How Much Do Casino Owners Make – Most people think that running a casino is almost a license to print money. But is that true? Are casino revenues really that impressive, or is it just a case of glamor and glitz masking shaky foundations?
Read on to get the details of Las Vegas earnings and find out how much the casinos make in a day.
How Much Do Casino Owners Make
The average daily profit of a casino depends on various things: they are businesses like others and some are doing well and some are not. After all, casinos go bankrupt from time to time!
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However, by looking at the financial reports of some of the biggest casino groups, we can get an idea of the profits that the most popular casinos make every day. One of these reports includes the average amount that a typical casino visitor spends at the casino.
Another reason is the coronavirus pandemic. This hurt land-based casinos a lot, but it didn’t affect online casinos the same way. We will analyze the income of this year 2019 so that the figures of this event will not change.
Flutter Group is the world’s largest online casino operator. Brands include PokerStars, PaddyPower and Betfair, among others.
Most of its income comes from sports betting: in 2019, it earned £2.14 billion ($2.95 billion), of which 77% came from sports and the remaining 23% is from casino games. Profit before tax was 136 million pounds ($187 million), a margin of around 6%. By increasing their offerings, online casinos are constantly making profits.
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This means that Flutter made an average profit of £370,000 per day in 2019 or around half a million dollars. Of course, it is spread over many different sites, but it is still very impressive because it is about gambling.
888 is another great online gambling operator, but it specializes in casino games more than sports betting. In 2019, they earned $530 million, with $441 million from online casino games and $90 million from sports betting. Annual profit in 2019 is $45.3 million, daily profit is $0.12 million.
, which has eight other casinos in Las Vegas, as well as several others in the United States and China.
According to MGM’s 2019 annual report, the Bellagio had a pre-tax profit of $465 million. This means an average profit of $1.27 million per day.
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In Massachusetts. He made an annual profit of 34 million dollars, an average daily profit of less than a hundred thousand dollars. Not bad considering it opened recently.
The most profitable land-based casinos are located in Macau, China. Look at the Venetian Macau: $1.4 billion in pre-tax profits in 2019, or about $3.85 million a day.
So why do land-based casinos make more daily profits than online casinos? One big reason is that land-based casinos have many sources of income besides their casino games.
A large portion of the annual income of Las Vegas casinos comes from non-gaming income. Things like:
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The 2019 MGM report breaks down the annual revenue of nine Las Vegas casinos. They made $5.8 billion in revenue for the year. This includes $1.3 billion in casino revenue and $4.5 billion in non-casino revenue (rooms, food, beverage, shopping and entertainment). Of the casino’s revenue, $1.2 billion comes from slot machines and $800 million from table games such as blackjack.
Slot machines are big business for Las Vegas casinos. MGM Group customers in Las Vegas spent $13 billion on slot machines in 2019, with MGM’s margin of less than 10%. Table games (eg roulette, baccarat, and blackjack) are smaller in volume but more profitable: $3 billion was spent on MGM’s table games in Las Vegas, and MGM lost 22%.
Poker represents a small part of casino revenue and takes up a lot of space. It would be better for the casino to replace the poker room with slot machines. And in fact, it happened in some places. However, most of the larger casinos offer it because they know that poker players will spend money on other casino games, as well as rooms and snacks.
Hotel rooms are as important as space in the results of the MGM group, with an occupancy rate of 91% and an annual revenue of $1.9 billion. Not far from the food and beverage outlet, which generated $1.2 billion across nine MGM properties in Las Vegas.
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Of course, annual income is just the amount taken in before expenses are taken into account. And casinos have great value, both physical and online.
Of course, gambling casinos generate income without focusing on the bottom line. They use other methods such as advertising, strategic partnerships, virtual currency, power-ups and other game improvements.
Online casinos have lower fees than land-based casinos. But that doesn’t mean running is easy! They still have a lot of money.
One of the biggest expenses of any online casino is marketing. There is a lot of competition and it is a real battle to attract and retain customers.
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It spent £465 million ($640 million) on sales and marketing in 2019, or 20% of its total revenue of £2.14 billion ($2.95 billion).
You will not get far as an online casino if you have poor quality casino software. Customers simply can’t stand it: they expect a standard, and if you can’t provide it, there are plenty of competitors who can.
It’s not just about the game either. Online casinos also collect data about player activity and use it to enhance the individual experience, offering new games and offers. It requires advanced technology, and it’s not easy!
Online casinos require several licenses to operate. Gambling is strictly regulated in most areas. Not only the cost of applying for all the right permits, but the cost of the special staff needed to make sure you apply for the right in the first place.
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It costs a lot of money to run a website that can serve thousands of users every day. You need to buy your own domain and pay for hosting. Many large casinos will have their own servers. The bigger the online casino, the more expensive it will be to run.
And online casinos must do everything possible to ensure that all data is completely secure. There’s a lot of money at stake and you can’t afford to be hacked by hackers, not only because of the financial cost but also because of the risk to your reputation.
Online casinos are taxed twice: first, all their “sales” are subject to general gambling tax, and then their annual profits are taxed like any other business. In the UK, for example, Flutter had to pay 21% of its revenue as “Remote Gaming Duty” and then 17.5% of its profits as corporation tax.
Online casinos do not have as many employees as traditional land-based casinos, but they still employ many people. In addition to the marketing, legal, and IT departments we’ve already mentioned, they also need a great customer service department. And many online casinos use dealers in “live” table games, which replicate the experience of a real casino.
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Land-based casinos have the same costs as online casinos, but there are fewer costs related to IT and more costs related to running a brick-and-mortar business.
Payouts are a major expense for land-based casinos. Doormen, waiters, bar staff, kitchen staff, ushers, pit bosses, pit bosses, slot operators, cleaners and security staff (including camera operators) are needed ).
And most land based casinos have hotels, so they need all the usual hotel staff too. And even though many casinos pay most of their workers the bare minimum, meaning they must rely on tips from casino-goers to survive, they are still growing. labor costs.
In 2020, the state of Nevada collected $622 million in gambling taxes from the casino industry. Casinos must pay 6.75% of their gambling revenue (that is, the money they make from their gamblers), but in 2022 there is a vote to raise this figure. to 9.75%.
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This is very low compared to other territories: for example the Monte Carlo casinos have to pay a tax of 15%.
And then there are the various game license fees and other business taxes.
The casino is famous for having no windows and is open 24 hours a day, so they are constantly lit by electric lights.
Lighting accounts for about one-third of the energy costs of a Las Vegas casino. And Las Vegas is also a very hot place, so casinos must have air conditioning. And of course, slot machines need electricity too.
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It’s no wonder the casino bills are so high. Casinos account for one-fifth of Las Vegas’ electricity consumption, and casinos use five times more energy per square meter than hospitals.
The casino can’t handle a blackout either: it will plunge the whole house into darkness! Therefore, they need to have a reliable backup system. And it’s expensive.
Comps are when the casino gives guests something free for playing. What they will give you depends on how much they value you as a customer.
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