Given the state of the world these last couple of years, it’s not surprising that the online casino industry – both domestic and offshore – has taken off in a big way.
But what is surprising is that 2021 actually proved to be the most consistently lucrative in Las Vegas history.
Before the coronavirus, there was plenty of sentiment in the gaming industry that Vegas (and the larger nationwide gambling industry) was at a crossroads.
The old generation of in-person gamblers was nearing its sunset, and the biggest retail venues were scrambling to find new ways to attract the younger, more smartphone-addicted demographic.
Things were very much skewing toward “doom and gloom.”
However, a funny thing happened on the way to the pop-up COVID testing site.
As Nevada (and the rest of humanity) issued sweeping lockdowns and closures for most industries – including the casino industry – in 2020, it seemed like most of these markets would be facing a long road to recovery.
For the gambling market in Sin City specifically, several long-lived casino venues closed permanently, while tens of thousands of employees were laid off industry-wide.
Nevada casino revenues were down about 97% year-over-year when all was said and done.
And then came 2021.
But the light at the end of the tunnel, as soon as it was credibly in sight, was seemingly snuffed out with the advent of the “Delta variant.”
Only…it really wasn’t.
Despite the hype, Vegas-area casinos didn’t go into full lockdown again, and – with mask mandates and social distancing rules in place to limit in-person players on the casino floors – they stayed up and running.
And somehow, they set record after record (after record) for rake and house take.
After the worst year in Vegas gambling history, Vegas had the best year ever.
In 2021, as of November’s monthly revenue reports, Las Vegas casinos cleared $1 billion for the ninth straight month. And that’s not handle, either. That’s take.
Industry analyst Chad Beynon, reporting at Yahoo! Finance Live, called the health of the casino industry one of the biggest wins of 2021:
“So from a fundamental perspective, the casino industry in the United States was probably one of the brightest surprises. I think as people came back from the COVID restrictions, casinos were actually a place that they found to be very comfortable, and also a place where they wanted to spend their entertainment dollars. So across the US, including Las Vegas, we saw record fundamentals, record revenues, and that also translated to record profits.”
Nevertheless, the industry still isn’t out of the woods. Per Beynon, in the same report:
“Now on the flip side of the coin, while all this was going on, there were two other things. One, you had China and Macao that essentially was in lockdown. One of the reasons why Las Vegas Sands was one of the worst performers in the S&P as you mentioned, just because of their focus on China. And then the second thing was this new thing called sports betting and online gaming, which has essentially been legal for three years.”
Fair enough.
And while domestic online sports betting is available in more than half of all US states (including Nevada), state-based iGaming remains largely unavailable for the dramatic majority of the country.
Additionally, with competition from legal online casinos and legal offshore sportsbook sites, the overall industry is still in relatively uncharted – and unstable – waters.
As a result – even as Vegas sees record profits – stock prices of major casino brands have taken a protracted downturn over the course of the year.
And even as the main drivers of losses in 2021 were American interests in the Chinese gaming market, the catalyst of said losses could be spreading stateside.
With the renewed COVID hype around the “Omicron variant,” there’s fresh concern that more lockdowns are on the horizon.
Indeed, just yesterday, the Nevada Gaming Control Board released a stern statement foreshadowing that likely outcome:
“Emergency Directive 045 requires each person, including fully vaccinated individuals, to wear a mask in public indoor settings in counties with substantial or high transmission of COVID-19. …
As Nevada prepares for a substantial rise in visitation for the New Year’s holiday, the Board will intensify its enforcement of Emergency Directive 045 at all licensed locations subject to the mask requirement to ensure the safety of Nevada’s residents and visitors.
The Board reminds its licensees, gaming employees, and the general public that a licensee in violation of any federal, state or local law or regulation is a violation of Nevada Gaming Commission Regulation 5.011, and that the Board may seek disciplinary action by the Nevada Gaming Commission for any such violation.”
So, masking is once again required for all casino patrons, regardless of vaccination status.
This is likely to drive down attendance, and it could lead to a snap of the streak above (assuming December numbers cleared the billion-dollar mark).
How serious the Omicron era will prove to be for the casino market is unclear, but pervasive, cyclical COVID instability could mean a riches-to-rags-to-riches-to-rags story for Vegas casinos.
Patrons were willing to sit out a year and bring their business back bigly once the doors reopened, but they may not be willing to do that again.
What’s worse, Vegas itself seems to show zero interest in offering real-money online casino games to residents and visitors.
As such, the streak seems truly imperiled.
For our part, we haven’t set foot in a brick-and-mortar casino in nearly three years, and we’re hardly compelled to break our own record streak.