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Casino and Casino-style Gambling - US - January 2010

The casino industry enjoyed steady growth between 2004 and 2007 but revenues remained flat thereafter. Revenues at physical US casino locations (i.e. not online) reached $64.9 billion in 2009, a 27% increase over 2004. The recession and high unemployment has caused Americans to reduce their spending, especially on non-essential activities. Although the economy is beginning to recover, growth in the casino industry is expected to remain flat or slow for the next several years.

This report addresses the following questions and provides unique insights on a variety of issues:

  • How are sales in the commercial, tribal, and racetrack casino segments projected to fare between 2009 and 2014
  • Which segments of the industry are driving growth
  • Which markets/locations show strong sales growth? Which are experiencing declines?
  • What proportion of US adults visits casinos? Who are these visitors?
  • How are the lifestyles of casino-goers unique? How can casinos more effectively serve their customers
  • How are demographic shifts impacting sales? How are they likely to affect companies in the future
  • Other than gambling, what type of entertainment are casino-goers most interested in
  • How do gaming preferences vary between race and Hispanic origin groups? Which segments tend to be the highest-value customers
  • What factors discourage consumers from going to casinos
  • What are the dominant themes in casino advertisements

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Data sources
          • Sales data
            • Consumer survey data
              • Advertising videos
                • Abbreviations and terms
                  • Abbreviations
                    • Terms
                    • Executive Summary

                      • Recession takes its toll
                        • With more options, consumers gamble closer to home
                          • Casino tax revenue is desirable, increasing sites and competition
                            • Leading commercial casinos see sales decline in 2008
                              • Marketing and advertising focuses on luxury, service and escapism
                                • Leisure options reducing penetration in decade-long trend
                                  • Going local—except at the high end
                                    • Clear opportunities for developing the market
                                      • Gambling experience limited
                                        • Loyalty membership high, loyalty low
                                          • Promotions most effective with youngest and oldest
                                            • Men, 35-54s, over-$100Ks leave casinos with highest wins/losses
                                              • Family fun may be attractive to heavy gamblers
                                                • Potential gains to be made by attracting women to tables
                                                  • Non-gambling activities driven by income, gender
                                                    • Acculturation significant in casino usage among Hispanics
                                                    • Insights and Opportunities

                                                      • Adults online aged 25-34: Important today, critical for future growth
                                                        • Gaming without wagering
                                                          • Online gambling as an educational and promotional tool
                                                            • More and more tournaments—for everyone and for all types of gambling
                                                              • Expand through video gaming terminals
                                                                • Hispanic market beckons
                                                                • Inspire Insights

                                                                    • Introduction
                                                                      • Trend: That's (Home) Entertainment!
                                                                        • What we've seen
                                                                          • What to do about it: if you can’t beat ‘em join ‘em
                                                                            • Tech Trend Focus: Augmented Reality and Tracking our Location
                                                                              • Tech Bohemia and Nouveau Kitsch
                                                                                • But we want the guests to gamble, right?
                                                                                  • Unique activities for teens and tweens
                                                                                  • Market Size and Forecast

                                                                                    • Key points
                                                                                      • Growth halts in 2007; revenues remain flat
                                                                                        • Consumers curtail spending on gambling
                                                                                          • Recovery to pre-recessionary levels will be slow
                                                                                            • Figure 1: Total U.S. gambling revenues, at current prices, 2004-14
                                                                                            • Figure 2: Total U.S. gambling revenues, at inflation-adjusted prices, 2004-14
                                                                                        • Competitive Context

                                                                                          • Key points
                                                                                            • States’ desire for tax revenues leads to increased competition
                                                                                              • Figure 3: Casino and racino tax paid to state and local governments, FY 2008 and FY 2009
                                                                                            • Despite illegality, 12% of adults played gambling games online
                                                                                              • Figure 4: Incidence and frequency of online gambling, by gender, November 2009
                                                                                            • Online gambling to remain illegal
                                                                                            • Segment Performance

