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Are Smaller Casino Markets More Recession Proof?

20 January 2011 by admin

It would seem that they are more recession proof than their larger counterparts. One only needs to check out some of the money statistics and figures for the smaller casino markets and then compare them to the glaringly obvious hurt that larger casino markets, such as Las Vegas and Atlantic City.

Truthfully the recession in the United States did hit all casinos for something. Gambling is not essential to life like things such as food and a roof over one’s head is. Things like gambling and tourism fall by the wayside. Which makes us wonder how did the smaller casino markets, such as Iowa, keep their revenues relatively stable.

Take a look at the numbers. In Iowa’s fiscal year of 2008, according to the Iowa Racing and Gaming Commission their casinos’ revenue sat at $1.4 billion. In fiscal 2009 Iowa’s casino revenue was at $1.3 billion, which was only a 3.5% drop. That is a far cry from the declines experienced by Las Vegas and Atlantic City. Fiscal 2010 is not over yet, but already the Iowa casinos’ profits are up by one percent when compared to this time last year. So bravo to the Iowa casinos!

But how did this happen? How is it that tiny casinos—tiny when compared to the casino resorts found in Las Vegas and Atlantic City—could have maintained such stable revenues while the casino resorts suffered?

The answer is actually very obvious. Gambling centers such as Las Vegas and Atlantic City rely heavily on tourism. Their casinos are geared for tourists. Yes, they do have a local following, but they lean more heavily on tourists. And with people vacationing less and tourism down all around the US, casinos in Las Vegas and especially in Atlantic City feel the drop more so than the smaller casino markets.

Smaller casino markets, on the other hand, are aimed more so at locals within a driving range. They do not cater to tourists. And because patrons of smaller casino markets are not having to come up with extra money to pay for a hotel room and food and other goods and services in order to stay and play their favorite casino games. Patrons of smaller casino markets need only worry about the gas to get to and from the casino and perhaps the cost of a drink or two. The money difference between patronizing the two is vastly different, with the smaller casino markets being the more cost effective.

This is why smaller casino markets, such as Iowa, are able to keep their revenue relatively stable when compared to Las Vegas and Atlantic City—who is in dire need of the New Jersey governor signing the Intrastate Gambling bill.

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