Macau’s economy is based on tourism and gambling, much like its counterparts in the US – Las Vegas and Atlantic City. These three places, combined generate more revenue just from gambling than the total market cap of Bank of America and US Bank combined, in fact they don’t even come close.
Here, we look at the key statistics at the “terrific three” gambling hubs
Las Vegas
———
In Las Vegas has long been the world’s gambling hub. High end casinos, unparalleled service and a large variety of entertainment options have kept tourists coming back to Vegas year after year. Leading properties include casinos run by MGM Mirage Inc., Harrah’s Entertainment Inc., Las Vegas Sands Corp and the Wynn Resorts Ltd.
At close to $6.5 Billion in gambling revenues in Las Vegas alone and $12 billion total in the state of Nevada which includes the city of Reno, a smaller gambling hub, it is still arguably the world’s largets gambling location, even though Macao has exceeded Las Vegas in the last year or so as the world’s largest gambling hub.
Las Vegas overall economy, which includes revenue from tourism, gambling, entertainment and a host of other smaller businesses including conventions, revenue has been increasing 6.5% year after year and is about $110 billion now and is expected to reach $155 billion in 2012. No other location comes even close to that number.
2008, however, has been slower than usual, primarily due to the overall economic slowdown in the US due to the subprime mortgage crisis.
Atlantic City
————-
Atlantic City’s has11 casinos and has been the second biggest gambling hub in the US for several decades. Research studies however show that 2007 will be the first year for the drop in revenue, because of the tough competition in the gambling industry.
Many of the old casinos that were there in the Atlantic city have been shut down. The Trump Marina Hotel Casino had the biggest decline $11.8 million and recently Trump decided to sell this away as well. New casinos have started coming up though and it is unclear at this time what the future of Atlantic City would be.
Overall revenue casinos dropped 2.9% compared with 2006, but the decline in slots revenue was even sharper at 7.2%. The smoking ban, State imposed additional taxes, competition from casinos in neighboring states and the overall economic slowdown contributed to the slowdown. Despite these losses, Atlantic City generated $4.94 billion in gambling revenues in 2007, still a very strong number in the US. With new casinos coming up and the closure of the old loss-generating ones, Atlantic City seems to be poised for a comeback. Only time will tell.
Macau
—–
Gambling revenue in the enclave totaled 55.9 billion patacas in 2006, which includes lottery and racing revenues although the booming bulk came from casino floor.
This may exceed the 6.2$billion generated by Las Vegas strip. Gambling revenue in the enclave totaled 55.9 billion patacas ($6.95 billion) in 2006. VIPs related revenue was higher but the mass market was slightly lower.
At the end of 2006, Macau had 24 casinos operating 2,762 gaming tables and 6,546 slot machines. In the beginning of the year 2007, with the increase in the gambling revenue by 22% reaching US$ 6.95 billion, Macau would have dethroned Las Vegas to emerge as the world’s #1 gambling destination.
The success story of Macau may be due to the fact that the visitors from the nearby areas in mainland China show more interest towards gambling compared to the Americans in Las Vegas, whose people aren’t that interested in gambling in general.
Macau, the only place in China where the gambling is being made legal is within the reach of three billion people which positions it well for further growth, much better than Las Vegas and Atlantic City. It is already the world’s largest gambling center by volume and may soon become the largest by revenues as well.