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Gambling and the Law: Measuring China's impact on Las Vegas

24 May 2017

Everyone in the gaming industry knows that Macau’s casinos suffered large downturns in revenue during the Mainland government’s corruption crackdown. Chinese high-rollers knew that high-stakes gambling became a risky business, far from the baccarat tables. When Beijing sneezes, Macau gets pneumonia.

But what about Las Vegas?

Macau is only one-sixth the size of Washington, D.C. Yet, in 2013, its casinos, the only legal ones in China, won more than all the casinos in the United States, combined. Almost all of that came from baccarat.

American operators with casinos in Macau actively recruit high-rollers to Las Vegas. The tax rate and fees on gross gaming revenue in Macau is more than 39%; in Nevada, less than 8%.

So, that same year, 2013, Nevada casinos won a total of $1.1 billion from blackjack, but $1.6 billion from baccarat, half a billion dollars more. And there were nine times as many blackjack tables as baccarat tables: 2,704 to only 302.

A blackjack table won $405,000 on average that year; a baccarat table $5,290,000 – 13 times as much. And the yield from baccarat was increasing.

Then came the crackdown on the Chinese Mainland.

By 2016, Nevada casinos still won $1.1 billion from blackjack. But its high-limit baccarat tables, almost all located in Las Vegas, won only $1.2 billion.

It looks like the bottom was hit months ago. Baccarat revenue is up in both Macau and Nevada.

But we can now answer the question of what impact China has on Las Vegas. Even just a slowdown in visitors costs Nevada casinos more than $400 million a year.

When Beijing sneezes, Strip casinos catch a severe cold.
I. Nelson Rose

Professor I. Nelson Rose is an internationally known scholar, public speaker and writer and is recognized as one of the world's leading authorities on gambling law. A 1979 graduate of Harvard Law School, he is a tenured full Professor at Whittier Law School in Costa Mesa, California, where he teaches one of the first law school classes on gaming law.

Professor Rose is the author of more than 300 books, articles, book chapters columns. He is best known for his internationally syndicated column, "Gambling and the Law ®," and his landmark 1986 book by the same name. His most recent book is a collection of columns and analysis, co-authored with Bob Loeb, on Blackjack and the Law.

A consultant to governments and industry, Professor Rose has testified as an expert witness in administrative, civil and criminal cases in the U.S., Australia and New Zealand, and has acted as a consultant to major law firms, international corporations, licensed casinos, players, Indian tribes, and local, state and national governments, including Arizona, California, Florida, Illinois, Michigan, New Jersey, Texas and the federal governments of Canada and the United States.

With the rising interest in gambling throughout the world, Professor Rose has spoken before such diverse groups as the F.B.I., National Conference of State Legislatures, Congress of State Lotteries of Europe, United States Conference of Mayors, and the National Academy of Sciences. He has presented scholarly papers on gambling in Nevada, New Jersey, Puerto Rico, England, Australia, Antigua, Portugal, Italy, Argentina and the Czech Republic.

He is the author of Internet Gaming Law (1st & 2nd editions), Blackjack and the Law and Gaming Law: Cases and Materials.

I. Nelson Rose Websites:

www.gamblingandthelaw.com

Books by I. Nelson Rose:

Gambling and the Law

> More Books By I. Nelson Rose

I. Nelson Rose
Professor I. Nelson Rose is an internationally known scholar, public speaker and writer and is recognized as one of the world's leading authorities on gambling law. A 1979 graduate of Harvard Law School, he is a tenured full Professor at Whittier Law School in Costa Mesa, California, where he teaches one of the first law school classes on gaming law.

Professor Rose is the author of more than 300 books, articles, book chapters columns. He is best known for his internationally syndicated column, "Gambling and the Law ®," and his landmark 1986 book by the same name. His most recent book is a collection of columns and analysis, co-authored with Bob Loeb, on Blackjack and the Law.

A consultant to governments and industry, Professor Rose has testified as an expert witness in administrative, civil and criminal cases in the U.S., Australia and New Zealand, and has acted as a consultant to major law firms, international corporations, licensed casinos, players, Indian tribes, and local, state and national governments, including Arizona, California, Florida, Illinois, Michigan, New Jersey, Texas and the federal governments of Canada and the United States.

With the rising interest in gambling throughout the world, Professor Rose has spoken before such diverse groups as the F.B.I., National Conference of State Legislatures, Congress of State Lotteries of Europe, United States Conference of Mayors, and the National Academy of Sciences. He has presented scholarly papers on gambling in Nevada, New Jersey, Puerto Rico, England, Australia, Antigua, Portugal, Italy, Argentina and the Czech Republic.

He is the author of Internet Gaming Law (1st & 2nd editions), Blackjack and the Law and Gaming Law: Cases and Materials.

I. Nelson Rose Websites:

www.gamblingandthelaw.com

Books by I. Nelson Rose:

Compulsive Gambling and the Law

> More Books By I. Nelson Rose