Nevada Gaming Revenue Hits a Record $13.04 Billion in 2021

The gambling and betting industry was one of the most affected after the Covid-19 outbreak, especially after ordered venue closures due to social distancing restrictions. However, after a gloomy 2020 where a 78-day shutdown led to revenues plummeting to about $7.87 billion, Nevada has bounced back with a new personal best of $13.4 billion in 2021.

Earlier assessments by gaming analysts had predicted that it would take at least three of four years for Nevada, particularly the Las Vegas Strip, to recover from the economic blow. But, as it turns out, the eventual reopening of showrooms and attractions in the silver state would change what had appeared to be the state’s impending fate. The turnaround for Nevada began in March 2021 when the state started its billion-dollar streak, which the state maintained all through to December. According to the Nevada Gaming Control Board, the figure is a new record high in Nevada history. It exceeds pre-pandemic revenues in 2019 by 11.6% and even breaks the previous record of $12.8 billion in 2007.

Senior Economic Research Analyst at the Nevada Gaming Control Board Michael Lawton reported that all 18 gambling markets in Nevada saw a rise in income, with 11 collecting more than they had in previous years. He attributed the start of the billion-dollar streak to the increase in vaccine rollout, saying:

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 “The reasons for the record level of gaming win recorded this calendar year began with the successful rollout of vaccines, which eliminated capacity restrictions on the gaming floor. This demand was being driven by healthy consumer savings as the result of stimulus payments and the sustained rebound of leisure travel.”

Lawton also added that the spike in gaming performance may have resulted from other entertainment activities in Sin City and the wider Nevada state, such as the ‘return of special events.’ These include concerts, live entertainment in showrooms, and football games.

The Start of a Recovery Period for The Silver State

Although the state received the highest pretax revenue ever, there is still room for improvement as the travel industry is yet to reach pre-pandemic visitor numbers. For example, Harry Reid (formerly McCarran) International Airport reported 39.7 million passengers that came through the airport in 2021, a significant increase from about 22 million in 2020. However, this is still 24% lower than in 2019.

Nevertheless, Clark County director of aviation Rosemary Vassiliadis has expressed optimism from the 2021 figures, stating that the year has shown that Las Vegas is still strong. She thanked all those who made a point of visiting during the year and added that “2021 was a dress rehearsal for what LAS and the community can expect”.

After the easing of restrictions, the reopening of international travel brought in guests from Canada, the UK, the Netherlands, and Panama. Mexico was also a major contributor to international travel, bringing in 66% of The Silver State’s international visitors. More routes are expected to open in 2022, which would, in turn, have a positive effect on the Nevada gaming revenue.

Brendan Bussmann, director of government affairs at Global Market Advisors, reported that the year was a success, although there was still room for more recovery. He said:

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“It was a great year for the gaming industry. It shows the resiliency of the industry to be able to bounce back from one of its worst years seen over the course of time. Last year also shows that Nevada’s number one industry survived and thrived along the way. We’re not in full recovery. If you look at the numbers, on their surface, it looks like we’re more than back from the pandemic low because of the growth and the record year, but you have several segments—like business and international travel—that still aren’t back.”

Most of the gaming revenue (about $9.2 billion) was generated from slot machines, which comes as no surprise given that it’s the #1 choice for casino goers. Slot machines, which have always been considered to be Nevada’s cash cow, brought in 16.4% more revenue compared to the earlier record high seen in 2019. Slot machines were then followed by sports betting, which collected $445.1 million in profit from a historic $8.1 billion annual handle last year. Previously the best-ever performance was in the 2018 calendar year when the state racked up $321 million worth of revenue from a $5.1 billion handle. Further mobile sports betting accounted for 64.6% of the entire sports betting win, higher than the 57.1% portion seen in the 2020 calendar year.

Roulette rounded up the top three revenue generators in the gaming sector after winning proceeds worth $428 million. Like slot machines and sports betting, roulette’s performance hit new record highs in revenue collection.

Welcome to the Post-Pandemic Future

When the pandemic hit at the beginning of 2020, major casino operators had to downsize, throwing the state into a frenzy with great losses to casinos. The effects were felt more strongly in the hospitality sector than in the casino floors. But then again, despite the strong resurgence, there is still a lot more room for improvement as not all industry players have reported success.

Wynn Las Vegas, for instance, has seen a 24% nosedive in their market cap following recent changes in the Macau licensing laws where the operator has invested heavily. Las Vegas Sands has also had a 37% drop in stock price and has since sold its Vegas properties.

Macquarie Securities, which rated MGM quite highly, has reported that they will hold off on their Las Vegas Sands verdict as they are observing how the company performs in China. Still, the firm’s gaming analyst was confident that with Las Vegas hotel searches going up in recent months, investors could be assured that the inbound traffic to Las Vegas will not be slowing down soon.

The financial services group told investors in a research note:

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“Our monthly survey points to continued strength for (online) hotel searches into Las Vegas. Overall, ‘searches’ were up 17 percent in October after increasing 21 percent in September. We believe searches are at all-time highs, which bodes well for the remainder of 2021.”

The Las Vegas Strip alone accounts for 85% of the revenue for the 2021 fiscal year.