Gaming revenues nationwide in December reflected 2018 as a whole. It was a very good year.
Nationally, gaming revenues for a combined 23 commercial casino and video lottery terminal markets topped $42.69 billion for the year, an increase of almost 4 percent over 2017, according to the Adams Revenue Revue.
During the last month of the year, just one jurisdiction, Louisiana, reported a gaming revenue decrease.
“December revenue was driven, as it has been all year, by new casinos, more (slot machine-like) VLTs, and, in the last half of the year, by sports betting,” Reno-based gaming analyst and consultant Ken Adams wrote in the monthly report, which he produces for CDC Gaming.
Adams said 2018 “was a good year” for new casinos in New York, Massachusetts and New Jersey and a “very good year” for sports betting.
He said the gaming industry was helped during 2018 by an upsurge in the U.S. economy. Unemployment hovered at an all-time low of around 4 percent, wages kept pace with job growth, and retail spending was up more than 5 percent.
Gaming stocks, however, didn’t reflect the uptick in the economy. Many casino operators and slot machine manufacturers saw their values decline by as much as 30 percent during the year. Adams said 2018 was the worst year for gaming stocks since the Great Recession of the last decade.
“However, it is becoming the common wisdom to separate the stock market from the economy, rather than treat the market as an economic bellwether, as was the case in previous eras,” Adams wrote.
As for individual jurisdictions, New Jersey saw its gaming revenue jump 9.2 percent to $2.9 billion, fueled by two newly re-opened casinos in Atlantic City and the launch of legal sports betting in late June, which brought the activity to two racetracks in the northern part of the state.
New Jersey’s sports betting revenue from June to December was $94 million. The amount wagered was $1.24 billion.
Maryland’s gaming revenue increased nearly 8.2 percent in 2018 to $1.7 billion, led by MGM Resorts International’s MGM National Harbor, which has dominated the market since opening two years ago.
The Las Vegas-based company has created an East Coast foot print with its casinos in Maryland, Atlantic City (Borgata) and Massachusetts (MGM Springfield). Last month, the company completed its acquisition of the Empire Casino and Yonkers Raceway in New York for $850 million.
“That means MGM, which now operates the dominant casinos in Atlantic City, Maryland, and Massachusetts, will be adding New York to that list,” Adams wrote.
In Illinois, gaming revenue grew to more than $2.87 billion in 2018, up 6.4 percent. But the market’s story was the growing presence of VLTs*. Riverboat casino revenue fell 6.7 percent, but VLT revenue was up 15.1 percent. The state had 30,694 VLTs in operation by the end of the year, 8.5 percent higher than in 2017. VLTs are found taverns, bars, restaurants and other locations where alcohol is served and compete with the state riverboat casinos.
“The only thing that could change the narrative in Illinois would be more gaming options,” Adams wrote. “The legislature will most likely consider additional casinos, including one in Chicago, and slot machines for racetracks.”
Louisiana saw gaming revenue drop less than 1 percent for the year, but its casinos have been challenged by VLTs, a smoking ban in Baton Rouge, and the legalization of sports betting in neighboring Mississippi. State lawmakers did approve a law in 2018 to allow riverboat casinos to begin the process of moving their gaming operations on shore.
“Louisiana will probably approve sports betting, and some of the casinos may begin to migrate onto land,” Adams wrote. “Without those changes, 2019 will see even more struggles for the state’s casinos.”
CDC Gaming distributes the Adams Revenue Revue to premium subscribers.
Howard Stutz is the executive editor of CDC Gaming. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.
