Will the Casinos Loosen up When the Next Recession Hits?

As has always been the case in boom or bust Las Vegas a recession will eventually happen. When it does, do you think it will loosen up the gambling or will the casinos just get tighter then ever?

It's said that when the economy sneezes, Las Vegas catches a cold; in other words, like the canary in the coal mine, such one-dimensional resort destinations as southern Nevada get hit hard and first. Thus it follows that when the economy goes south, the prices in Las Vegas come down to attract money.

At least that's the way it's been since, well, forever.

And it's why in the past, during and after recessions, casino companies pulled out not all, but certainly a lot of stops to bring in as much business as they could, even if it meant slashing prices across the board and offering tempting loss leaders to get the bargain seekers, at least, through the doors.

But we suspect that it could be different this time around, if a recession is indeed in the offing. Since the pandemic, we've seen a new paradigm developing and as we look into our (admittedly cloudy) crystal ball, we don't see the casinos playing that same game.

For one, Vegas has gone decidedly upscale. That's no secret and the numbers definitely bear it out. Even with interest rates high and some uncertainty on the economic horizon, visitors continue to show up in record numbers, pay record prices, and gamble with much bigger bankrolls.

One example: According to the Las Vegas Convention of Visitor Authority's annual Visitor Profile Survey, the gambling bankroll of the average visitor in 2019 was $591. This year so far, it's more like $900. Another: Households with income of $100,000 and above made up 29% of the visitors in 2019, rose to 33% in the third quarter of 2022, and constituted 44% in Q3 '23. Meanwhile, households earning less than $40,000 made up 16% of visitors in 2019, falling to 6% in this past third quarter.

The significance is that people with more money are showing up and paying the higher freight, while people with less money have already abandoned Vegas to go to other destinations where their dollars stretch further, or just to stay home. And that's not only okay with the casinos, it's their preference. They've made it abundantly clear that they no longer want low rollers; that's not their market anymore. Which is why we say it's possible, even probable, that the casinos will do everything in their power to hold the price-point line during the next recession.

Furthermore, recessions tend not to hit high-net-worth individuals anywhere nearly as hard as the rest of us, so with the evolving demographic of visitors bringing much more disposable income, if the casinos are at all worried about a downturn, they're not whispering a word of it yet. In fact, they continue, quarter after quarter after quarter, to brag about their record profits.

In the meantime, in the spirit of never letting a good crisis (recession) go to waste, the casinos will, as they did during the pandemic, slash expenses, especially labor, but also anywhere they can get away with shrinkflation in terms of both products and services. They're looking to do just that already, no doubt, to make up for the record pay raises they just agreed to in the new five-year contracts with the union. They've gotten away with it since COVID, so they'll certainly try again the next time the opportunity presents itself.

Nor will we be surprised to see new hidden fees appearing here and there.

In our minds, the last thing they'll do is go back to the mass market. It's long been known that one whale is the revenue equivalent of thousands of low rollers. And it's the same in the casino as out -- in the hotel rooms and restaurants and showrooms and spas and clubs. The casinos are locked onto the deep pockets now and a little thing like a recession, which typically runs its course in 18-24 months, won't change the new paradigm, at least in our humble opinion.

Now, if we had to hedge our bets, we'd say that if it's a particularly tough or long-lasting recession, perhaps 24 months or more, some casinos would be forced to bite the bargain bullet and loosen up.

That's what we think, anyway. How about you?

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Comments

Kevin Lewis Jan-04-2024

The TRUTH (I was told)

I watched a news program the other day, and a very serious and trustworthy-looking man told us that we are already deep in the throes of a horrific recession, the worst since ancient Rome, in fact, and the only way out of it was for us to vote for this guy he showed in a video clip who, oddly enough, looked and even sounded like an orangutan, though I don't think orangutans are as fat. I forget the name of the program--Coyote News? Poodle News? Weasel News? Something like that.

So we must be talking about the next recession after this one. Will the casinos bring back bargains to attract at least some of us non-high rollers?

HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAAAAAAAAAA!

No.

In fact, today's QoD sounds an awful lot like a list of great reasons to never set foot in Vegas again.

Mike Jan-04-2024

LVA Coupon Book and Conventions

That's one of the reasons I order the LVA Coupon Book.  We can spend, eat, gamble and save some bankroll on the house's dime.  Is there a way to gauge the health of LV Conventions in 2023-24?  Are they still a big part of the LV economy and price gouge?

Kevin Rough Jan-04-2024

Gamble where you're wanted

I rarely gamble on the Strip as I don't think it's a good deal.  If you're willing to gamble off the strip in casinos where the whales won't visit, your action is more appreciated.  A recession will effect the casinos in North Las Vegas much more than MGM and Caesars and I believe they will offer more.

Bob Jan-04-2024

I Think

all the Gouging will eventually Bite them in the Ass!  Right now, they have FU Money... 2008 wasn't that long ago!  it will repeat itself!

Lucky Jan-04-2024

Stock Price

If and when we do get into a deep recession, no matter which political party is in power, when stock prices tank, they will do what ever they have to, including better offers, lower hotel pricing, and waiving of fees just to get you in the doors.  If gambling revenue really drops, they will produce more winners to get you into the doors.  Its always been that way, and it will always be that way.
Kevin, you may hate Trump, but be ready for him.  You going to leave the country if he is elected?

jay Jan-04-2024

Players Card

I was in Vegas at the end of December for another IT conference. I ended up down at NYNY and then over to Park for dinner at the Library. I was playing at a $50/hand table - seemed the only way to get a real shoe and 3/2 on my BJ. Three things felt odd. 1. $50 bills are perceived to be unlucky in vegas, so why a $50/hand table. I am not superstitious in anyway so this didn't bother me but I do know a lot of gamblers who are.  2. No one asked me for my players card. 3. No one offered to sign me up for a Players card. Sit down at a $25 table over at Palace station and they are falling all over you to sign up. 

I did walk away $150 up after 2hrs of play, 4 drinks and some generous tipping which is winning less than 3 hands but I was after entertainment not trying to earn a living.

John Hearn Jan-04-2024

It's the little things...

...that are never coming back. Daily maid service without asking, never mind nightly turn down on request. Less fancy toiletries. Late-night coffee shop specials, and for that matter, late-night coffee shops at all. None of those things will come back. Anything that requires humans to run will continue to be cut, year after year.

There is still plenty of value to be had downtown. For years, I got no offers from anyone. Now, I get three weekdays nights every quarter at the El, and sometimes a night or two at the 4Q. We used food and gaming coupons from both joints on our December trip. I played craps for a few hours (as opposed to a few minutes) at the $5 table at the DT Grand. The wife and I both got the boarding pass deal at the EL--$10 free play, a $25 matchplay, and a terrible beer. I got a terrific Nathan's hot dog and a PBR for $2 at the Grand. 

Sure, I miss the $2 steak special at Binion's, my first stop on my first trip back in 1995 or so. I'm still working the system, though!

Toni Armstrong Jr. Jan-04-2024

Downtown & Locals are Still Bargains

Couldn’t agree more with your assessment and projections. I’m grateful to have experienced the Vegas Strip as a relative bargain starting in 1979 or 1980…. Ah, the Stardust and Silver City days! …Then the “Wynn era” on the Strip — ah! Volcano! Castle!  Pirates! Pyramid! Live lions at MGM! Wow!…  and I’m grateful now that downtown and locals casinos still offer tremendous bang for the buck. I think the Strip  is a lost cause for the average person who’s looking for a unique experience without requiring a second mortgage — not just the fees and high table minimums, but also the homogenization and “corporatization” that just isn’t as interesting. We old time low rollers should remember to be grateful that we straddle the two eras, and take full advantage of all that is here now before it disappears too.

