The owners of the brand new Resorts World Las Vegas, the Genting Group, likely had mixed feelings about their $4.3 billion investment opening during the middle of a global pandemic.
Resorts World, which sits on the North Strip, well away from Caesars Entertainment (CZR) – Get Caesars Entertainment Inc Report and MGM Resorts International (MGM) – Get MGM Resorts International Report properties on the south and central strips.
It wasn’t just a gamble due to its cost.
The company was also counting on being the first of many major development projects on that somewhat barren section of Las Vegas Boulevard.
Yes, Resorts World serves as a destination in its own sense, but the Caesars, MGM, and other properties on the south and central part of the Strip feed off each other.
Tourists might stay at one hotel, eat at another, and see a show or gamble at still another property.
During the worst of the pandemic with the city closed to tourists and then in its highly-regulated reopening, Genting had to have at least wondered a little bit if their bet would pay off, or if the many projects in the works near Resorts World would fall apart if tourists did not return.
Now, Genting and the rest of Las Vegas can breathe a sigh of relief.
Not only is the long-delayed Fontainebleau Las Vegas moving forward with a planned 2023 opening, the North Strip also has an NBA-ready arena, and another planned casino from Siegel Group, a Las Vegas-based real estate developer.
That’s at least partly because whatever fears casino operators had about Las Vegas making a huge comeback have been put to rest.
Las Vegas Strip Leads a U.S. Gambling Comeback
While Las Vegas had some tough months in the early days of the pandemic, it put those problems in the past very quickly. 2021 set “a new annual record for commercial gaming, reaching $53.03 billion.
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That’s a 21.5% increase from the previous high in 2019, according to data from the American Gaming Association (AGA).
Casino operators nationwide took in gaming revenue of $14.31 billion in the first quarter of 2022. That’s a new first-quarter record “and nearly matches the all-time quarterly record, which was just set in Q4 2021 ($14.35B),” the AGA reported.
Las Vegas led the way in 2021, according to data from the report shared by the Las Vegas Review-Journal.
The Las Vegas Strip was by far the highest-grossing gambling locale in 2021:
“The Las Vegas Strip is first at $7.05 billion, followed by Atlantic City ($2.57 billion); the Chicago area ($2.01 billion); Baltimore-Washington D.C. ($2 billion); the Gulf Coast ($1.61 billion); New York City ($1.46 billion); Philadelphia ($1.40 billion); Detroit ($1.29 billion); St. Louis ($1.03 billion); and the Boulder Strip in Nevada ($967 million),” it said .
The House Always Wins
More money spent gambling in Las Vegas also means more winning for casino operators.
That’s not generally something that executives from Caesars, MGM, or other casino operators talk about in order to maintain the magic of people looking to win as gamblers.
“U.S. commercial casinos won more than $5.3 billion from gamblers in March, the best single-month total ever. The previous record month was July 2021 at $4.92 billion,” the Review-Journal reported.
That’s a big number and a reminder to investors that casino gambling is a revenue driver, one in which the casinos essentially have their thumb on the scale.
Brendan Bussmann, founder of Las Vegas-based B Global, told the Review-Journal that he sees a lot of potential expansion for sports betting.
“There is still room for growth potential in the industry as it also continues to recover in various parts of the industry,” Bussmann said.
“As we see sports betting growth that will also drive gaming revenue, there will be continued upside. But as our economy faces significant challenges, we are teetering on potential challenges that could slow the current growth trends.”