Nevada casinos are roaring back. 44% YoY increase in month of February
Nevada Casinos Win $1.1 Billion In February
https://publicgaming.com/news-categories/casino-news/9189-nevada-casinos-win-1-1-billion-in-february
How Long Can Las Vegas Remain America’s Sports Betting Capitol?
How Long Can Las Vegas Remain America’s Sports Betting Capitol?
“To their credit, Las Vegas book operators did not ignore the landscape or the numbers. Instead, they took action on multiple fronts.”
One of my bucket list items is to catch the opening round of March Madness in a Las Vegas sportsbook. The excitement of multiple games playing out at once, seeing both buzzer-beaters and meaningless late baskets cause massive shifts in the fortunes of hundreds of crazed sports bettors all at once, is an experience many college basketball fans describe as simply “can’t miss”.
While it has long been a tradition for sports fans to venture to the desert to place their bets and enjoy the action, the city’s long-held status as the capital of the American sports gambling landscape is rightly being questioned. Following Murphy v. National Collegiate Athletic Association in 2018, in which the Supreme Court ruled in favor of New Jersey and then-Governor Chris Christie arguing the federal government could not prohibit state-sponsored sports betting, nearly three-fourths of the state legislatures have legalized wagering on sporting events in some form.
Prior to 2018, legal sports betting could only be enjoyed in Las Vegas or in Delaware–but there you were limited to just parlay bets. Now, the ruling has opened the door for various betting operators to expand their customer base and aggressively pursue new clients. Turn on any sporting event, whether on television or radio, and you will be bombarded with ads for DraftKings, FanDuel, and other sportsbooks promoting “odds boosts” and “sign-up bonuses” for choosing their brand.
Depending on the state, mobile or online betting may be your only method of placing wagers on sporting events. However, New Jersey changed their laws to allow for on-site gambling, bolstering the intake of their casinos, as well as allowing for online wagering. In May of 2019, the state saw $318.9 million wagered on athletic events, $1.5 million more than what was bet in Nevada that month. The data signaled New Jersey was a significant threat to the Las Vegas monopoly over the industry, as New York and Philadelphia residents flooded into the state to place their wagers both online and in Atlantic City.
In the first 12 months after passing legislation to legalize sports betting in the state, over $2.9 billion in wagers were placed. In their 2020 annual report, the New Jersey Department of Gaming stated that $6 billion was wagered on sports, versus just $5.4 billion in Nevada during the same time frame.
At the height of the pandemic shutdowns in America, fans wagered nearly $1 billion in New Jersey during the month of December alone. However, while the money clearly helped the fortunes of casinos that saw sparse crowds outside of the summer months, four-fifths of the money was wagered online or via mobile apps, with residents of other states crossing the border and placing their bets before driving home.
While New Jersey clearly made strides in taking away a chunk of cache from Las Vegas, it is difficult to argue they became the new place to be for sports betting. Aside from visitors doing little more than coming there to place bets before leaving, a large portion of the wagers in the state were made on basketball and baseball. The action on both college football and the NFL lagged far behind the amounts bet in Vegas.
The question remains, is Sin City losing its monopoly on live sports gambling? To their credit, Las Vegas book operators did not ignore the landscape or the numbers. Instead, they took action on multiple fronts. First, multiple casinos got in on the online betting wave, with MGM and Caesars both launching aggressive marketing campaigns to promote their online books. They also struck lucrative deals with the NFL, NHL, NBA, and MLS to partner with those leagues and their teams in an effort to promote their brands, and consequently their Vegas properties.
Additionally, there are two additional seismic shifts that could alter the landscape of American sports betting and directly impact Vegas’ stature. First is the legalization of sports gambling in the state of New York, which in January of this year saw more than 1.2 million sports betting accounts activated in the first ten days. In the first two weekends of action, the books for DraftKings, FanDuel, Caesars, and MGM logged more than 35.1 million wagers, nearly nine million more than New Jersey in that same timeframe.
While less than ten percent of those wagers were placed by individuals who reported betting previously in New Jersey, it indicated that the 20 million residents of New York were more than happy to partake in sports betting and keep those dollars in-state. With brick-and-mortar sportsbooks being just a couple of years away, it remains to be seen how many of those individuals will no longer travel to Atlantic City or Las Vegas to be able to place their wagers in person. That said, the biggest challenge to New York overtaking Las Vegas–or even New Jersey–is the staggering 51% tax rate levied on operators in the state, more than triple what those same companies pay in the Garden State.
The bigger threat to Las Vegas’ standing is California, where residents will travel to the polls this November to vote on whether to legalize sports betting on Native American lands within the state, as well as “offer online or mobile sports wagering”. This would be a significant impact to Las Vegas’ bottom line, with a 2019 Las Vegas Convention and Visitors Authority report indicating that 18% of their visitors in 2018 were California residents. Given a large number of professional teams within the Golden State, the passing of the legislation could see millions of dollars and thousands of visitors siphoned away annually.
Voters in the nation's most populous state will get a chance in November to unleash a massive new industry in California — and provide a jolt to other holdout states.https://t.co/upcDwbekP6
— POLITICO (@politico) March 30, 2022
Even before the pandemic changed the landscape of American life, the city was looking to entrench itself in the new world order of sports betting. Plans to hold the 2020 NFL Draft in front of the famous Bellagio fountains ultimately had to be placed on hiatus, but this month that endeavor will be realized. Additionally, the Vegas sportsbooks’ partnerships through their professional teams enable them to hold sway with professional leagues in ways that were shied away from before. For example, MGM has direct access to the WNBA by hosting the Las Vegas Aces franchise at the Mandalay Bay Michelob ULTRA Arena.
In an interview last month with SportsPro, Caesar’s senior vice president of retail David Grolman stressed that turning gambling on sporting events into an experience, rather than an activity, is important. He stated they had some of their biggest post-pandemic crowds during the Super Bowl and March Madness, with activities that “you can’t do anywhere else”. Grolman also told SportPro that Vegas must embrace new technologies, rather than view them as a threat.
“What we hope (digital) does is bring people into our brick-and-mortar casinos to enjoy everything else that we have to offer,” he said, later adding, “It’s hard to find anything more exciting in the world than sitting in a sportsbook during March Madness.”
The shift to online gaming and the threats from other states legalizing sports wagering have also led to a significant change in how people set up their accounts. Previously, you could only set up a wagering account or deposit funds into your account in-person within the state of Nevada. Now, new regulations from Nevada Gaming Commission will take place in June that enable customers to establish cashless wagering accounts for gaming prior to arriving at a casino, a change that vastly improves the in-person betting experience.
A Goldman Sachs report in March of 2021 estimated that online gaming and sports gambling could become a $40 billion industry by the year 2033. If the proliferation of television and radio advertisements are any indication, that number could be realized sooner rather than later. While the large majority of that business will continue to be driven via online and mobile app wagering, Las Vegas looks to continue to be the place to be for in-person sports betting due to their density of casinos and the unique “experiences” that few competitors can offer. The city’s ability to adapt to new technologies and react to the potential threats in New York and California will be key factors in how long that continues to be the case.