Las Vegas HCC
May 5, 2020
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Las Vegas Casinos Versus The Online Casinos Now And The Future

Author: Administrator
Gambling is defined as "to take a chance on winning" so it would seem that the players and also the operators are tightly bound together when it comes to the gambling industry. It seems strange to think of the very big companies such as Las Vegas Sands (NYSE:LVS) and MGM (NYSE:MGM) as being gamblers themselves. That the outcome of those long hours sitting in the board room may very well conclude with a toss of a coin.

I think it would be foolhardy to believe that is the case completely. As with any experienced risk taker the key is to turn the odds in your favor before you toss the coin and short of having a two headed coin all that can be done is to evaluate the current situation and predict the future, yes predict the future, glad we have that cleared up.

This is the fundamental key to being successful in business, yes you need to be able to accommodate the current market needs but that is only surviving. To be successful you have to be able to predict where your industry will be in 12 months, 5 years and 10 years.

Las Vegas has an obvious advantage straight away over other industries, in 10 years time we can all be sure that people will still want to gamble. If you make a certain household product you simply cannot be sure that it will still be needed in 10 years.

Before we predict the future lets have a recap as to where the industry is now. We have to take the industry as a whole and put together both the big Las Vegas casinos and the online casinos. This is not a popular way of looking at the gambling industry particularly in those Las Vegas boardrooms but we can only hope those boards are doing just the same for their own sake.

The world economy hit the skids in a big big way of that we can all agree but every single industry has been affected in a different way. The gambling industry has not escaped and while the number on the floor might well be down it is the expansion and development plans that were in effect before the crisis struck that have hurt the most.

The Citycenter development in Las Vegas is the largest private development currently underway in the United States and very nearly collapsed, happily it is back on track and scheduled for opening in stages soon but what happens when the doors open. Yes the novelty factor will draw the crowds but what about when the honeymoon ends?.

All the recent numbers to come out of both Las Vegas and Macau point to one thing, less gambling. The properties are surviving but this is based on vacation spending such as the shows, hotel rooms and restaurants being up. A closer look at the number shows that even Steve Wynn (NASDAQ:WYNN) who showed a small revenue increase suffered the same fate and had a drop in gaming revenue.

For the first time let us bring in the Online Casinos, yes gambling online in america is forbidden, but the first one of those boards that takes this stance and simply dismisses it will the first to fall. It simply cannot and must not be ignored as this offshore industry had estimated revenue of $5.9 billion during 2008 compared with $36.2 billion for the entire US legal gambling industry including casino, dog track and horse racing.

$5.9 billion now thats quite a figure, we have written many times about why this industry must be legalized and regulated so lets not go down that path again today, lets just treat it as it is and that is a big and fast growing challenge to the supremacy of Las Vegas.

Management in Las Vegas may well be standing on the casino floor right now asking themselves where have all our gamblers gone? The answer quite clearly is in that $5.9 billion.

There are many reasons why a gambler might choose to play online at the moment, less travel expense so more to spend on the actual gambling, fighting to keep a business afloat so less time to travel therefore making a laptop and instant connection very appealing.

There is also the extremely efficient way in which the online casinos have embraced the advances in technology and now provide gambling on just about every device you might own that connects to a network of some sort.

So where does that leave the Las Vegas Sands in 5 years? Will MGM still be a gambling giant in 10 years? For such staggeringly large companies the answer might seem harsh and it is intended to. If they do not grasp the concept of gambling online they will simply be left behind. Harrahs have appointed Mitch Garbor who was the previous CEO of Party Gaming to head up their European venture online but LVS and MGM seem to be ignoring it.

As an example there are many domain names associated with the big Las Vegas casinos that have been diligently registered by them and what do you see when you visit them? Nothing. This is a big issue as any successful website needs to have age on its side and those domain names are being wasted, it is just the same as burning $50 notes.

Yes the big companies cannot and should not operate an online gambling site under the current climate but they could be saying something, anything, just so long as they are out there. Make no mistake the online casinos have a very clear strategy in place for when the legislation changes in the United States and they will be ready to go on day one.

Will Las Vegas? As if to kick a man when he is down there has also been much talk in the industry of relocating the online casino and poker operations to Las Vegas to make the most of the talent that is there.

Not only could the big Las Vegas casinos end up losing their business to online operators they could lose their best staff as well.

As we discuss this we always arrive at the conclusion that Las Vegas sands, MGM, Wynn and the others must know this and must have a plan in place ready to go at the press of a button, as I finish up I am left hoping this is the case more than anything else.


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