What size casino would you own in your fantasy

The report for Fiscal Year 2012 for Nevada breaks the 265 casinos that cleared more than $1 million in gaming revenue into some groups. There is the casinos without rooms (which were surprisingly profitable), and casinos with rooms in four categories depending on how much their gaming revenue.

Over $1 million NO ROOMS, 126 casinos, average revenue $6 .4 million, average profit +$547 thousand

WITH ROOMS (grouped by annual gaming revenue)
1) Over $72 million, 40 casinos, average revenue $433 .3 million, average loss -$30.9 million
2) Over $36 million, 32 casinos, average revenue $96 .7 million,average profit +$3.2 million
3) Over $12 million, 30 casinos, average revenue $45 .1 million, average loss -$4.4 million
4) Over $1 million, 37 casinos, average revenue $10 .3 million, average loss -$443 thousand

The "over $36 million, under $72 million" category for casinos with rooms was the only one that showed a profit.

While the biggest casinos are naturally dominated by public corporations there is still some room for individual ownership (like the legendary Don Laughlin).

In your fantasy as a casino owner, would you rather be duking it out in the brutally competitive world of the big casino owernship, or the middle size one. Or would you be content to be a small casino owner with a good salary, but unknown to most people outside of the immediate area?



Review of the over $72 million casinos

	Las Vegas Strip		Boulder Strip & Henderson
	MGM Resorts Inc	24	BOULDER STATION HOTEL & CASINO
1	ARIA RESORT & CASINO	25	GREEN VALLEY RANCH STATION CASINO
2	BELLAGIO	26	SUNSET STATION HOTEL & CASINO
3	EXCALIBUR HOTEL AND CASINO	27	SAM'S TOWN HOTEL & GAMBLING HALL
4	MANDALAY BAY RESORT & CASINO	28	M RESORT SPA AND CASINO, THE
5	MGM GRAND HOTEL/CASINO		Outside City Limits of Las Vegas
6	MIRAGE, THE	29	ORLEANS HOTEL AND CASINO
7	MONTE CARLO RESORT & CASINO	30	RED ROCK CASINO RESORT SPA
8	NEW YORK - NEW YORK HOTEL & CASINO	31	SOUTH POINT HOTEL AND CASINO
9	LUXOR HOTEL AND CASINO		Inside City Limits of Las Vegas
	Ceasars Inc	->	PALACE STATION HOTEL (in City of LV)
10	CAESARS PALACE	32	GOLDEN NUGGET (in City of LV)
11	BALLY'S LAS VEGAS	33	SUNCOAST HOTEL (in City of LV)
12	FLAMINGO LAS VEGAS/O'SHEAS	34	SANTA FE STATION HOTEL (in City of LV)
13	HARRAH'S CASINO HOTEL LAS VEGAS		Laughlin
14	PARIS LAS VEGAS	35	AQUARIUS CASINO HOTEL LAUGHLIN
15	PLANET HOLLYWOOD RESORT & CASINO	36	HARRAH'S CASINO HOTEL LAUGHLIN
16	RIO SUITE HOTEL & CASINO	37	RIVERSIDE RESORT & CASINO
	Other Corporations		Reno
17	GOLD COAST HOTEL AND CASINO	38	ATLANTIS CASINO RESORT
18	COSMOPOLITAN	39	PEPPERMILL HOTEL & CASINO
19	PALMS CASINO RESORT		South Shore Lake Tahoe
20	TREASURE ISLAND	40	HARVEYS RESORT HOTEL/CASINO
21	VENETIAN CASINO RESORT		North Las Vegas
22	WYNN LAS VEGAS		zero
23	PALACE STATION HOTEL (in City of LV)	<-

I think the best kind of casinos, operator wise, would be the ones that "hide in plain sight." Convenience stores, grocery stores; the kind that people least expect to be "casinos." Get their money, one penny at a time :)

For myself I would go medium. You don't have to duke it out with the big boys and you can still look down your nose at the little guys. :}

Pacomartin,

I don't think size is the problem. In the words of Donald Trump, "It's location, location, location!" I'd rather be a small casino in a prime location than a big casino in the middle of nowhere.

With that said, I wonder what the profitability would look like if you were able to compare small vs big casinos on the strip or off the strip. I suspect downtown, you have some intense competition between smaller casinos. On the strip, the competition is really between the large casinos. Offstrip, I suspect mediocre profitability.

