A while back I wrote a piece about the growth of gaming in the United States, in particular about the growth of other forms of gaming. I cited Florida and California as examples – California with its 38 million people generates about $10 billion in gaming revenue without the need of a single tourist; the revenue comes from Indian casinos, the state lottery, racing and poker rooms. In the piece, I said Nevada was no longer the capital of gambling in the United States and casino gambling was no longer the only source of gaming revenues – clearly lotteries have become very important, but supported by slot machines in most jurisdictions, so has horse racing. It is time to reframe the way we think about gaming I said.
In that piece, I neglected to separate Las Vegas from the herd; Las Vegas is unique. Since the Las Vegas Strip began it has been the gold standard of casino gaming. Even if it does not produce more gaming revenue than another jurisdiction, it is still the gold standard of the industry. Gambling anywhere else is always compared to Las Vegas; when Macau started to surpass Las Vegas in gaming revenues, every month a comparison was made to Vegas. And so it is with Singapore and the Philippines – Las Vegas is the standard by which they are all measured. And now, Japan appears to be getting closer to legalizing casino gambling, it too is being compared to Las Vegas; and many believe that with casinos in Japan, it too will exceed Las Vegas in revenues.
Reuters had a headline on April 23rd that read: Japan casino lobby in legalization push; market could out-strip Vegas. The Japanese, like the Chinese, indeed like every Asian country, like to gamble; the Japanese have a very unique game of their own – pachinko; it is a quasi slot machine. Pachinko playing is not considered legal gambling, but gambling it is and it generates an estimated $378 billion a year in revenue; that is about 4 times the gaming revenue of the United States. That would suggest legalized casinos in Japan would be profitable and the gaming revenue would exceed all other jurisdictions.
A large and wealthy population coupled with a proximity to Shanghai and Beijing has the potential to transform Japan into a lucrative gaming centre, providing tax revenues to shore up the state’s ailing finances, analysts say. Broker CLSA estimates Japan’s gaming market could be worth at least $10 billion if two large-scale integrated resorts are approved – more than Singapore’s $5.9 billion and Las Vegas’ $6.2 billion in 2012. Reuters, 4-23-13
In all probability, eventually there will be several countries with gaming revenues that exceed those of Las Vegas. However, Vegas will still be above the rest, whether the casinos are in Macau, Atlantic City or Manila; casino gambling is only a small part of the Las Vegas story and it is much more than just casinos. It is the leading convention city in the country and has been for 19 years. Las Vegas more hotel rooms than any American city, it has 17 of the 20 largest hotels in the country (15 out of the top 25 in the world). The an average room occupancy approaches 90 percent; every day 135,000 hotel rooms are filled, usually with two people and that means 270,000 out having fun on the Strip. Las Vegas is a resort – a resort unlike any in the world; comparisons are often made to Disneyland calling Las Vegas an adult Disneyland and indeed it is; a wonder world filled with never-ending surprises and excitement at every turn.
Las Vegas has again topped TradeShow News Network’s list of the top conventions and trade show hosts in the United States in 2012 with 53 shows in the top 250. The Las Vegas Convention Center had four of the top 10 shows, ranked by square footage, including the largest show in the country, the Consumer Electronics Show. It’s the 19th straight year that Las Vegas has retained the No. 1 ranking. Last year, Las Vegas had 55 of the top 250, but that list included the ConExpo-Con/Agg show, which meets once every three years. Richard N. Velotta, 4-19-13
The city holds the top 17 spots out of the 20 largest hotels in the United States, with MGM Grand still reigning as the largest, having 4,996 hotel rooms. Rounding out the top five are the Luxor with 4,400; The Venetian with 4,027; Aria with 4,004; and Excalibur with 3,991…Las Vegas also has the largest inventory of any U.S. city, with 150,481 rooms. Orlando, Fla., is second, with 117,396 rooms, followed by Chicago, which has 107,920. Los Angeles and Atlanta take up the No. 4 and 5 spots, respectively, with 96,529 rooms and 93,700 rooms. Laura Carroll, Las Vegas Review-Journal, 4-22-13
Japan, Macau, Singapore and the Philippines may end up with lots and lots of casinos and oodles of gaming revenue; they may even become exciting destinations filled with glorious amenities – but none of them will come close to reproducing all the Las Vegas has created since the Flamingo opened in 1946. Las Vegas will remain the gold standard for a very long time and partly because it is always changing and evolving. Just when you think you have seen it all, the world’s largest observation wheel will open, a Resorts World will spring up out of an empty lot and Caesars will spend a hundred million dollars on a little park for your daily stroll. At its best, Las Vegas is man’s imagination set free; let out of the boxes of every life of the average city and running wild up and down the Strip. All other jurisdictions are too concerned about control and collecting revenues to allow another Las Vegas to develop organically as the original, the one-and-only Las Vegas developed.
This may sound too much like depression-era boosterism to you and you are right, Las Vegas is not perfect or without its faults. Certainly, Las Vegas is primarily a place people go to gamble, they risk their money and the odds always favor the house; without the gambling Las Vegas would never have been more than a railway stop in the desert. Las Vegas does have its underside, cab drivers that overcharge, people who gamble more than can they afford, people who are not able to control their gambling, a large homeless population, a skin and drug subculture, a gaming industry that some argue does not pay its fair share of tax and which has too much political power. Still, it remains a place where free market capitalism functions the way the theory says it operates; Vegas was built to satisfy the desires of its visitors and to take their money for satisfying them. The game in Las Vegas is to build, not a better mouse trap, but a more perfect expression of the human desire to be entertained, take a risk and play; and in the process those playing in the desert are able to forget for the moment the cares and responsibilities of daily life.
Possibly gambling in Las Vegas should be more regulated and limited, it would be less risky and damaging for many its residents and visitors. In the same spirit, the casinos in Las Vegas could pay more taxes and that would certainly help both the local and state governments. However, it is the low tax rate and minimum level of regulation that created the magical world of the Strip with its hundreds of billions of dollars invested on a four mile long strip of desert land, hundred thousand employees and two hundred and fifty thousand visitors a day. Other places have or will have gambling halls and hotels – but none will have an imaginary kingdom in the desert to match Las Vegas.
