How Much Does A Casino Owner Make
How Much Does A Casino Owner Make – Most people think that running a casino is a license to print money. But is this true? Are casino revenues really that impressive – or are they hiding the foundations of glamor and glitz?
Read on to find out the juicy details of Las Vegas revenue and find out how much the casinos make in a day.
How Much Does A Casino Owner Make
A casino’s average daily profit depends on a variety of factors – they are like any other business, some are doing well, some not so well. Casinos crash every now and then, after all!
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However, by looking at the financial reports of some of the major casino groups, we can get an idea of the profits that the most famous casinos make every day. One of these reports includes the average amount a typical casino visitor spends at the casino.
Another factor is the coronavirus pandemic. This hurt traditional casinos but not online casinos in the same way. We will look at 2019 earnings so that the numbers are not distorted by this event.
Flutter Group is the world’s largest online casino operator. Its brands include PokerStars, PaddyPower and Betfair.
Most of the revenue comes from sports betting: in 2019 it generated £2.14 billion ($2.95 billion), of which 77% came from sports and the remaining 23% from casino games. Pre-tax profit was £136m ($187m), up almost 6%. By diversifying their offerings, online casinos generate steady profits.
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This means that Flutter made an average profit of £370,000 per day in 2019, or roughly half a million dollars. Of course, it’s scattered across various sites – but still very impressive, as it’s only from games.
888 is another great online casino operator, but they specialize more in casino games than sports betting. In 2019, they generated $530 million in revenue, with $441 million from online casino games and $90 million from sports betting. Their annual profit in 2019 was $45.3 million – an average daily profit of $0.12 million.
, has eight other casinos in Las Vegas and several others across the United States and in China.
According to MGM’s 2019 annual report, the Bellagio made a pre-tax profit of $465 million. That’s an average profit of $1.27 million per day.
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In Massachusetts. It made an annual profit of 34 million dollars, with an average daily profit of just under one hundred thousand dollars. Still not too bad considering it opened recently.
The most profitable land-based casinos are located in Macau, China. Check out Venetian Macao: $1.4 billion in pre-tax profits in 2019, or an average profit of $3.85 million per day.
Why do land-based casinos earn more per day than online casinos? A big reason is that land-based casinos have multiple revenue streams in addition to their casino games.
A significant portion of the annual revenue for many Las Vegas casinos actually comes from non-gaming revenue. Things like:
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The 2019 MGM report breaks down annual revenue for its nine Las Vegas casinos. Together, they generated $5.8 billion in revenue. This consisted of $1.3 billion in casino revenue and $4.5 billion in non-casino revenue (rooms, food, beverage, shopping and entertainment). Of casino revenue, $1.2 billion came from slot machines and $800 million from table games such as blackjack.
Slots are big business for Las Vegas casinos. MGM Group customers in Las Vegas put $13 billion on its slots in 2019, with MGM’s margins below 10%. Table games (eg roulette, baccarat, blackjack) are lower in volume but more profitable: MGM’s Las Vegas spent $3 billion on table games, with MGM taking a 22% cut.
Poker makes up a very small part of a casino’s revenue and takes up a lot of space. A casino may find it more profitable to replace its poker room with slot machines. It has actually happened in some places. But most big casinos offer it because they know poker players spend money on other casino games, rooms and refreshments.
Hotel rooms are equally important to MGM Group’s bottom line, with 91% occupancy and $1.9 billion in annual revenue. Food and beverage sales were not far behind, with $1.2 billion in revenue from MGM’s nine Vegas properties.
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Of course, annual income is just money received before expenses are taken into account. Casinos have many costs, whether they are land-based or online.
Of course, lotteries generate income for casinos without focusing on the house edge. They use other means such as advertising, strategic partnerships, virtual currencies, power-ups and other game enhancements.
Online casinos cost less than land-based casinos. But that doesn’t mean they are cheap to run! They still have a lot of overhead.
One of the biggest expenses for any online casino is marketing. There is a lot of competition and it is a real struggle to attract and retain customers.
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In 2019, they spent £465m ($640m) on sales and marketing – 20% of their £2.14bn ($2.95bn) total revenue.
You won’t get far as an online casino if you have janky casino software. Customers won’t put up with it – they expect a certain quality, and if you can’t deliver it, there are plenty of competitors out there who can.
It’s not just games either. Online casinos collect data about their players’ activity and use it to personalize each person’s experience by recommending new games and offers. It requires the latest technology – and it’s not cheap!
Online casinos require different licenses to operate. Gambling is heavily regulated in most jurisdictions. It’s not just the cost of applying for all the right licenses, but the cost of specialist staff to make sure you apply for the right ones in the first place.
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Running a website that can handle thousands of daily users costs a lot of money. You have to buy your domains and pay for hosting. Many large casinos will operate their own servers. The bigger an online casino gets, the more expensive it is to run.
And online casinos go to great lengths to ensure that all data is completely secure. There’s a lot of money at stake, and you can’t afford to risk hackers stealing it from you—not only the financial cost, but also the reputational risk.
Online casinos are taxed twice: first, all their “sales” are subject to general gaming taxes, and then their annual profits are taxed like any other business. In the UK, for example, Flutter had to pay 21% of its gross revenue as “remote gaming duty” – and then 17.5% of its profits as corporation tax.
Online casinos do not have as many staff as traditional land-based casinos, but they still employ many people. In addition to the marketing, legal, and IT departments we’ve already touched on, they also need a large customer service department. And many online casinos actually employ dealers for “live” table games that recreate the experience of a real casino.
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Land-based casinos have many of the same costs as online casinos, but they have fewer IT-related costs and more costs associated with running a physical business.
Salaries are a major expense for land-based casinos. They need doormen, wait staff, bar staff, kitchen staff, dealers, floor managers, pit bosses, slot guards, concierges and security staff (including camera operators).
Most casinos have hotels, so they also need regular hotel staff. Although many casinos pay their employees the bare minimum, meaning they have to rely on tips from casino patrons to make a living wage, employee costs still add up.
In 2020, the state of Nevada collected $622 million in gaming taxes from the casino industry. Casinos must pay 6.75% of their gross gaming revenue (ie the amount they earn from their players) – but there is a vote in 2022 to increase this to 9.75%.
How Much Do Casino Owners Make?
This is actually quite low compared to other jurisdictions – for example Monte Carlo casinos have to pay 15% duty.
Then there is the cost of various gaming licenses and other corporate taxes.
Casinos are windowless and open 24 hours a day – so they are lit entirely by electric light.
Lighting accounts for a third of a Las Vegas casino’s energy bill. Las Vegas is a very hot place, so casinos must be air-conditioned. Of course, slot machines also require electricity.
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No wonder the casino’s electricity bills are huge. Casinos account for one-fifth of Las Vegas’ electricity use — and casinos use five times more energy per square foot than a hospital.
A casino can’t afford a power outage – it would plunge the entire property into darkness for one! So they should have a reliable backup system. It is also expensive.
Comps are something a casino gives a guest for free as a bonus for playing. What they will give you depends on how much they value you as a customer.
