- Jul 02, 2021 For example, many casinos offer “match play” money. That might be $5 coupons or chips, for example, but you have to bet $5 of your own along with each one. You can lose, but when you win $10 for betting $5 of your own money the odds are with you even at the worst games.
- Twin River Casino in Lincoln, Rhode Island, is a full casino with live table games, video slot machines, virtual table games, live entertainment and dining.
- Mar 25, 2020 The Maths – How Casinos Make Money. Let’s say that we are playing a game of flip the coin, and because we’re fun people we’re also betting on it. If we bet £1 a throw. I win £1 and you lose £1 if the coin comes up heads. You win £1 and I lose £1 if the coin comes up tails. That is what we call a fair game.
May 22, 2020 Another essential, yet often ignored factor in making enough money with casino affiliate marketing is your ability to negotiate better deals. Since you have already set up a market and registered for the well-paying affiliate programs. The next thing to do is negotiating new deals and higher commissions. For example, many casinos offer “match play” money. That might be $5 coupons or chips, for example, but you have to bet $5 of your own along with each one. You can lose, but when you win $10 for betting $5 of your own money the odds are with you even at the worst games.
How do Vegas Casinos Make Money?
The answer seems obvious right? Gambling. Hell, I just lost $200 at the craps table last week. Vegas casinos are ornate palaces. And those palaces are funded by people that get a kick out of feeding machines and chasing royal flushes.
What about all the “fringe” activities though? The dining, night clubs,hotel, shows, retail ,etc. Are they simply a draw to get us in the door as a loss leader or do they contribute to the casino’s bottom line as well. To answer the question, I dug into MGM Resorts 2016 financial report.
See Also:77 free things to do in Vegas. A complete list!
For those unfamiliar, MGM owns a number of properties in Las Vegas to include MGM Grand, Luxor, Bellagio, Excalibur, Circus Circus, Monte Carlo, New York New York, Mirage and Mandalay Bay. The accounting that I am looking at does include some non-Vegas properties as well, however, still provides a solid revenue and profitability snapshot.
Below is a high-level overview of MGM’s revenue per category or, simply put, what customers spent per activity before MGM deducted out expenses.
Casino revenue is defined as what the casino “won” over the year after paying out players. “Other Income” would be defined as income made outside of MGM’s core business (Example: Rented out excess warehouse space not being used to another, unrelated, organization).
Revenue per Category:
As you look at Revenue generated by MGM, it’s no secret that the Casino is king accounting for 48% of money coming in. Hotel rooms and Food/Beverage come in as the second two largest generators accounting for 20% and 16% of the company’s revenue in 2016 respectively.
When you take the revenue per category and subtract out the expenses incurred, you can get a nice, simplistic, high level picture of what the casino profits off of each category.
Although other categories carry some weight for MGM, the Casino still nets almost as much money as the rest of the categories combined at $2.2 billion dollars in net profit vs. $2.5 billion dollars net by room sales, entertainment, food/beverage and “other” combined.
There are additional expenses that eat away at MGM’s bottom line that aren’t directly attributable to one of the revenue categories above such as corporate expenses ($313 million dollars in 2016), administrative expenses ($1.4 billion in 2016), etc, however, the info above should give you a good idea of where Las Vegas casino revenue and profits are coming from. What’s clear is that although money generated from gaming is important, it’s not the only show in town.
As MGM Resort’s hotels provide the second-largest profitability and revenue punch I thought it would be cool to take a look at which of their Vegas properties command the highest rates and sport the highest occupancy.
Did Casino Make Money
There are 3 main terms you will want to know:
- Occupancy Rate – What percentage of rooms were occupied.
- ADR – Average Daily Rate – What did people pay on average per night.
- REVPAR – Revenue per Available Room – What the average nightly revenue was per room available (whether occupied or not). Basically, your nightly hotel revenue divided by total # of rooms.
Not surprisingly, Bellagio topped MGM’s charts for Average Daily Rate in 2016 at $278. Bellagio was also 91% occupied and had a Revenue per available room of $246 per night.
Circus Circus came in with the lowest Average Daily Rate at $83 and was 81.6% occupied. CC Las Vegas had a Revenue per available room of $68.
New York-New York notched the highest occupancy of MGM’s casino/hotel portfolio at 95.1% occupancy with an ADR of $141.
According to the UNLV Center for Gaming Research, it’s important to keep Gamblers captive overnight as in 2016 guests drove the following average revenue per room daily (all Vegas casinos – not just MGM):
Pit Revenue: $96.48
Slot Revenue: $105.83
Food Sales: $98.11
Beverage Sales: $43.73
In summation, it’s clear that Casino revenues in Las Vegas are king but there are other key drivers of resort profitability to include entertainment options, dining along with the property’s hotel. These fringe services are becoming a more important piece of the profitability picture as Millenials shy away from gambling and seek “experiences”. More properties are getting creative with revenue drivers and rightfully so. For instance, you can now hunt zombies in Virtual Reality at the MGM Grand or play Twilight Zone Mini Golf at Bally’s. You also can’t walk 15 feet in Vegas without tripping over a damn zipline attraction.
Gambling will remain the core but there is certainly a shift in Vegas toward new and innovative dining and entertainment options.
Will Casino Make Money
On a final and unrelated note, as of the end of 2016, MGM logged an “Outstanding Chip Liability” of over $227 million. Which one of you guys is hoarding all the chips? Cash those bastards in!
Check out our other piece – Could Circus Circus be the next Las Vegas implosion?
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