Las Vegas myth fixed: Strip casinos get most of their revenue from gambling
Editor's Note: Vegas Mythbusters now releases its new entries every Monday, with a bonus Friday Flashback edition. Today’s entry in our ongoing series was originally published on October 21, 2022.
The Las Vegas Strip has been the gambling center of the United States for decades. But gambling is no longer the centerpiece of the Las Vegas Strip. Over the past 30 years, casino profits have slowly shifted toward sources unrelated to gambling.
From the 1950s to the early 1990s, casinos averaged about 75 percent of their revenue from casinos. That's why so many guests used to be compensated for rooms, drinks, meals and shows -- if they attended the game. To achieve this, casinos developed the "Special Guest Card," invented by Dunes in the 1960s. Cashiers were not initially computerized and recorded card numbers with every purchase. Enough to translate into comparison.
Today, the Strip's revenue streams have reversed, with 75 percent coming from non-gambling sources. Only 23.4% of MGM Resorts Las Vegas' $2.037 billion in revenue came from gaming, according to the latest quarterly earnings reports from its three major resort companies. Only 27.6% of Caesars Las Vegas' $1.142 billion in revenue came from gaming operations, and only 24.1% of Wynn Las Vegas' $561 million in revenue came from gaming.
Therefore, unless you make a "serious" gamble, your room will no longer be available.
Wynn wins
When Frank Sinatra made his Las Vegas debut at the Desert Inn in 1951, he told the audience: “For six dollars you can have a filet mignon dinner, I can too."
Steve Wynn bought, renovated and expanded the downtown Golden Nugget hotel in the 1970s, seeing an opportunity in Las Vegas' famous kitsch. No longer bothered by cheap buffets and shows, he decided it could be more like Monte Carlo.
In 1989, he opened The Mirage to offer guests the best of everything. For dinner at his restaurant, Kokomo’s, they dined on prime steaks and seafood, surrounded by banana trees and waterfalls in the Mirage indoor rainforest.
"Wynn said a few years ago that Las Vegas doesn't need another casino, but it does need an attraction," said Michael Green, a history professor at the University of Nevada, Las Vegas. "At this time, more states and territories have legalized gambling in some form—tribal casinos and riverboat casinos are popping up, and Atlantic City is taking business away. If you want to gamble, you don't have to travel to Las Vegas Vegas, there's going to be more options for you to choose from soon. So Vegas has to compete."
The entertainment industry also follows suit
Due to Mirage's success, each resort has expanded its culinary offerings. In 1992, Wolfgang Puck opened his first restaurant outside of California, Spago, at Caesars Palace Forum Shops. Other celebrity chefs have followed suit and proven that food can work as a profit center. Wayne realized there was also talk of expansion. A year after "The Mirage" opened, he installed "Siegfried & Roy" in his $40 million theater and charged more than $100 per ticket.
This started a fundamental change in the entertainment industry," Green said. "Seeing a show now costs a normal or conventional cost — enough to show profit — and there are additional bells and whistles. Then there were the large arenas, which meant artists were less likely to stay in an exhibition space for a week, as Elvis did at the International Exposition, or as Liberace did at the opening of the Riviera in 1955 Do that. Costs and expectations have changed. "
The shift of power from millionaire casino owners (sometimes backed by the Mafia) to corporate managers linked to shareholders also contributed to the formation of the "Four Walls". Instead of casinos paying to host shows, independent producers pay to rent their showrooms. This essentially brought about what Vegas is still known for: superstar musical residencies, touring troupes of Broadway-tested productions, and the odd wonder of Cirque du Soleil.
"Gambling is still important in Las Vegas, but the city is now a dining and entertainment city," Green said.
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Source: www.casino.org
