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Las Vegas has the jitters as casino revenues fall The summer hasn’t been all it’s cracked up to be for Las Vegas as, to quote Forbes magazine, “the summer has turned into a bit of a bummer”, with declining visitor numbers and falling revenues. The reasons are myriad, complex and difficult to pinpoint but the facts remain the same, both MGM Resorts International and Caesars Entertainment, two Las Vegas giants, reported second quarter earnings well below analysts’ expectations. MGM even went as far as to issue a warning for the third quarter that sent its stock plummeting in a 24% nose dive, despite the announcement of an exclusive deal with the NBA to offer sport betting at its properties nationwide after the U.S. Supreme Court open the door to legalized sports betting across the country earlier this year that will give MGM a significant lead in a nascent sports betting market estimated to be worth upwards of $150 billion. Falling room revenue and convention numbers Las Vegas casino operators across the board reported a notable decline in RevPaR (revenue per available room) the benchmark standard to measure market strength. RevPAR on the Las Vegas Strip was down a solid 4% with occupancy and visitor numbers also down 1% through the end of the second quarter in June. Convention attendance was a further cause for concern, down 3% year on year for the second quarter. The fall in convention visitor numbers is of particular concern for two reasons. First, convention goers, while not necessarily major contributors to gambling revenue, do comprise a significant portion of Las Vegas casinos non-gambling revenue, which stands at around 50% of total Sin City revenues, spending more on rooms and dining than the typical Las Vegas visitor.
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