                                                                                              • Key points
                                                                                                • Largest commercial casino markets are losing revenue
                                                                                                  • Tribal casinos and racinos expanding locations
                                                                                                    • Figure 5: Number of U.S. locations for commercial, tribal, and racetrack casinos, 2006-08
                                                                                                    • Figure 6: U.S. casino revenue, segmented by facility type, 2007 and 2009
                                                                                                • Segment Performance—Commercial Casinos

                                                                                                  • Key points
                                                                                                    • What happens in Vegas, does not stay there
                                                                                                      • Declines in penetration and increased competition pressure revenues
                                                                                                        • Figure 7: Total U.S. gambling revenues at commercial casinos, 2004-14
                                                                                                    • Segment Performance—Tribal Casinos

                                                                                                      • Key points
                                                                                                        • Revenue from tribal casinos outpaces the overall casino market
                                                                                                          • Expansion mitigates recession’s impact
                                                                                                            • Figure 8: Total U.S. gambling revenues at tribal casinos, 2004-14
                                                                                                        • Segment Performance—Racetrack Casinos (Racinos)

                                                                                                          • Key points
                                                                                                            • Smallest segment, impressive growth
                                                                                                              • Growth driven by legalization of racetrack casinos
                                                                                                                • Figure 9: Racino legalization, opening date and format, 1992-2008
                                                                                                                • Figure 10: Total U.S gambling revenues at racetrack casinos, 2004-14
                                                                                                            • Geographic Distribution

                                                                                                              • Key points
                                                                                                                • Geographic locations
                                                                                                                  • Figure 11: States that participate in casino gambling, 2009
                                                                                                                • Nevada and New Jersey remain the largest markets for commercial casinos
                                                                                                                  • Figure 12: Consumer spending on commercial casino gaming, by state, 2007-09
                                                                                                                • Most markets show significant revenue declines
                                                                                                                  • Figure 13: Top 20 U.S. casino markets, by revenue, 2006-08
                                                                                                                • Pennsylvania tops in racetrack casinos
                                                                                                                  • Figure 14: Top 13 U.S. racetrack casino markets, by revenue, 2006-08
                                                                                                              • Market Drivers

                                                                                                                • Key points
                                                                                                                  • When the economy sours, so do gambling revenues
                                                                                                                    • Figure 15: Congressional budget office economic projections for calendar years 2009-11
                                                                                                                  • Households with $100K+ on the rise and more likely to visit casinos
                                                                                                                    • Figure 16: Number of households in quintile household income brackets, 2005 and 2008
                                                                                                                  • Americans saving more
                                                                                                                    • Figure 17: Income, savings and savings rate, Q3 2007-Q3 2009
                                                                                                                • Leading Commercial Casinos

                                                                                                                  • Key points
                                                                                                                    • Sales lag for leading operators
                                                                                                                      • Figure 18: Revenue for selected U.S. commercial casino operators*, 2007 and 2008
                                                                                                                    • Harrah’s Entertainment Inc.
                                                                                                                      • MGM Mirage
                                                                                                                        • Ameristar Casinos
                                                                                                                          • Wynn Resorts
                                                                                                                            • Pinnacle Entertainment
                                                                                                                              • Las Vegas Sands
                                                                                                                              • Brand Qualities

                                                                                                                                • Introduction
                                                                                                                                  • Wynn Resorts
                                                                                                                                    • Borgata Hotel, Casino & Spa, Atlantic City
                                                                                                                                      • Lumière Place Casino & Hotel
                                                                                                                                        • Trump Entertainment Resorts
                                                                                                                                          • Foxwoods Resort & Casino
                                                                                                                                          • Innovation and Innovators

                                                                                                                                            • Portable sports betting
                                                                                                                                              • Easy weekend access for players
                                                                                                                                                • Guides to games
                                                                                                                                                  • Sports “stadium” far more lavish than home entertainment can provide
                                                                                                                                                  • Advertising and Promotion

