Measuring China’s Impact on Las Vegas

written by admin
2017

Everyone in the gaming industry knows that Macau’s casinos suffered large downturns in revenue during the Mainland government’s corruption crackdown.  Chinese high-rollers knew that high-stakes gambling became a risky business, far from the baccarat tables.  When Beijing sneezes, Macau gets pneumonia.

But what about Las Vegas?

Macau is only one-sixth the size of Washington, D.C.  Yet, in 2013, its casinos, the only legal ones in China, won more than all the casinos in the United States, combined.  Almost all of that came from baccarat.

American operators with casinos in Macau actively recruit high-rollers to Las Vegas.  The tax rate and fees on gross gaming revenue in Macau is more than 39%; in Nevada, less than 8%

So, that same year, 2013, Nevada casinos won a total of $1.1 billion from blackjack, but $1.6 billion from baccarat, half a billion dollars more.  And there were nine times as many blackjack tables as baccarat tables: 2,704 to only 302.

A blackjack table won $405,000 on average that year; a baccarat table $5,290,000 – 13 times as much.  And the yield from baccarat was increasing.

Then came the crackdown on the Chinese Mainland.

By 2016, Nevada casinos still won $1.1 billion from blackjack.  But its high-limit baccarat tables, almost all located in Las Vegas, won only $1.2 billion.

It looks like the bottom was hit months ago.  Baccarat revenue is up in both Macau and Nevada.

But we can now answer the question of what impact China has on Las Vegas.  Even just a slowdown in visitors costs Nevada casinos more than $400 million a year.

When Beijing sneezes, Strip casinos catch a severe cold.

admin

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Comments

3 Comments

  1. GB

    just interested…where do you get your data from? is it publically available?

    • admin

      The numbers are from the Nevada Gambling Control Board, http://gaming.nv.gov/ .

  2. admin

    The numbers are from the Nevada Gambling Control Board, http://gaming.nv.gov/ .