Nevada: Gambling turnover drops by a spectacular 99.4 percent
Nevada: Gambling turnover drops by a spectacular 99.4 percent
Gambling revenue in Nevada fell 99.4 percent in May 2020. Now that casinos across the state, and especially Las Vegas, have been closed for many weeks, this is not a big surprise. Most of the casinos are now open again, but this year Nevada will not recover from the gigantic drop in sales in the first half of the year. In Nevada, unlike in most European countries, there are no online casinos, so there was no way to compensate for the lost sales online. If the gambling turnover drops by 99.4 percent, it is disastrous. Nevada lives largely from gambling and that is why the US state has been hit particularly hard by the current health crisis. In May, Nevada had just $ 5.8 million in gambling revenue. The number was similarly low in the previous month, so that overall the first half of the year is a single disappointment.
Dramatic numbers for gambling in Nevada
Casino Las VegasNevada is a very special state that has relied on gambling income for decades. Nevada makes a lot of money in normal times, especially through Las Vegas. But when all the casinos in Las Vegas and the rest of the state close, there will be virtually no revenue and therefore no gambling revenue for the state. The casinos in Nevada were only allowed to reopen on June 4th. Especially the months of April and May were big losing months for Nevada. The current crisis is a huge problem for casino operators. But the state of Nevada is also facing major economic difficulties this year, because if there is no income from gambling in the state treasury, there will not be enough money to cover the usual expenses. As a result, Nevada will probably have to take on significantly more debt this year than usual. It is also to be feared that Nevada will cut many expenses this year, especially in the social area.
One or the other reader may wonder why it was still possible to make sales from gambling in Nevada when all casinos were closed. In fact, there were still some small sources of income in the gambling sector that were still available during the greatest crisis. In Nevada, for example, there is the option of placing mobile sports bets with some providers. However, sales with these mobile sports bets were very low, as there were no notable sporting events in the USA in April or May either. But one or the other sports betting fan may have bet on amateur football in Sweden or professional football in Belarus, so that at least a little turnover was possible. In addition, there are slot machines in some stores in Nevada that could also be used during the crisis. However, the gigantic decline in sales in May makes it clear that the income from these business areas is very low overall. For the future, Nevada will have to consider whether it might not be a good idea to allow online gambling on a broad front in order to be better prepared for similar crises in the future. In Europe in particular, it can be seen that many gaming providers came through the crisis much better than the casino operators in Nevada. All companies and corporations that operate not only land-based casinos but also online casinos were able to generate good income even at the height of the crisis. Some companies even recorded an increase in sales in the first half of the year.
Difficult year for Nevada and Las Vegas
Las Vegas casinos reopened a few weeks ago with a grand celebration. But meanwhile disillusionment has set in. Some casinos even had to close again. Las Vegas is far from the usual sales. The local gambling fans come to the casinos, but the many visitors from other states and other countries stay away. In principle, this will not change completely in the next few months, especially since the health crisis in the USA is far from being resolved. All Las Vegas casinos may even have to close again during the year. That would be an economic disaster for the casino operators and Nevada. It is already difficult for many casino operators to get through the year. There is no realistic chance of making up the losses from the first half of the year in the second half of the year. But even that could be cope with if the second half of 2020 were a completely normal half-year for the casinos. But Las Vegas is far from that. Although sales have increased again, the figures for the current months will in all probability show that only a manageable part of the total sales from the previous year could be achieved. In Las Vegas it can be observed very well that the casinos are not even filled on the basis of the current hygiene regulations, which allow significantly fewer visitors than usual. There is no reason to assume that this will change significantly in the near future.
What does the current situation mean for Nevada? There has been a creed in Nevada for decades: Gambling makes everyone happy. But when gambling suddenly stops generating income, citizens are no longer happy either. In the USA there is currently a lot of discussion about which conditions are allowed to open shops and receive customers. The casinos play a major role, especially in Nevada. Casinos have been hit hard in other states as well, but no state is as dependent on casino revenue as Nevada. Many large Las Vegas casinos will survive the current situation as there are sufficient financial resources. In addition, the large gambling groups in the USA are also able to take out additional loans in an emergency in order to maintain business operations until the situation returns to normal. But it will take a while before Las Vegas and Nevada are back to normal. Perhaps the basic direction of gambling in Nevada will change based on current experience. Up until now, Nevada has been very reluctant to gamble online, also so as not to affect land-based offers. But the current situation has shown that other business models may be necessary in the future, in which online gambling could play an important role.
Online casinos in Nevada coming soon?
An important consequence of the current experience could be that Nevada is fundamentally rethinking its position on online gambling. Why, unlike many other states in the USA, has Nevada not opened up the legislation to online casinos so far? So far, the major casino operators have opposed online gambling in Nevada. Basically, it is understandable that the operators of the casinos in Las Vegas would not be happy if it were suddenly possible to play online. But maybe there is a middle ground that would also have advantages for the big casino groups. In Switzerland, for example, only land-based casinos are allowed to offer online gambling. With such a regulation it would be possible in Nevada, for example, to continue the advantage of the big casinos in Las Vegas online. The question is whether this is legally feasible, but at least the idea already shows that with a little creativity it should be possible to establish online gambling in Nevada without completely offending the classic casino operators. In addition, Las Vegas has many attractions that an online casino can never offer, for example live concerts and many other entertainment offers.
Online sports betting plays a very small role in Las Vegas, but at least a manageable amount is already available. The situation with online gambling is somewhat different. Before online casinos in Nevada could be approved, a lengthy process would have to be followed. In some states it took years for politicians to agree to allow online casinos. In Nevada, however, the influence of the major casino operators is enormous. Should there be a majority in the industry in favor of offering online gambling in Nevada, it would probably be relatively easy to get the necessary political support. In the last few months it has been shown, in some bizarre ways, that politics in Las Vegas is heavily dependent on the wishes and demands of the gaming industry. It can be assumed that the big gambling corporations that have so far resisted the online casinos in Nevada may, in view of the disastrous economic record of the last few months, check again whether it might be a good idea to change the entire business model set up wider. Then it would be very unlikely in the future that gaming sales in Nevada could plummet by 99.4 percent in a crisis.