Las Vegas casinos are surprisingly unprofitable
Last update: March 2021
Most people think casinos are raking in the dough because the odds are in their favor and their decor screams opulence. The truth is that lots of casinos struggle, and a fair number actually go bankrupt, because while revenues are high, expenses are often higher (employee salaries, utilities, and the loan payment on the building and furnishings). While this article is limited to Vegas casinos, casinos everywhere often struggle to be profitable. (Donald Trump's Atlantic City casinos famously went bankrupt three times.) Here's a rundown of Vegas casino struggles with profit.
Gambling is becoming less popular (ongoing)
One reason casinos are doing so poorly is that gambling revenues are going down. That's primarily because as older gamblers pass on, they're not being replaced by as many millennials. Also, as casinos have tightened the games and hotels have increased their nickel-and-diming of guests, I imagine that more and more potential visitors are deciding to skip Vegas (or if they come to Vegas, to at least skip the gambling floor).
| Gambling revenue is plummeting | ||
| Las Vegas | Nevada | |
| 2007 (peak) | $8.5B • 49,891 machines | $15.9B • 180,666 machines |
| 2019 | $6.6B • 38,864 machines | $12.0B • 144,593 machines |
More slots stats on the slots page. Sources: 2007, 2019 |
||
Devastated by coronavirus (2020)
- Wynn lost $2.1 billion in 2020. (MarketBeat)
- Sands lost $2.1 billion in
2020. (Sands)
Sands operated the Venetian and Palazzo, but its main business is
actually in Asia.
- Caesars Entertainment lost $1.8
billion in 2020. Note that Caesars Entertainment
isn't just Caesars Palace; the company owns lots
of casinos. (Caesars)
- MGM Resorts lost $1 billion in 2020. Analysts figured that MGM burned through a staggering $14 million per day while its casinos were shuttered. Even though they reopened soon, they still took a big hit. (MacroTrends) Note that MGM Resorts isn't just the MGM Grand; the company owns a lots of casinos.
- Red Rock Resorts lost $175 million in 2020. (PR Newswire) Red Rock is the parent company of Station Casinos, which operates the Palms and a number of locals casinos, as well as about a dozen casinos elsewhere in Nevada.
- Boyd Gaming lost $135 million in 2020. (Boyd) Boyd operates three casinos downtown and a number of locals casinos.
U.S. casino companies take a hit in China (2020)
Before Vegas shut down due to COVID-19, casinos in Macau, China
did, and many of them are owned by U.S. companies like MGM (which
operates several casinos on the Vegas Strip), Sands (ditto), and
Wynn. When their Macau casinos closed, it reportedly cost the
owners a whopping $167M/mo. (Sands), $100M/mo. (Wynn), and $56M/mo.
(MGM).
SLS flirting with bankruptcy (2014-19)
SLS replaced the Sahara in 2014, and lost money every year through
2017, and as of Dec. 2017, was reportedly facing bankruptcy.
MGM Resorts unprofitable for 7 out of 8 years, losing $3 billion
during that time (2008-15)
MGM Resorts, which owns a whopping 10 of the 29 strip casinos, suffered the following losses:
2015: $448M loss
2014: $150M loss
2013: $172M loss
2012: $1,800M loss
2011: $3,100M profit
2010: $1,400M loss
2009: $1,300M loss
2008: $900M loss
Luckily for them, they were profitable from 2015-19.
However, in 2019, MGM sold three of its properties (Bellagio,
Circus Circus, and even the MGM Grand) to get some
desperately-needed cash. MGM will continue to operate the
casinos, paying rent to the new property owner. That's got to
be sad for them: MGM doesn't even own its own MGM Grand!
Lucky Dragon goes bankrupt 15 months after opening (2018)
Lucky Dragon was the first resort property to be built from the
ground-up after the Cosmopolitan in 2010. It opened in
November 2016, shuttered the casino in Jan. 2018, and filed for
bankruptcy in Feb. 2018. The hotel is still operating as of
March 2018.
Caesars files for bankruptcy (2015)
Caesars Entertainment, which owns 10 properties on the Strip and is
the largest U.S. casino operator, filed for Chapter 11 bankruptcy in
Jan. 2015, erasing about $10 billion in debt. (It's funny how
they can use legal maneuvers to get out of paying what they owe,
while if you stole a $5 chip from the casino you'd go to
jail.) It emerged from bankruptcy in Oct. 2017.
Riviera goes bankrupt and closes (2010-16)
A popular strip casino which appeared in several movies, it filed
for bankruptcy in 2010, closed for good in 2015, and was demolished
in 2016.
Terrible’s goes bankrupt (2009)
Terrible's, which owned a few casinos in Nevada, including one in
Las Vegas, went bankrupt in 2009.
Aladdin goes bankrupt (2001)
The Aladdin casino filed a $1.2 billion bankruptcy in 2001. The property would eventually become Planet Hollywood. (Las Vegas Sun)
Other sources
LV Revealed's Las Vegas Casino Death Watch is comprehensive reporting on casino troubles and closings.