But to circle back to your discussion, if you have rooms, you have more overhead. You need someone to clean and maintain those rooms. You probably financed construction with a lot of debt etc. If you have just gaming, it's much lower costs overall.

yes. It seems the Convenience Store type place would be desperately unable to affect its own revenue, its either lucky or not.
The smaller casinos have expenses but also have maneuvering room whereas the ultra large places are likewise stuck with high costs.
Its the Not Quite So Large ones that seem nimble enough to gain visitors yet avoid trouble.

Quote: FleaStiff

yes. It seems the Convenience Store type place would be desperately unable to affect its own revenue, its either lucky or not.
The smaller casinos have expenses but also have maneuvering room whereas the ultra large places are likewise stuck with high costs.
Its the Not Quite So Large ones that seem nimble enough to gain visitors yet avoid trouble.

r

You would be surprised by the convenience store gambling market. I have been involved with it the last seven years and stores can definitely do things to improve their handle.

I would want a Freemont Street place, preferably Binions or Golden Nugget. As others said, big ones too many issues. Small ones too much varriance. With that kind of place you would know most of your employees and some regular customers. But with say GN you have a showroom and can be a mini-resort. If I had Binions I could reopen the coffee shop.

Paco do you have numbers for just off the strip casinos like the Tuscany and Ellis island?..

Paco... what I find interesting is that the NO ROOMS 1Million + is highly competitive, yet profitable on the average. Too bad there isn't a + or - 20Million catagory.

Quote: 98Clubs

Paco... what I find interesting is that the NO ROOMS 1Million + is highly competitive, yet profitable on the average. Too bad there isn't a + or - 20Million catagory.

Over $1 million, 126 casinos, average revenue $6 .4 million, average profit +$547 thousand NO ROOMS
Over $12m under $36m, 30 casinos, average revenue $45 .1 million, average loss -$4.4 million Average rooms=554
Over $1m under $12m, 37 casinos, average revenue $10 .3 million, average loss -$443 thousand Average rooms=138

I found that very interesting as well, especially compared with the smaller categories of casinos with rooms. It's like the standard Nevada business model doesn't work anymore. It used to be "heads in beds" and they will gamble away far more than they eat or pay for their room.

You would think that locals don't have that much money to gamble, and out of state tourists would be jaded by local gaming options and not want to stop in a roadside casino.

Of course, this is profit for the establishment. It's possible that some of these place make money on the food like any restaurant in any other state.

NOTE: These 126 licenses do not include limited licenses. Many (not all) of your grocery stores, convenience stores, Dotty's are for 15 slot machines or fewer and no table games. These are "limited licenses" .

Sorry, paco, I guess I was misunderstood a bit. I meant within the NO ROOMS catagory, a less than 20Million and over 20Million Rev catagory... I realize there might not be any further breakdown. I knew of limited liscenses from wayback allowing slots at 7-11's Mom and Pop stores, etc, but not the actual imit. Most I saw back in the 80's was maybe 8 machines.

Quote: DRich

You would be surprised by the convenience store gambling market. I have been involved with it the last seven years and stores can definitely do things to improve their handle.

Adjust the number and "mix" of machines, improve the parking lot, ... but a convenience store is just that: its convenient to a certain limited population and that is that. What more can anyone do to dragoon customers into the place?

Quote: FleaStiff

What more can anyone do to dragoon customers into the place?

comps

Quote: 98Clubs

Sorry, paco, I guess I was misunderstood a bit. I meant within the NO ROOMS catagory, a less than 20Million and over 20Million Rev catagory... I realize there might not be any further breakdown. I knew of limited liscenses from wayback allowing slots at 7-11's Mom and Pop stores, etc, but not the actual imit. Most I saw back in the 80's was maybe 8 machines.

There are over 2000 limited licenses in Clark County alone. The objection is that they have developed from a way for mom and pop to boost their income, and are now a mainstay of Albertson's Grocery Store, Smith's Food and Drug, Kmart, Dotty's and other major business's. Sometimes if the place is popular they will get an unlimited license for more than 15 machines, but they will opt not to include table games.

Other than the Vegas airport which has over 1400 machines, to the best of my knowledge the largest operation without any hotel rooms is Jerry's Nugget (600 slot machines) in North Las Vegas. I wouldn't be surprised if the airport is the only non-hotel operations that rakes in over $20 million in gaming business.

Municipalities don't really want large casinos with no hotel rooms. They usually require a minimum of 200 rooms. The ones in existence (like Jerry's) are usually very old.

To clarify, the revenue categories refer to gaming only ($1m, $12m, $36m, $72m). The profit or loss are for the entire operation (food & beverage rooms etc).