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Casino Stagnation

by ivan

The carpet may be a little more garish, the machines a little fancier, and money a little easier to access from the casino floor. But basically they are still offering slots and table games. When the recession hit is 2008 many of the casinos had high debt from leveraged expansion. A few of them failed. Others shifted emphasis away from gambling to shows and hotel rooms. The casinos that had spread beyond Vegas and Atlantic City became very conservative, cutting perks and freebies. A few Indian casinos could not repay their notes when they came due, but they Over the past 22 years casinos have changed little in the so called entertainment they offer. could not be forced into bankruptcy because of Indian sovereignty. Recently the casinos discovered their clientele was aging, when surveys revealed that half the patrons of casinos were over 50. Even worse was that the millennials, raised on computer games, are uninterested in slots which is where the casinos make most of their money. The result has been rows of empty slot machines, even in Vegas. Game providers were also hurt by the recession as well, suddenly having masses of leased slots returned at the end of their contracts. With casinos risk and investment adverse and revenues declining and manufacturers with unsold product, few were willing to invest in the new need for skill based slots. Only two major casino companies, Caesars Entertainment and MGM Resorts, seem willing to invest in new skill based and multi-player slots, which have been slow to arrive. A few startups have been working on skill based machines, but it is not yet clear that the millennials will be attracted to play in the casinos. The days of massive casino expansion appear to be over, with new casinos only stealing customers from old ones. Since I believe that part of the reason for the slow recovery of our economy is due to the $50 billion commercial casino drain and the nearly $30 billion Indian casino drain on our economy the problems for the casinos is actually good news. Reduction of the regulation load, especially on small businesses and reduction of the wasted money on gambling could lead to improvement of our economy.   “Putting it all on grey,” The Economist, October 8, 2016. http://www.economist.com/news/business/21708278

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