The Short Take:
- Local gaming companies like Penn National Gaming get the vast majority of their revenue from gambling. People go to their locations to do one thing – gamble
- Companies with the majority of operations in Asia (Wynn Resorts and Las Vegas Sands), specifically Macau, also get a large portion of their revenue from gambling due to the volume of gamblers and high rollers
- Gaming companies such as MGM and Caesars that have a dominant presence in destination locations like Las Vegas and Atlantic City get a smaller percentage of their revenue from gambling. Other amenities such as dining, shopping and shows are big draws for these locations
In the good ‘ole days, casinos were just that. Big rooms filled with slot machines, blackjack tables and crap pits. Sure, there was a restaurant or two and some shows, but these amenities were just there to keep the players in the building.
Today, many casinos resorts are much more. They are filled with amazing restaurants from celebrity chefs, some of the highest end malls in the country and gigantic venues where the world’s top singers and comedians hold residencies.
That got us wondering, how much does a casino company make from gambling these days? For many people, the restaurants, shows and great hotel accommodations are the draw to Vegas and other destination areas, but in their hearts these gaming companies still exist to draw you into the casinos.
To get an idea of how much gaming companies make from their casinos, we looked at the total revenue of six large companies and then figured out the percentage of that total revenue that comes from gambling. As you’ll see, the percentages of total revenue that comes from the casino varies greatly by company. All data used is as of the 9/30/18 quarter with the exception of Wynn. Wynn data is as of the 6/30/18 quarter.
The two gaming companies with the highest percentage of total revenue originating from their casinos are Penn National Gaming and Boyd Gaming. These two companies operate smaller casinos in local markets around the U.S. and casinos in Vegas that cater to locals. Penn National gets 81.9% of its total revenue from its casinos while Boyd gets 73.0%.
It’s no surprise that the vast majority of revenue comes from casinos for these two companies. Their properties typically do not have the high-end dining and shopping, or the headline shows. Their customers go to these casinos for one thing – to gamble.
Overview of the percentage of casino revenue as a percentage of total revenue for six of the top gaming companies:
The next two companies on the list also get a huge percentage of their revenue from gambling, but for different reasons than Boyd and Penn National. Las Vegas Sands and Wynn Resorts both have Las Vegas casinos, but their bread and butter are their operations in Asia, specifically Macau.
While the Vegas resorts owned by both Wynn and LVS are filled with top shelf dining and shopping, their Asian casinos are geared much more to gambling. Many people arrive by junket with their sole goal being gambling for the day. Even though there are top level amentias, shows and dining at these facilities, the vast number of people, and the huge number of high rollers, that gamble at these casinos prop up the casino revenue which overwhelms all of the other revenue segments. As a result, company-wide, Las Vegas Sands gets 71.6% of its revenue from gambling and Wynn Resorts get 68.5%.
Percentage of total revenue that comes from gambling:
Finally, Caesars Entertainment and MGM Resorts get the least of their revenue from gambling out of the six companies we looked at, around 50% each. Caesars does not have casinos in Macau and its many casinos in both Las Vegas and Atlantic City provide many non-gaming options like fine dining and amazing shows. MGM does have operations in China, but unlike Wynn and Las Vegas Sands, the vast majority of its revenue comes stateside. These domestic resorts pull in much more non-gaming revenue than the Asian resorts.
While these gaming companies typically do not break down their revenue by gaming and non-gaming on a location-by-location basis, the aggregate data they provide can lead us to some pretty solid conclusions:
- Casinos in destination areas in the United States such as Vegas, and to a lesser extent Atlantic City, receive less revenue from gambling as a percentage of their total revenue since their non-gaming amenities are such a huge draw.
- Local casinos throughout the U.S. are mainly draw day-trippers who go just to gamble.
- Asian properties are also heavily focused on gambling and the whales that play at these casinos generate so much revenue for the casinos that even the high-end amenities are overwhelmed by the casino revenues.
So the next time you’re in Vegas or your local casino, look around at all of the amenities that are offered, but be sure to know that the company really wants you to stay seated at the slot machine or gaming table.