                                                                                                                                                    • Key points
                                                                                                                                                      • Overall ad expenditures rose among top brands in 2008
                                                                                                                                                        • Figure 19: Media expenditures of leading casino hotel brands, 2007 and 2008
                                                                                                                                                      • Loyalty cards and comps anchor in-house marketing efforts
                                                                                                                                                        • Web marketing
                                                                                                                                                          • Luxury, escape, and winnings
                                                                                                                                                            • Luxury accommodations and gaming, together
                                                                                                                                                              • Figure 20: Chukchansi Gold Resort & Casino, July 2009
                                                                                                                                                              • Figure 21: Golden Nugget Casino, September 2009
                                                                                                                                                            • Escapism
                                                                                                                                                              • Figure 22: Morongo Casino Resort & Spa, October 2009
                                                                                                                                                              • Figure 23: Diamond Jack’s Casino, December 2009
                                                                                                                                                            • You can win here
                                                                                                                                                              • Figure 24: Station Casinos, December 2009
                                                                                                                                                              • Figure 25: Motor City Casino Hotel, July 2009
                                                                                                                                                          • Casino Visits: Penetration, Frequency, and Location

                                                                                                                                                            • Key points
                                                                                                                                                              • Fewer adults see the appeal of casinos
                                                                                                                                                                • Figure 26: Visited a casino in the past year and frequency of visits, 2000/01-2008/09
                                                                                                                                                                • Figure 27: Type/location of casino visited, by geographic region, 2002/03-2008/09
                                                                                                                                                              • Affluence impacts visits to Vegas and Atlantic City
                                                                                                                                                                • Figure 28: Incidence and frequency of casino visits and location of casinos visited, by household income, April 2008-June 2009
                                                                                                                                                              • Striking differences seen in frequency of visits in online pool by household income
                                                                                                                                                                • Figure 29: Trips to casinos and racinos, by household income, November 2009
                                                                                                                                                              • Adults gamble relatively close to home
                                                                                                                                                                • Figure 30: Incidence and frequency of visits, and location visited, by geographic region, April 2008-June 2009
                                                                                                                                                              • Participation higher among online respondents
                                                                                                                                                                • Aversion to gambling accounts for only one in six respondents
                                                                                                                                                                  • Figure 31: Visits to casinos and non-gamblers, by gender, November 2009
                                                                                                                                                                  • Figure 32: Visits to casino in past year, by age, November 2009
                                                                                                                                                                • Online respondents visit three times as often as offline pool
                                                                                                                                                                  • Figure 33: Trips to casino hotels, casinos, racinos, and online casinos, by gender, November 2009
                                                                                                                                                                • Frequency of visits by age: seniors lead offline, 25-34s lead online
                                                                                                                                                                  • Figure 34: Incidence and frequency of casino visits, by type/location, by age, April 2008-June 2009
                                                                                                                                                                  • Figure 35: Trips to gambling outlets, by type of facility, by age, November 2009
                                                                                                                                                              • Amount Won/Lost on Most Recent Trip

                                                                                                                                                                • Key points
                                                                                                                                                                  • Men wager three and a half times more than women
                                                                                                                                                                    • 35-54s wager the most; yet 21-34s make the most visits
                                                                                                                                                                      • Highest-income households wager the most
                                                                                                                                                                        • Figure 36: Total amount won/lost on last gambling visit, by gender, age and household income, November 2009
                                                                                                                                                                    • Developing the Market

                                                                                                                                                                      • Key points
                                                                                                                                                                        • More opportunities via tournaments, education and environment
                                                                                                                                                                          • Figure 37: Opportunities to develop the market, by gender, November 2009
                                                                                                                                                                          • Figure 38: Opportunities to develop the market, by age, November 2009
                                                                                                                                                                      • Gambling Experience

                                                                                                                                                                        • Key points
                                                                                                                                                                          • Most adults are not regular gamblers, even casually
                                                                                                                                                                            • Figure 39: Knowledge of games and participation outside of the casino, by gender, November 2009
                                                                                                                                                                          • Young adults online more knowledgeable, more active outside casinos
                                                                                                                                                                            • Figure 40: Knowledge of games and participation outside of the casino, by age, November 2009
                                                                                                                                                                          • Affluent more knowledgeable about games, more likely to gamble outside casino
                                                                                                                                                                            • Figure 41: Knowledge of games and participation outside of the casino, by household income, November 2009
                                                                                                                                                                        • Impact of Loyalty Programs and Promotions

