As the year comes to a close, it’s essential to reflect on the year’s most significant developments in the gambling business. In 2018, the gaming business collapsed due to news events or a drastic shift in circumstances as it attempted to adjust to shifting social and economic conditions.
With much regret, Steve Wynn has decided to wind down Wynn Resorts.
Most people consider him to be the one who created contemporary Las Vegas. The current landscape of Las Vegas would look quite different if he didn’t construct such iconic hotels as the Golden Nugget, Mirage, Treasure Island, Bellagio, Wynn, and Encore. In the 1990s, Aberdeen Mirage pioneered the modern era of mega-resorts by completely reimagining the casino resort concept. Without a doubt, his departure from Wynn Resorts is a significant event.
Even if Wynn hadn’t constructed the city, the Las Vegas Strip still would have expanded during the 1990s. As a result of him being gone, Excalibur became more attractive to future hotels than Caesar’s Palace. It’s worth noting that despite the success of Circus Circus Enterprises—which saw Donald Trump’s acquisition by Caesars in 1995—the company was ultimately purchased by ITT Inc. Such pessimism played a significant role in dampening expectations for Mirage’s financial results. Even if they weren’t explicitly seeking a gaming focus, it’s likely that they would have found that it was possible to construct a luxurious, centralized hub without including gaming.
Although Wynn’s name is attached to several different enterprises, his reputation and influence in the industry are distinct from those of the companies he oversees.
Sports betting has finally arrived!
Another significant development in 2017 was the Supreme Court’s decision to overturn PASPA, legislation from 1992 that forbade states from establishing their gambling regulations. Since May, states including New Jersey, Pennsylvania, Mississippi, West Virginia, and Rhode Island have joined Delaware in permitting basic bets, although the first to do so was Delaware. Previously, it had only allowed multiplayer wagers.
It impacts betting even though it has not yet changed the total amount of money. Although West Virginia (with a population of over 1.4 million) received nearly half of Nevada’s betting revenue in October, the next month saw an increase in the percentage of revenue for Delaware, New Jersey, Mississippi, and three other states (with a combined population of 14 million). Over three million individuals call Nevada home as per the most recent census. Considering the state’s abundance of gaming opportunities, this is crucial. Sports betting contributed less than 3% of Nevada’s overall casino income in October. With roughly 5% of overall revenue in New Jersey, this could indicate several different things: It either demonstrates the potential for betting to produce more money in other markets, or it is possible to generate a higher share of revenue elsewhere. Therefore, it’s no wonder that gaming establishments and industrialists alike have invaded the sports betting sector. Though it doesn’t account for the vast majority of revenues, its growth portends well for the company’s investors.
There has been a recent uptick in the number of real estate investment trusts.
Since this is the case, REITs have played a significant role in the casino industry’s ownership structure. Real estate investment trusts (REITs) are businesses that invest in and lease commercial real estate to generate income. Examples of REITs include casinos (casino companies such as Penn National, MGM Resorts, and Caesars Entertainment). It should be no surprise that real estate investment trusts (REITs) rather than private investors make up the bulk of equity in U.S. gaming enterprises. In 2013, Penn National Gaming established Gaming and Leisure Properties Inc. as the industry’s first real estate investment firm dedicated solely to the gaming industry. Penn National has transitioned into a gaming REIT in which the newly formed GLPI owns most of the assets and rents its management back to Penn. Since then, GLPI has played a significant role in reorganising the gaming market by purchasing casino properties from competing firms.
The real estate investment trusts MGM Growth Properties, VICI, and MGM Resorts Growth Properties have separated from Caesars Entertainment Corporation and MGM Resorts International. Both exceeded projections in 2018, purchasing new properties (including those managed by predecessors, such as VICI’s Margaritaville in Bossier City, Louisiana) and distributing monthly dividends. If 2018 is any indication, real estate investment trusts (REITs) will be vital to the gambling industry for years to come.
