According to Forbes‘ latest report on MGM Casinos, slot games still bring in more than 60% to US casino revenues, in what can be seen as a microcosm of the US gambling market as a whole. The money coming in on slots in the Unites States has gone down over recent years as more money has been spent on the tables, in particular on baccarat which is a favourite of Chinese players.
Even so, the video slots section still brings in the majority of revenues for casinos. In Nevada as a whole, money from slots has gone down from $8.45 billion in 2007 to $6.75 billion in 2013. It now makes up 60% of revenues (down from 65% 7 years ago)- again a reflection of the growth in the tables. Also, the recession has been hitting the numbers.
Las Vegas come out the worst during the recession, and the numbers are still in the red compared to pre-recession times. One silver lining, for MGM at least, is that it has managed to move the numbers up on the win amount it takes per slot machine which, to some extent, is counter balancing the decline. This trend is estimated to continue.
MGM Resorts International (NYSE: MGM) shares are currently sitting at $22.78. Forbes has a target of $26 on them.
The hard MGM Numbers.
Revenues derived from MGM’s U.S. slot games headed south from from $2 billion in 2007 to $1.65 billion in 2010. After 2010, they have been heading up again at an annual rate of 2%, and hit $1.67 billion in 2013.
According to the Nevada Gaming Control Board, the pre-recession Las Vegas Strip average for 2007 was $215 per slot machine per day. As the global economy comes out of the recent turbulence and spending increases, this number is expected to increase further to $250.
Safe to say that after a number of years in the doldrums, the Las Vegas casinos are feeling increasingly confident – and this is at the same time as there are increasing worries about the state of Macau (read this article about famed investor James Chanos’ thought on this).