                                                                                                                                                                          • Key points
                                                                                                                                                                            • About half of gamblers have a loyalty card
                                                                                                                                                                              • Promotional offers not prerequisites for vast majority
                                                                                                                                                                                • Figure 42: Gambling participation, by age, November 2009
                                                                                                                                                                            • Gambling Behavior

                                                                                                                                                                              • Gambling is entertainment for most
                                                                                                                                                                                • Figure 43: Attitudes toward gambling, by gender, November 2009
                                                                                                                                                                              • Young adults less likely to set a budget; more likely to expect to win
                                                                                                                                                                                • Figure 44: Attitudes toward gambling, by age, November 2009
                                                                                                                                                                            • Gaming Preferences

                                                                                                                                                                              • Key points
                                                                                                                                                                                • Slots, blackjack and video poker are the most popular games
                                                                                                                                                                                  • Figure 45: Games usually played at the casino, by gender, November 2009
                                                                                                                                                                                • Young adults more likely to bet on sports and table games
                                                                                                                                                                                  • Figure 46: Games usually played at the casino, by age, November 2009
                                                                                                                                                                              • Non-Gaming Activity at Casinos

                                                                                                                                                                                • Key points
                                                                                                                                                                                  • Fewer than one in three engage in activities besides eating, gambling
                                                                                                                                                                                      • Figure 47: Non-gaming casino activity participation, by gender, November 2009
                                                                                                                                                                                    • 25-54s more keen on non-gaming activities
                                                                                                                                                                                      • Figure 48: Non-gaming casino activity participation, by age, November 2009
                                                                                                                                                                                    • Broader packages for the well heeled
                                                                                                                                                                                      • Figure 49: Non-gaming casino activity participation, by household income, November 2009
                                                                                                                                                                                  • Choice of Accommodation

                                                                                                                                                                                    • Promotional offers and past experience significant factors
                                                                                                                                                                                      • Figure 50: Important attributes when selecting a hotel for overnight trip to a casino, by gender, November 2009
                                                                                                                                                                                    • One in four gamble only at a single location
                                                                                                                                                                                      • Figure 51: Single casino gambling while away from home, by gender, November 2009
                                                                                                                                                                                  • Race and Hispanic Origin

                                                                                                                                                                                    • Key points
                                                                                                                                                                                      • Casino visits
                                                                                                                                                                                        • Figure 52: Incidence, frequency, and location of casino visits, by race/Hispanic origin, April 2008-June 2009
                                                                                                                                                                                      • The role of acculturation and language in Hispanic participation
                                                                                                                                                                                        • Figure 53: Incidence and frequency of casino visits among Hispanics, by language spoken at home, April 2008-June 2009
                                                                                                                                                                                      • Developing the market
                                                                                                                                                                                        • Figure 54: Opportunities to develop the market, by race/Hispanic origin, November 2009
                                                                                                                                                                                      • Gambling experience
                                                                                                                                                                                        • Figure 55: Gambling experience, by race/Hispanic origin, November 2009
                                                                                                                                                                                      • Impact of loyalty and promotional activities
                                                                                                                                                                                        • Figure 56: Use of loyalty cards and promotions, by race/Hispanic origin, November 2009
                                                                                                                                                                                      • Blacks looking to win, gambling the largest amounts
                                                                                                                                                                                        • Figure 57: Casino visit attitudes, by race/Hispanic origin, November 2009
                                                                                                                                                                                        • Figure 58: Games usually played at the casino, by race/Hispanic origin, November 2009
                                                                                                                                                                                      • Non-gaming activity at casinos
                                                                                                                                                                                        • Figure 59: Non-gaming activities participated in at the casino, by race/Hispanic origin, November 2009
                                                                                                                                                                                    • Cluster Analysis

