Industry Snapshot: Casinos and Gaming

Gambling facilities play an important role in the tourism marketplace. Many areas have these facilities and more are seeking to attract or develop them. Here is a short profile of the industry to spark your thinking.

After a slump in the wake of 9/11 and the economic slowdown 2001-2002, the casino and gaming industries have posted notable growth, generating total revenues of approximately $75 billion in 2004, largely composed of income from wagers on sports betting, slot machines and lotteries.

Whilst gambling machines continue to provide the highest revenues for the US market, non-gaming operations such as restaurants, hotels and retail stores are an increasingly vital source of industry profits. The potential legalization of online gambling would create a growth sector, triggering massive expansion within the industry, with Internet gambling already predicted to generate $1 billion in the US. Many of the leading players are developing online alternatives in anticipation of this change.

Over the past few years, several state legislators have allowed large scale increases in gaming activities in order to boost tax revenues. However, the gradually improving US economy has reduced state budget deficits and accordingly, the tide to expand gaming to raise government revenues has declined. Regulation regarding the classification of casinos as financial institutions and increasingly stringent rules to tackle problem gambling are also slowing growth within the industry, pushing up operational costs whilst removing an important sense of anonymity from the industry.

Leading US players include International Game Technology, MGM Mirage, Harrahs Entertainment, Wynn Resorts, Caesars Entertainment and the Mandalay Resort Group. MGMs pending $4.8 billion takeover of the Mandalay Resort Group is set to create the largest casino resort company in the world, controlling approximately 50% of the hotel rooms on the Las Vegas Strip. If the Federal Trade Commission approves the deal, the combined company will surpass number one ranked Caesars Entertainment and number two-ranked Harrah's Entertainment in annual sales.

Souce: www.reuters.com