Michael Mendoza Jan-04-2024

still a low roller

I enjoy playing craps...as long as Ellis Island keeps 5 and 10 dollar tables, I will continue to stay at Harrahs's properties on the cheap, but roll and eat at Ellis Island.
Laughlin is an awesome low roller choice too :)

Sandra Ritter Jan-04-2024

So sad

That so many people would vote for someone who hasn't exhibited one ounce of moral fiber in his lifetime.

Thomas Dikens Jan-04-2024

Vegas and lower prices

1. GOOD QOD. I love how clearly you state your views.
2. It does beg the question, were is the best places for low rollers to go. Both in Vegas and the rest of the USA  / World. 
3. I manage to average $50 or less a night by staying at the Excalibur.  I like the strip poker rooms although the juice in the tournaments keeps going up. 
4. Recession aside a bigger risk to the strip would be a pattern of terrorist attacks by a an extremist organization.
5. In the spirit of what do you do if you see someone cheating at cards. (You bet on them.) I do continue to buy MGM stock.
6. In the book "Ace on the River" he does advise, after stating all the complex factors, only play were you tend to win.  That is not the strip, for most games anyway. South Point has some nice pluses.

David Miller Jan-04-2024

And Yet

 Sandra - it truly has been a shame and worse for the results of 81 million (really, 81 million?)people  who voted for Biden. One more painful year and then this corrupt traitor will be out of the White House and hopefully in prison. MAGA 2024

sunny78 Jan-04-2024

economy

Perhaps Kevin it would look good on you if you had a little compassion for many people who are indeed struggling with inflation under this group on food prices way up, energy costs, sky high house prices and rents over the last few years and are working several jobs just to keep up with it all. And this reflects in polling. Many people are hurting. But good for you, glad you're doing well enough to mock others who are hurting and have extra income to dump on gambling. We are all impressed.  

Lucky I'd be happy if he just left the QOA and takes his bitterness and one-trick pony topic with him.

Robert Jan-04-2024

Comps

Yes, bargain pricing is disappearing, but comps are what even it out. And downtown properties are pretty generous with them. If you bring them a decent amount of play (only VP for me) then your room and food are free. It ends up being that airfare and tips are my only expense. A cheap vacation that way, especially if I at least break even on my play.
PS: it would be great if politics could be left out of the QOD!

grouch Jan-04-2024

david miller

what about that other crook can say the same thing of him

Sandra Ritter Jan-04-2024

David

LOL. The corrupt traitor hasn't been in the White House since January 20, 2021

David Miller Jan-04-2024

Correction - Not a "laughing" matter

 Sandra - The "corrupt traitor has and continues to reside in the White House since January 20, 2021.

John James Jan-04-2024

So sad

Sandra,It is sad that we have to put up with the worst president in the history of the U.S. go another year. Dementia Joe has destroyed our borders

VegasVic14 Jan-04-2024

I realize this place is a free-for-all, but...

I'd like all the political commentary (outright or disguised as humor) not to be allowed. The QOD forum is so much better without it and the back-and-forth volley that happens resolves nothing.

grouch Jan-04-2024

vegas vic

how true as no one will change there minds on that subject

Frank Nicosia Jan-05-2024

LVA thank you

Greatly appreciate your insight; bad as the picture you paint sounds. Strikes me as accurate. Piggyback on another comment….. could you delete, ban, etc the ridiculous political comments? Truly a waste of print.

Tim Clark Jan-07-2024

low end gambler

I agree and disagree with your statement.You stated they would like 1 high roller as to 1,000 low rollers. Well 1 high roller gets comped rooms /food/ beverages/ shows etc. 1,000 low rollers pay for room/food/shows etc Yes they don't gamble as much but pay for everything else. Example 1,000 rooms at $100 is a $100,000 as compared to nothing for a high roller or worse yet no rooms so zero dollars. Shows 1 whale no one else show closes.

Bernard Berg Jan-07-2024

Politics

Wow - wouldn't it be great if folks would leave politics TOTALLY out of this fantastic website???

Question of the Day - 04 January 2024

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