                                                                                                                                                                                        • High Rollers
                                                                                                                                                                                          • Old Dogs
                                                                                                                                                                                            • The Well Rounded
                                                                                                                                                                                              • Characteristic tables
                                                                                                                                                                                                • Figure 60: Casino gambling clusters, November 2009
                                                                                                                                                                                                • Figure 61: Frequency of visitation, by casino gambling clusters, November 2009
                                                                                                                                                                                                • Figure 62: Opportunities to develop the market, by casino gambling clusters, November 2009
                                                                                                                                                                                                • Figure 63: Gambling behavior and attitudes, by casino gambling clusters, November 2009
                                                                                                                                                                                                • Figure 64: Amount won/lost on most recent trip, by casino gambling clusters, November 2009
                                                                                                                                                                                                • Figure 65: Games played, by casino gambling clusters, November 2009
                                                                                                                                                                                                • Figure 66: Activity participation, by casino gambling clusters, November 2009
                                                                                                                                                                                              • Demographic tables:
                                                                                                                                                                                                • Figure 67: Casino gambling clusters, by gender, November 2009
                                                                                                                                                                                                • Figure 68: Casino gambling clusters, by age, November 2009
                                                                                                                                                                                                • Figure 69: Casino gambling clusters, by household income, November 2009
                                                                                                                                                                                                • Figure 70: Casino gambling clusters, by race, November 2009
                                                                                                                                                                                                • Figure 71: Casino gambling clusters, by Hispanic origin, November 2009
                                                                                                                                                                                              • Cluster methodology
                                                                                                                                                                                              • Custom Consumer Groups

                                                                                                                                                                                                  • Casino visits
                                                                                                                                                                                                      • Figure 72: Trips to gambling outlets among 21-34s, by type of facility, by race/Hispanic origin, November 2009
                                                                                                                                                                                                    • Developing the market
                                                                                                                                                                                                        • Figure 73: Opportunities to develop the market among 21-34s, by race/Hispanic origin, November 2009
                                                                                                                                                                                                      • Gambling experience
                                                                                                                                                                                                        • Figure 74: Gambling participation among 21-34s, by race/Hispanic origin, November 2009
                                                                                                                                                                                                    • Appendix: Other Useful Consumer Tables

                                                                                                                                                                                                        • Figure 75: Opportunities to develop the market, by household income, November 2009
                                                                                                                                                                                                        • Figure 76: Loyalty program and promotional offer participation, by household income, November 2009
                                                                                                                                                                                                        • Figure 77: Attitudes toward gambling at casinos, by household income, November 2009
                                                                                                                                                                                                        • Figure 78: Games played at the casino, by household income, November 2009
                                                                                                                                                                                                      • Lower income online groups less likely to visit a casino
                                                                                                                                                                                                        • Figure 79: Visits to casinos and non-gamblers, by household income, November 2009
                                                                                                                                                                                                    • Appendix: Trade Associations

                                                                                                                                                                                                      Companies Covered

                                                                                                                                                                                                      • Amateur Poker League
                                                                                                                                                                                                      • American Gaming Association
                                                                                                                                                                                                      • Boyd Gaming Corporation
                                                                                                                                                                                                      • Bureau of Economic Analysis
                                                                                                                                                                                                      • Casino Gaming Institute Inc.
                                                                                                                                                                                                      • Foxwoods Resort Casino
                                                                                                                                                                                                      • Gaming Standards Association
                                                                                                                                                                                                      • Greenfield Online
                                                                                                                                                                                                      • International Association of Gaming Regulators
                                                                                                                                                                                                      • National Indian Gaming Association
                                                                                                                                                                                                      • National Indian Gaming Commission
                                                                                                                                                                                                      • North American Gaming Regulators Association
                                                                                                                                                                                                      • Pinnacle Entertainment Inc.
                                                                                                                                                                                                      • The Bureau of Transportation Statistics
                                                                                                                                                                                                      • U.S. Bureau of Labor Statistics
                                                                                                                                                                                                      • Wynn Resorts Limited

                                                                                                                                                                                                      Casino and Casino-style Gambling - US - January 2010

                                                                                                                                                                                                      £3,199.84 (Excl.Tax)