It’s going to take a well-timed combination of factors to keep gaming revenue rolling after 14 months of record-breaking performance.
The American Gaming Association last week reported that the gaming industry — paced by results in Nevada — had the strongest two months of revenue growth in history in January and February. That comes on the tail of record increases in 2021.
While some of that growth can be tied to a bounce-back from COVID-19 fatigue, much of it also can be attributed to industry and community investments that draw people and their spendable income to Southern Nevada.
Nationally, commercial casinos generated $8.92 billion in January and February, a 19.1 percent increase from the first two months of 2020. Nevada contributed $2.192 billion of that, 5.3 percent ahead of two years ago and the 11th and 12th straight months that gaming win in the state exceeded $1 billion.
So what’s going to keep the pot growing? Experts say it includes efforts to get the meetings and convention industry back to full strength; growing infrastructure, not only at resorts but with attractions that will make visitors want to return multiple times per year; and tweaks in gaming regulations that will foster additional betting in Nevada.
The meetings and convention rebound is underway.
Brian Yost, chief operating officer of the Las Vegas Convention and Visitors Authority, said efforts to make the nation aware that Las Vegas is back in business were jump-started last week with Global Meetings Industry Day.
Some of the city’s leading meetings planners collaborated with national tourism leaders and Nevada’s congressional delegation to affirm that Las Vegas is the top destination for large gatherings. The message included reminders that there are plenty of new things to make the city an even better host than in the past.
“The entertainment venues that came with the addition of Resorts World Las Vegas, Area15 and the incredible sports destinations that came with the addition of Allegiant Stadium and Circa … those are all relatively new assets to the destination, and we need to remind meeting planners that they’re here and that they’re part of the Las Vegas experience,” Yost said.
The end of 2023 will bring the opening of MSG Sphere at The Venetian, another attraction Yost expects to be a game changer for the meetings and conventions industry.
“We are the world’s home of entertainment, and now sports,” he said. “Having this brand-new product in the market, the Sphere, will continue to allow us to maintain our domination of that segment in both entertainment and sports.”
Another big fan of the Sphere is Alan Feldman, a distinguished fellow at UNLV’s International Gaming Institute and a former executive with MGM Resorts International.
“Some of the facilities growth we have coming online in the foreseeable future, like the Sphere, is amazing because there’s nothing like it anywhere,” he said.
New sports facilities
Feldman added that a major league baseball stadium, as envisioned by the Oakland A’s, would create a new market of potential Las Vegas visitors. The A’s are considering relocation to Las Vegas from the Bay Area.
Reports that the Oak View Group, a sports entertainment venue development, advisory and investment group, is looking to build a $3 billion project centered around a $1 billion, 20,000-seat arena south of the Strip could be another game changer. Oak View has shown interest in attracting an NBA franchise, another potential visitation-expanding market.
However, Feldman said there is something Las Vegas doesn’t need.
“What Las Vegas doesn’t need is 20,000 to 40,000 rooms added over the next six months,” he said. “It probably would be better to have that kind of inventory added over the next six to eight years. A slow and steady growth would be healthier for the market, and if you look over the last 25 to 30 years, you can see that, with rare exception, those moments where there’s been enormous heavy growth over a very short time hasn’t always been beneficial.”
More rooms would lead to rate erosion, he said.
Feldman said gaming regulators also could have a role in Southern Nevada’s future financial fortunes.
The Nevada Gaming Control Board already has formed the Esports Technical Advisory Committee to lead the way to establishing policies and regulations on wagering on video game competitions.
“I think esports represents a significant growth opportunity for Nevada, but it isn’t going to be easy,” Feldman said. “It isn’t a flip-the-switch-and-it-happens thing. It has to be nurtured and groomed.”
Regulators should also revisit current policies requiring sports bettors to appear in person at casinos when registering to wager online with an app. In New Jersey, online gaming revenue has exploded because bettors aren’t required to make the extra trip to one or multiple casinos to have sports betting apps on their phones.
“Frankly, I find the debate a little bit head-scratching,” Feldman said. “I have applied for home loans online and never once met a human being in the process until I had to sign for it, and even then it wasn’t with anyone with the financial institution I was working with. It boggles my mind that we would still require someone to come in and make them present an ID when I can do facial recognition and digital recognition on my phone.”
Technological advancements have simplified registration processes in many industries — but not in gaming.
“I’m not entirely certain why we’re having it, other than the notion that we’re going to force people to go into a bricks-and-mortar facility and maybe they’ll spend a few bucks when there,” he said. “I appreciate the notion of that from a business point of view, but in my mind that’s not what the consumer is looking for.”