Las Vegas Sportsbooks – A Dying Breed?
Las Vegas is hurting. Some may understand that, some don’t. But it’s real.
There are more than a few high-profile construction projects along the Strip which can’t be completed because the banks won’t lend any more money, and that includes the Fountainebleu, which has gone into bankruptcy and might be purchased for less than ten cents on the dollar by Carl Icahn. Some hotel rooms are being rented for less than the daily cost of their maintenance. The taxi lines at the hotels have gotten shorter and shorter; at least that’s what two or three distressed cab drivers have told me.
For this relatively New Age resort town that was not developed at the time of the Great Depression, this IS their great depression.
The sportsbooks have been feeling it for quite some time now. So far this year, gambling revenue in Las Vegas is down about 12.5% from this time last year. Sportsbook revenue has dropped about 10% from a comparable period in 2007.
According to some sportsbook managers, part of it is that the customer is betting less; that is, if they were betting, say, $400, they might now be betting $300. The high rollers in all areas of the casino; in a recent article in TIME, Steve Wynn said that “Our big players are still here, but when they get a half a million or a million dollars ahead, they quit, whereas before, they say, ‘We can play an extra three days’.”
Sportsbooks have a limited window to get their money back after losses. There is a vacuum left when pro football ends, and it does not get filled up enough with basketball, with baseball, hockey and others rather inconsequential in the big picture. Football, in fact, constitutes about 47% of the volume.
From where I sit, there are obvious reasons for this and some reasons that are not so obvious. the economy plays into it, just like it has in every area of Las Vegas life. But there is also the fact that the Nevada sportsbooks are at a natural disadvantage, since unless you are a resident of the state, you can only place a bet if you walk in off the street. That means they have to take great pains in order to deal with new competitors; not just those in other areas of the city or state, but online as well.
All anyone has to do now is to go onto the internet and open an account with a sportsbook such as BetUS.com and they can have everything available in a Las Vegas Strip sportsbook at their fingertips. Aside from the natural convenience, often there is a bigger menu of offerings and better bargains in terms of the “vigorish” paid by losing bettors, not to mention the ability to use one account to access casino, poker, racebook and sportsbook “product.”
Those Las Vegas books, which until recently have had things all to themselves, have perhaps been slow to react, and more often than not lag behind in terms of creativity. There are also regulations in the state that restrict the kind of bets they can offer, and no such restrictions exist online, so there’s the potential for loss of revenue as well as a loss in publicity opportunities.
It is the opinion here that the Las Vegas gaming establishments may have also fallen victim to their own political maneuverings. At the outset of the explosion in the online sportsbook industry, the AGA (American Gaming Association) member establishments were among the most vociferous opponents of online gaming, especially where it “encroached” on their sports betting territory.
They were dangerously short-sighted, because what they were doing was effectively cutting off a potential future revenue stream, across the board. It is quite possible; that they may have never received the go-ahead, as land-based locales, to take sports bets, as the Nevada commission, as well as federal statutes, may have gotten in their way. But that doesn’t mean they couldn’t have done it with their other offerings, effectively being able to extend the brand.
However, they kind of blew it, and even though the AGA has since softened its stance somewhat, recognizing that changes in buying habits of consumers inspired by advances in the technology were inevitable, it may be a little too late, as numerous online companies, including BetUS, have established both strong brand recognition and loyalty as well as credibility. 
To top it off, the losing days are getting more painful. On the infamous “Black Sunday,” back on October 25, underdogs emerged triumphant in only three of the 12 NFL games. Since the public likes to bet favorites, and an inordinate amount of money was bet on the favorites that day, there was a sum loss that may have exceeded eight and a half million dollars.
What I’m finding ironic is that there has been so much talk in recent years about which fights are going to “save boxing,” yet there is a prospective boxing event that can save Vegas, at least for a week or so. That’s Floyd Mayweather against Manny Pacquiao, and it has the potential to be the biggest pay-per-event, dollar-wise, in the history of the sport. Since Las Vegas is dollar-wise, if nothing else, it is badly in need of hosting that fight, as if there really is any other place for it.
Wynn, who demonstrated on a recent edition of “Fox News Sunday” that he has a deeper understanding of the economy than any government economist or politician, is ready to step up to the table and invest in it. What he’d like to do is erect a 30,000-seat outdoor arena for the fight across the street from his hotel, something that was first done, to the best of my knowledge, by Caesars Palace to accommodate the Larry Holmes-Gerry Cooney fight in 1982.
Whether that will bring this town completely back in and of itself doesn’t really matter. It’s bold. It’s creative.
And maybe it’ll keep those high rollers around for a few extra days.
