The Nevada gambling industry has done it yet again. This time around, it managed to beat its previous annual record by reaching the milestone of $14.84bn in gambling revenue for 2022 (in 2021, the numbers stood at $13.4bn).
Before we delve into the specifics of this groundbreaking year, a few words about Nevada’s gambling scene are in order.
First Time Gambling in Nevada?
In general, Nevada gambling laws are on the permissive side (certain restrictions apply). You are free to participate in casinos, bet on sports events, and other gambling activities, whether it be online or at various brick & mortar establishments. For more information regarding offline and online gambling in Nevada, you can avail yourself to this guide. It’s an in-depth Nevada gambling guide that covers the topic beyond the basics we’ve summarized for you.
A Record-breaking Success in the Face of Negative Predictions
In 2022, the Silver State saw an impressive 22-month streak of generating over $1bn in revenue, leading to a profitable year. However, analysts predict a downturn for Nevada in 2023. Despite this forecast, Las Vegas has proven to be a resilient player in the gaming industry, with casinos across the state raking in a record-breaking $14.8bn in gambling revenue for 2022, as reported by the Nevada Gaming Control Board.
This marks a 10.5% increase from the previous year’s record of $13.4bn. Despite a pandemic-induced recession that swept across everything except tech and crypto, the gaming industry in Nevada has made a comeback, displaying its strength with 22 consecutive months of generating over $1bn in monthly revenue.
A Steady Demand for Gambling With the Willpower To Surpass All Obstacles
Michael Lawton, the senior economic analyst at the Nevada Gaming Control Board, acknowledges that the record-breaking year was not a surprise, as they had anticipated setting a record for a couple of months. This achievement is a testament to the strength and resilience of Nevada’s gaming-tourism industry that’s known to attract high spenders.
Although Nevada had already surpassed the previous year’s record by November 2022, December proved to be another record-breaking month, with casinos reporting $1.3bn in revenue. According to Lawton, December exceeded expectations, with the Las Vegas Strip alone breaking its all-time monthly record with $814m, a 25% increase compared to December 2021.
Nevada’s record-breaking year was driven by several factors, including a packed events calendar and the lingering effects of pandemic stimulus checks, which helped to draw tourists to Las Vegas. However, the strongest factor was the “steady demand” for gambling, driven by resilient customers who consistently chose to visit Vegas despite inflation, recession fears, and rising fuel prices.
A Look at the Major Breadwinners
The Las Vegas Convention and Visitors Authority reported that 38.8 million people visited the city in 2022, a 20.5% increase from 2021. However, compared to 2019, visitor numbers are still down by almost 9%. Last year, the Las Vegas Strip led the state in revenue, generating $8.28bn, a 17% increase from $7.96bn in 2021.
Slot machines, which are the casino’s primary source of revenue, generated $10bn in revenue last year across Nevada, making up 67.4% of the total gaming revenue. Penny slots alone generated $3.59bn, contributing 9.8% of the total slot revenue. Meanwhile, table games set an annual revenue record for the category, with $4.83bn, a 15.3% increase from 2021.
In 2022, sportsbooks in Nevada generated $446.7m in revenue from $8.7bn in wagers, breaking the previous year’s record of $445.1m in revenue from $8.1bn in wagers. Baccarat experienced a significant surge last year, with $1.18bn in revenue, a 25.4% increase over 2021.
Blackjack brought in $1.29bn, a 14.4% increase over 2021, craps saw $447.2m in revenue, a 9.7% increase, and roulette set an all-time record with $456m in revenue.
Is the Success Going To Be Sustainable in the Future?
Despite the state’s success, Fitch Ratings predicts that Nevada’s gambling revenue growth will not continue indefinitely. In a memo published in January, the credit rating agency forecasts a “demand pullback” in the gaming industry after last year’s “exceptionally strong performance,” with gambling revenues in Las Vegas projected to drop by 10% in 2023 due to the broader economic slowdown.
Brendan Bussmann, an expert in gaming and hospitality consulting, has a more optimistic view of the future of Las Vegas. Bussmann points out that business travel and conventions have not yet recovered to pre-pandemic levels, which means there is still room for growth. Although convention attendance increased by 126% in 2022 compared to 2021, it still remains below the numbers seen in 2019.
Although conventions have not yet recovered to pre-pandemic levels, the fact that attendance was up 126% last year compared to 2021 suggests that there is still some upside potential that has yet to be realized. And even if there is a downturn in 2023, it would have to be severe to knock Nevada below pre-pandemic levels given the double-digit gains seen over the past year. While the future is uncertain, the gaming industry in Las Vegas has shown remarkable resilience and could continue to thrive in the years to come.
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