HOW MUCH DO CASINOS EARN PER DAY?

Most people believe that owning a casino is essentially a license to print money. Is this, however, correct? Is casino revenue truly so impressive, or are the flash and glamour hiding poor fundamentals?

Continue reading to learn the juicy details of Las Vegas income and how much casinos generate in a day.

DAILY CASINO PROFIT ON AVERAGE

The average daily profit of a casino is determined by a number of factors; they are businesses, just like any other, and some are conducted properly, while others are not. After all, casinos fail from time to time!

However, by reviewing the financial reports of some of the largest casino firms, we may obtain a sense of how much money the most famous casinos make every day.

The coronavirus pandemic is another factor. This had a big effect on brick-and-mortar casinos but not much of an effect on online casinos. We will look at the revenue from 2019 to make sure that this event doesn't change the results.

Casinos Online

The Flutter Group is the world's largest online casino operator. Among its brands are PokerStars, PaddyPower, and Betfair.

The majority of its revenue comes from sports betting: in 2019, it earned £2.14 billion ($2.95 billion), with 77% coming from sports and the other 23% coming from casino games. It made £136 million ($187 million) before taxes, which is a margin of about 6%. Online casinos create a constant profit by diversifying their offerings.

This means that Flutter made an average of £370,000 each day in 2019, which is close to $500,000. Of course, that is scattered over several different sites-but it is still very astounding considering it is exclusively from gaming.

888 is another major online gambling operator, but they focus on casino games rather than sports betting. In 2019, they produced $530 million in income, with $441 million from online casino games and $90 million from sports betting. Their annual profit in 2019 was $45.3 million, with a daily profit of $0.12 million.

Casinos on the ground

In general, land-based casinos are more profitable than online casinos. Consider some examples.

The Bellagio in Las Vegas is one of the most well-known casinos in the world. It is owned by the MGM Group, which also owns eight other casinos in Las Vegas and countless others throughout the United States and China.

According to MGM's 2019 annual report, the Bellagio achieved a $465 million pre-tax profit. That equates to a daily profit of $1.27 million.

The MGM Springfield in Massachusetts is on the other extreme of the spectrum. It made $34 million in annual profit, with an average daily profit of little under $100,000. Considering it only recently opened, it's still not bad.

Macau, China, has the most profitable land-based casinos. Consider the Venetian Macao: $1.4 billion in pre-tax earnings in 2019, or $3.85 million every day on average. The Sands Group owns the Venetian Macao, the world's second-largest casino.

So, why do brick-and-mortar casinos make more money every day than online casinos? One important reason is that land-based casinos offer other revenue streams in addition to casino games.

LAS VEGAS CASINOS' ANNUAL REVENUE

Non-gambling income accounts for a sizable portion of many Las Vegas casinos' annual revenue. Examples include:

• Accommodation

• Bars and restaurants

• Shopping Centers

• Conventions

• Entertainment activities

The annual revenues of MGM's nine Las Vegas casinos are broken down in the 2019 MGM report. Over the course of the year, they made $5.8 billion in revenue. This included $1.3 billion in casino revenue and $4.5 billion in non-casino revenue (rooms, food, drink, shopping, and entertainment). Slot machines generated $1.2 billion in revenue, while table games such as blackjack generated $800 million.

Slot machines are obviously a major business for Las Vegas casinos. In 2019, the MGM group's Las Vegas clients poured $13 billion into their slot machines, with MGM's margin falling just short of 10%. Table games (for example, roulette, baccarat, and blackjack) have a lower volume but a higher profit margin: $3 billion was spent on MGM's Las Vegas table games, with MGM getting a 22% cut.

Poker generates a very small amount of a casino's earnings while taking up a lot of room. A casino would be more successful if it replaced its poker room with slot machines. In truth, this has occurred in certain places. Most larger casinos, on the other hand, offer it because they know that poker players will spend money on other casino games, as well as on rooms and drinks.

With an occupancy rate of 91% and an annual revenue of $1.9 billion, hotel rooms are just as vital to the MGM group's bottom line as slots. Food and beverage revenues were not far behind, with $1.2 billion in revenue across MGM's nine Las Vegas hotels.

Annual income is, of course, just the amount of money that comes in before expenses are taken out. And casinos, whether land-based or online, incur significant expenses.

EXPENSES FOR ONLINE CASINO

Online casinos have lower operating costs than traditional casinos. However, this does not imply that they are inexpensive to operate! They still have a lot of expenses.

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Marketing is one of the most expensive expenses for any online casino. There is a lot of rivalry, and attracting and retaining clients is a tough challenge. In 2019, the Flutter Group spent £465 million ($640 million) on sales and marketing, accounting for 20% of total revenues of £2.14 billion ($2.95 billion).

In 2019, 888 spent $162 million on marketing, accounting for roughly one-third of total sales.

In addition to traditional advertising (on TV, in print, and online), online casinos sponsor a wide range of events and people.

Software Developers

You won't get far as an online casino if your casino software is shoddy. Customers will not tolerate it; they expect a certain level of service, and if you are unable to provide it, there are plenty of competitors who can.

You simply cannot risk one of your casino games crashing when someone is betting on it.

People also want variety; for example, 888 offers over 1000 distinct casino games.

It is not simply the games. Online casinos also collect data on their players' activities and use it to tailor each person's experience by proposing new games and deals. This necessitates cutting-edge equipment, which is not cheap!

