The commercial aspect of casino gaming has undergone immense changes over the last few decades. There have been many new markets that have emerged and are continually growing, boosting the revenue generated by casinos. The revenue generated by casinos is expected to reach $227 billion by the middle of 2020. While brick and mortar casinos have experienced a decline in revenue, these are not the only places that have undergone transformation.
Economic Volatility Across the World
Casino revenue can be affected by the level of economic volatility across the world. For example, the devaluation of the yuan in China has caused a 66 percent decrease in first-half net profit for Galaxy Entertainment. Although the impact of devaluation is still being studied, analysts have suggested that it will affect mass gross gaming revenues by eight to 10 percent this year, and revenues in the VIP segment could decrease by 20 percent.
Several factors contribute to the globalization of new online casino revenue. In Macau, a change in the mainland China’s visa policies could result in the loss of gaming revenue. Fortunately, the casino industry is not entirely at risk. According to the World Economic Forum, there are some key factors that could prevent the region from losing its gaming revenue.
The first factor is the growth of casino revenue in Asia. While the United States and Europe still dominate the global casino revenue market, this region is now overtaken by the growth of Asian markets. This trend can be attributed to the successful establishment of casino businesses in Asia. In fact, revenues from Asian markets have exceeded those of US markets. As a result, nearly three-quarters of global casino revenue is now derived from Asian markets. Regulatory uncertainty in the Asian markets has resulted in volatile market conditions.
State Gaming Revenue Pace
The State gaming revenue pace in the United States is slowing. From 2008 to 2015, gaming revenue in the United States declined by 2.1 percent. While the District of Columbia reported revenue growth, the rest of the nation saw a decline. Moreover, the revenue generated by gaming in the United States is not a reliable source of state revenue because of costs.
In fiscal year 2015, state gaming revenues rose by only 1.5 percent, or 0.2 percent after adjusting for inflation. While state gaming revenue varies by type, the two largest sources of gambling revenue in the United States are commercial casino operations and lotteries. Other sources of gaming revenue include racinos, pari-mutuel wagering, and video gaming machines.
Online Casino Gaming
Online casino gaming has become a very popular way to entertain people from all over the world. According to statistics, this industry is expected to reach $59 billion by 2022. However, there are certain challenges associated with the growth of this industry. Different states have different laws pertaining to gambling, which can limit the growth of this industry.
Although casino gambling is often lumped into the broader “betting” category, it is actually distinct from this. In the United States, for example, most people visit casinos to play slots, blackjack, and poker. Roulette is also popular, but only accounts for 5% of casino visits. Mobile slots have become very popular as well, with some life-changing jackpots credited to these games.
Native American Casinos
In 2011, Native American casinos in the United States earned $27 billion in total revenue. This amount includes the revenue generated by casinos and non-charitable bingo. Of this amount, $1.6 billion went to operators, mostly non-Indian corporations. As of 2011, there were 240 tribal casinos and approximately 460 gaming establishments.
Native American tribes are attempting to diversify their businesses beyond gaming. The Mille Lacs Band of Ojibwe, for example, purchased two hotels in St. Paul, Minnesota, making it the largest hotel owner in the city. The Winnebago tribe in Nebraska, meanwhile, owns 24 national and international companies, from advertising to construction. As Native American tribes continue to expand, they are investing in more stable businesses, including construction and retail.
Tribal governments set priorities and determine how to use the revenue generated by casinos. In many cases, the RSTF and casino profits are distributed to community members. However, perceptions of the benefits and drawbacks of these payments vary widely across communities.