the Riviera would give a good excuse for many people to visit. Since many sports bettors are analytical and care a lot about odds, they may use this as an excuse to take in some the best gambling on the strip. The Riviera has 3:2 blackjack, 1000x odds craps and single zero roulette.
This may be just what the Riviera’s doctor ordered.
I’ve been around gambling most of my life. My first real exposure to a bookie was when I worked next door to one working at a candy store when I was around 12 or 13. They were serious dudes that scared me. They were also the kinds of guys that made lots of loot – like every bookie I’ve ever met.
Last year I moved to Las Vegas and I’ve been learning about legalized sports betting more and more. Yesterday I learned that there is a company, American Wagering Inc. (AKA Leroy’s) that takes wagers on sports that a) went bankrupt and b) lost $1.8 million in 9 months.
Despite its dominance in Nevada, American Wagering’s balance sheet is anemic by comparison. The company reported a loss of $1.8 million for the nine months ended Oct. 31 and generated revenue of only $14.5 million for the year ended Jan. 31, 2010. The company filed for Chapter 11 bankruptcy protection in 2003 and emerged in 2005, only to see business decline in the recession.
American Wagering is being purchased by a British company, William Hill, so I’m guessing that whatever advantage a bettor might have had is going to go away pretty quickly.
William Hill this month announced an $18 million deal to buy Nevada bookmaking chain American Wagering Inc., which operates Leroy’s sports books and provides the sports betting systems many Nevada casinos use to run their books.
For as long as I’ve been interesting in sports betting I’ve only heard of Leroy’s because they had the first legal sports betting app for mobile phones (not iPhone…boo!).
Still, how can a bookie lose money!? This is unprecedented as far as I know. As the article states, this is a future move for William Hill for when online gambling is legalized in America. For the time being it will be interesting to see how they effect sports betting in Nevada. It should be only for the better.