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LAS VEGAS -- Revenue from legal casino gambling worldwide will top $100 billion by the end of the decade and Nevada's casino industry will continue to trump competition from American Indian tribes and regional gambling halls, PricewaterhouseCoopers projects in a study being released today.
The report, "Pricewater-house Coopers' Global Enter-tainment and Media Outlook: 2005-2009," predicts that Nevada casinos will increase gaming revenue to $15.8 billion by 2009 from the $10.6 billion Nevada casinos earned in 2004. Advertisement
Nationwide, the accounting firm predicts, casino gambling will flourish over the next five years, with revenue topping $64.1 billion in 2009, compared with $47.3 billion in 2004.
"We don't have a crystal ball, but based on reliable resources and other statistical information, gaming revenues will continue to grow substantially," said Mary Lynn Palenik, director of development, research and analysis for PricewaterhouseCoopers' national gaming practice. "Not just in Las Vegas, but many areas will see tremendous growth in their gaming markets."
The sixth-annual edition of the outlook contains in-depth studies, analyses and forecasts of 14 major industry segments across five worldwide regions. The edition being released today contains casino gambling for the first time.
According to the study, which took into account information from traditional casinos, both riverboat casinos and dockside gambling halls, American Indian casinos and racetrack casinos (known as racinos):
Worldwide, revenue from legalized gambling will top $100.3 billion in 2009, up from $68.5 billion in 2004.
Gambling revenue earned by American Indian casinos will jump to $26 billion in 2009, up from $18.5 billion in 2004.
The Asia/Pacific region will be the world's second-largest casino market, with revenue reaching $18.5 billion by 2009, up from $8.8 billion in 2004. The booming Chinese gaming enclave of Macau will account for 86 percent of the region's growth over the next five years. And by decade's end, it will constitute about 72 percent of the region's overall revenue.
"Gaming continues to be a tremendous growth vehicle on Wall Street," Palenik said. "Las Vegas, for example, absolutely defies the market. The economic model in Las Vegas is backward. Usually demand dictates supply, but in Las Vegas the supply comes first and the demand follows."
Las Vegas will continue to fuel Nevada's gaming market. Following the opening of the $2.7 billion Wynn Las Vegas on April 28, development is expected to continue along the Strip. Several new resorts, including the Palazzo near The Venetian, Encore next to Wynn Las Vegas and MGM Mirage's Project CityCenter, are expected to open before the end of the decade.
According to the study, Nevada will benefit from an economy that will be stronger than it was from 2001 through 2003, when casinos were recovering from lost business brought about by the tourism decline associated with the terrorist attacks of Sept. 11, 2001.
Further declines in the value of the dollar, which make it less expensive for international tourists to visit the United States, will make Nevada the fastest-growing gaming sector during the next five years, the outlook said.
Atlantic City will benefit from a stronger economy, but increased competition from racinos in the Eastern states will dampen growth.
"Right now, there are only seven states with racinos, but we expect that number to increase over the next five years," Palenik said. "That will have a similar affect on Atlantic City that the Indian casinos in California have had on (gambling revenue in) Reno. Atlantic City is similar to Reno because the capital investment is on a much slower pace."
PricewaterhouseCoopers expects more state and local governments to view gaming as a way to bolster sagging tax revenue. The large gambling tax rates -- some as high as 50 percent -- are expected to disappear. Casino companies recently balked when several states, such as Louisiana and Illinois, floated proposals to increase their gambling taxes.
The company also expects the growth in Indian casinos to slow.
The prevailing thought is that Indian casinos, numbering more than 400 in 28 states, will have more capital for reinvestment that will enable them to add nongaming revenue sources, similar to Las Vegas resorts.
"People look at Nevada, especially Las Vegas, as an entertainment destination more than a gaming destination," Palenik said. "Tribal gaming is beginning to make that change."
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Study: Gambling Revenue Could Hit $100 Billion Soon is republished from CasinoVendors.com.