In the final days of 2023, our hearts turn to the year that was in casino gaming.
The gaming industry is on track to set another revenue record. The total gross gaming revenue (GGR) through October was $55.7 billion. Given the monthly average of $5.5 billion, the total for 2023 will likely be about $68 billion, 11%-12% more than the previous record, set in 2022.
The biggest news for 2023 may well be sports betting. Total wagering has already passed $100 billion and will likely approach $115 billion and gross gaming revenue can be estimated at $9 billion. In 2018, the first year of legal sports betting outside of Nevada, the total handle was $4.6 billion with a GGR of $334.5 million. In that context, the explosion of sports wagering is stunning.
The growth of online gaming has been equally impressive, but thus far it has extended to only six states, while sports betting is legal in some form in 38 . Still, those six states will generate more than $6 billion in GGR. In 2002, the GGR for the entire year was just under $5 billion. Double-digit, organic, same-store sales are expected to continue. Dramatic growth will only come through expansion. In 2024, New York, Indiana, Illinois, Texas, and California will discuss online gaming. New York is the most likely to legalize it. New York alone would add an estimated $1 billion in GGR.
Las Vegas is always significant in the story of gaming. In 2023, Sin City outdid itself. Sports have become a major part of the city’s narrative. In 2023, the Golden Knights won the Stanley Cup, the Las Vegas Aces won the WNBA Championship (for the second year in a row), a Formula 1 race was held in November, and the Sphere opened, hosting major entertainment events and sports will debut there in 2024. Las Vegas conventions and music festivals bring thousands of free-spending people to town. The king of them all is the Consumer Electronics Show (CES). In 2023, it attracted near-normal attendance, 115,000 people, after several years of struggling under the weight of the pandemic. CES returns on January 9 with even more attendees expected.
Two major casinos debuted at the end of 2023 in Las Vegas. Coincidentally, both were long planned and much delayed. The Great Recession and COVID slowed them. The delays also gave both projects the opportunity to rethink their strategies, as very much had changed since the early 2000s. The first to open was the $780 million Durango, a Red Rock Resorts (Station) property; Durango represents Red Rock’s post-pandemic strategy: new properties scaled down in size, but with more luxury amenities, each located in newer and growing neighborhoods. Within a few weeks of the opening of Durango, analysts were already talking about an expansion that they expect to begin within a year.
The second major new property to open was the $3.7 billion Fontainebleau. The Fontainebleau traces its heritage to the original resort of the same name in Miami and it brings Miami luxury to Las Vegas. It offers 3,644 rooms, 36 restaurants, star-studded entertainment, and luxury amenities. It also promises to raise the bar in Las Vegas and set the standard for the next decade.
While Las Vegas adds to its already full menu of events and resorts, Chicago and New York City are just starting out as casino cities. After a long selection process and much-debated temporary site, Bally’s Corporation opened a temporary casino. Its performance has been underwhelming thus far, but Bally’s says it will get better. Still, after the first month, the company asked for an extension on the temporary license, the extra time to be used to improve performance, find financing, and begin construction on a permanent a billion-dollar casino-resort.
New York City is one long step behind Chicago; the Big Apple is still in the initial stage, selecting and approving sites and operators. New York is in the acrimonious stage where anti-casino, not-in-my-backyard, and no-change forces are fighting against pro-growth factions. It is hand to hand combat and there will be a few casualties. The year ends with nothing decided, but 2024 should see some resolution. No completed casino-resorts, but some consensus on sites, scale, and operators.
One big story stands in the no-man’s land between sports and casinos. Miriam Adelson, Sheldon Adelson’s widow, is buying a controlling interest in the Dallas Mavericks basketball team. The news came out of left field, but after the dust settled, analysts agree that Miriam is establishing a beachhead from which to launch the Las Vegas Sands’ (LVS) 2024 campaign to legalize casinos in Texas. Few, including leading politicians in Texas, believe that anything decisive will happen in 2024. However, LVS is in this for the long game and the company has already invested millions and 10 years in the process.
The two multi-state lotteries had a good year. Mega Millions awarded two jackpots over $1 billion and three over $300 million. Powerball had two billion-dollar jackpots and at year end has $640 million up for grabs. Last year at this time, Mega Millions had the same size jackpot ready for the plucking; it held on for a couple of weeks hitting on January 13 with a jackpot worth $1.35 billion. Nothing fuels lottery excitement like a potential billion-dollar jackpot during the Christmas shopping season. El Gordo, the Spanish version of our mega-jackpots has traded on that concept for more than 200 years; this year it awarded $2.86 billion on December 22.
Soon it will be 2024, a brand-new year, full of hope, uncertainty, and of course trepidation. Sports betting is certain to be center stage in the national gaming narrative as handle continues to grow. For Las Vegas, the Super Bowl in February will be a giant jewel in its newly acquired sports-capital crown. Sports will fade in April when the big betting season ends. From then until the NFL takes the field again in September, gaming revenues will decline. On the other hand, igaming can expect more organic growth and maybe even one or two new states welcomed into the fold. For Chicago and indeed the other new casinos in Illinois and Indiana, growth will probably be slow, but consistent. New York City is unique, marching to its own drum, but by this time next year, we should know the names of the city’s new casino operators.
Happy New Year!
