In 2010, Las Vegas saw the opening of the Cosmopolitan. This luxury resort was seen as the pinnacle of gambling luxury, boasting almost three thousand guest rooms, pools, retail boutiques, and, of course, the Boulevard Casino.
Land-based casinos were dominating the market, with most analysts predicting almost infinite year-on-year growth. In 2023, the landscape has changed dramatically. Some experts are ringing the alarm bells, while others are starting to pen obituaries.
It’s clear that traditional casinos do not have a monopoly on the gambling industry as they once did. And many governments are widening legislation, sometimes limiting gambling options for punters. But can we speak of a rise and fall, or is the news of the traditional casino’s death premature?
The Rise and Fall of Traditional Casinos
Online Casinos Thriving
One of the main drivers of the traditional casino’s ‘demise’ is its close cousin: online gambling operators. Instead of leaving your house and having to dress up like James Bond to play a hand of poker, you can simply load up your favourite table games from your smartphone.
With fast 4/5G connections now widely acceptable and smartphones generally affordable for most people, casinos have invested heavily to improve their games. They now match anything you can find at a land-based establishment; you can now even play in a ‘live’ environment, with dealers and hosts providing the humour and banter punters normally enjoy in person.
But this isn’t an op-ed to declare that traditional casinos are dead, far from it. Overall, the industry is going from strength to strength. In the United Kingdom, for example, participation between 2017-2019 increased by 4% compared to the immediately preceding period.
Overall, we’re seeing a mass migration to online gambling, however, which reflects societal lifestyle changes (similarly, people have also strayed away from cinemas thanks to streaming platforms). With casinos now able to offer a nearly equivalent and more convenient experience on a smartphone, it’s clear that this trend will only continue going forward.
Even games that have traditionally been seen as primarily social events, such as UK bingo halls, are also migrating online. Virtual bingo operators are seeing record sign-ups, where in contrast, physical bingo halls have been declining for several decades.
Gambling ‘Destination Cities’ Also Suffering
Even the traditional powerhouses, the top gambling cities, are starting to face a true existential crisis in the midst of the decline of the land-based casino industry.
Macau, for example, known as “the Las Vegas of the East”, experienced rapid growth and expansion in a short time period, but is now seeing the negative effects of industrial homogenization. The local government is extremely concerned, with industry experts describing the industry as going through “severe stagnation and even regression”.
For Las Vegas, analysts are also expecting an end to record-setting revenue figures. Experts predict a decline of approximately 10% in 2023, with the overall economic slowdown affecting demand for travel.
Yet despite these juggernauts not seeing the demand of previous years, the revenue figures are still very much healthy, particularly in Las Vegas. Tourists and locals alike continue to flock to these locations en masse, and to the common punter, everything looks exactly the same as ever.
However, it is clear that land-based casinos will need to reinvent what they have to offer, particularly with online alternatives threatening their hegemony. They will have to ask what ‘extras’ they can offer gamblers that an online experience cannot provide.
For example, Las Vegas is already more of an entertainment destination, rather than ‘just’ being a gambling location. Casinos have long offered headline acts like Elvis, but are now also expanding their locations to resemble a true holiday resort.
Signs of Recovery?
Despite a very negative trajectory between 2020-21, the land-based casino industry is now showing signs of a return to strength. According to the UK’s Gambling Commission’s statistics, in-person gambling actually went up between 2021 and 2022, with younger crowds in particular interested in the live casino experience.
Yet the overall trend is still downwards. But that should not mean that we should start writing an obituary for traditional casinos; they still hold a significant market share, and there are some signs that punters are once again returning to brick-and-mortar establishments.
Adapt or Perish
When it comes to the traditional casino industry, the old adage of adapt or perish holds true. Despite recent record revenue figures, it is clear that the conventional formula is no longer fit for purpose.
Online casinos have changed the game, but so too have shifting demographics, interest patterns, and technological changes. The forward-thinking establishments have already started diversifying, investing in their online operations and changing their service offerings.
Despite these seemingly glum observations, however, the gambling industry overall is still in a healthy position. Demand for iGaming is growing, eSports is a new and popular addition, and the younger generations are also interested in games of chance. However, it is clear that the traditional Las Vegas Strip experience will no longer cut it in this ever-changing market.