License Fees

Online casinos require a variety of licenses to operate. In most nations, gambling is strictly regulated. Not only does it cost money to apply for all the licenses you need, but it also costs money to hire the experts you need to make sure you apply for the right ones.

Website Charges

Running a website that can handle thousands of daily visitors requires a lot of money. You must purchase domain names and pay for hosting. Many of the larger casinos will operate their own servers. The more an online casino grows, the more expensive it becomes to operate.

Online casinos must also make considerable efforts to ensure that all data is absolutely protected. There's a lot of money at stake, and you can't risk hackers stealing from you-not just financially, but also in terms of reputation.

Taxes

First, all of their "sales" are subject to general gambling taxes, and then, like any other business, their annual profit is taxed. In the United Kingdom, for example, Flutter was required to pay 21% of its gross income as "Remote Gaming Duty," followed by 17.5% of its profit as corporation tax.

Salaries

Online casinos do not have as many employees as traditional land-based casinos, but they do employ a large number of individuals. In addition to the departments of marketing, law, and IT already mentioned, they also need a large customer service department. Also, many online casinos have "live" table games with dealers who make it feel like you are in a real casino.

EXPENSES FOR A LAND-BASED CASINO

Stacks of cash and gold coins

Land-based casinos have a lot of the same costs as online casinos, but they have less IT-related costs and more costs that come with running a physical business.

Employee Pay

Payroll is a significant cost for land-based casinos. They need doormen, waiters, bartenders, kitchen staff, dealers, floor managers, pit bosses, slot attendants, concierges, and security staff (including camera operators).

Most land-based casinos also have hotels, so they require all of the typical hotel personnel. Even if many casinos pay their employees the bare minimum, forcing them to rely on gratuities from casino patrons to make a living, the staffing costs pile up.

Gaming Fees

The state of Nevada received $622 million in gaming taxes from the casino industry in 2020. Casinos are required to pay 6.75% of their gross gaming revenues (the amount they win from their customers), but there will be a referendum in 2022 to raise this to 9.75%.

This is actually quite modest when compared to other jurisdictions; for example, Monte Carlo casinos must pay a 15% charge.

On top of that, there are the costs of numerous gambling licenses and other company taxes.

Bills for utilities

Casinos are notoriously windowless and open 24 hours a day, so they are continually illuminated by electricity.

Lighting accounts for almost one-third of a casino's energy costs in Las Vegas. In addition, because Las Vegas is so hot, casinos must be air-conditioned. Of course, slot machines require electricity as well.

It's no surprise that the casino's utility expenses are so high. Casinos use up to five times as much electricity per square foot as hospitals and are responsible for one-fifth of the electricity used in Las Vegas.

A casino cannot afford a power outage because it would put the entire site in darkness! As a result, they must have a dependable backup mechanism in place. And that is costly.

Comps

Comps are when a casino gives anything to a guest for free as a thank you for playing. What they will give you is determined by how much they appreciate you as a consumer. Anyone can get free beverages, but casinos also offer free hotel rooms, airfare, entertainment tickets, and even private jet trips for high rollers.

The idea is that guests spend more on the tables than the cost of the comps, but it's still a significant investment that must be considered.

Debts Unpaid

When visiting a land-based casino, most customers pay cash for chips. But getting a marker, which is when the casino gives you a line of credit with no interest to bet with, is now easier than ever.

You fill out a form, and the casino examines your credit score to determine how much money you can borrow. Then you must repay it (usually within 30 days).

Markers were only given to high-rollers in the past, but now about 20% of casino customers use them.

These markers are unsecured, which means the casino cannot seize them if the borrowers do not pay them back. To recover the amount, casinos must write letters, hire collection agencies, or even take the debtor to court.

However, this does not always work, especially if the buyer is from another nation or borrows a large sum of money.

As the adage goes, "If you owe the bank a thousand dollars, that's your problem; if you owe the bank a million dollars, that's their problem," as the adage goes. This is especially true for casinos.

Casinos have to keep a reserve for "doubtful accounts" that are likely to not be paid back. This is a large sum of money; MGM's doubtful account allowance for 2019 was $88 million.

But don't feel sorry for the casinos. They only owe the money because the gamblers misplaced it at their tables! You can't win a lot of money on credit and expect to cash out without first repaying your initial loan.

HOW CASINOS COMPENSATE BIG WINNERS

Most casino games will only make you a huge winner if you wager a lot of money or if you are lucky for a long time.

For example, some of the best table game odds you'll discover are 36-to-1 if you correctly identify the number the ball ends at-but plainly, winning this long-shot would not improve your life unless you gamble millions of dollars.

Progressive slots are when life-changing sums are earned. These are slot machines that take a portion of each stake and deposit it into a jackpot that grows and grows until someone wins it. Because it is so difficult to win, the prize can grow to tens of millions of dollars. The largest ever jackpot was approximately $40 million.

As you might expect, the casino couldn't simply hand over $40 million in cash to the happy winner. Instead, most prizes over a certain amount (typically approximately $100,000 unless you are a high roller) are paid out via wire transfer as either a lump sum or a structured settlement in which the winner receives a fixed amount every month or year.

The benefit of a lump sum is that you get all of your money at once; the negative is that it gets taxed all at once.

The structured settlement will give you a steady income, but inflation will make your reward worth less over time. In effect, you will be giving the casino an interest-free loan. There are companies that will buy your settlement from you, but at a discount.

As you can see, whether online or in-person, casino daily earnings figures are quite outstanding. However, they are expensive to operate. After all, it takes money to earn money!