Your Own Casino: Setting Up and Running Costs
A Casinos Running Costs: Setting Up And Running Your Own Casino
So, you want to have your own casino? Well, let’s hope you have a tidy sum of cash at hand. Today’s casinos are incredibly lucrative and finding investors in new projects is much easier than it used to be. Only a few decades ago, building a casino was a risky venture, and securing finance was not an easy matter. A good example would the Mirage, which was built in the late 1980s, or its owner Steve Wynn it wasn’t easy securing the finance needed. The $630 million required was unheard of sum and many industry insiders calculated that he’d be needing to see at least $1 million per day in profits to pay off the loans.
The Mirage was penciled in to pay off its financial obligations in 7 years. But Wynn was able to clear all of its debts within just 2 years, such were the profits from jackpot games and gambling. This worked out at more than $4 million per day. In 2020 $ amounts this is still an impressive figure. Put it this way, if the casino only had 1,000 slots machines, then it could turn over $5 million by retaining an average of $1000 per machine per day. So it’s very doable.
You Can’t Compete With Las Vegas
In 2015, the Las Vegas Sun newspaper calculated that around 40 million people visited the city that year. That’s around 110,000 for each day. To keep them all happy and spending there are over 100 casinos within the city limits. Two years later in 2017, that figure had jumped another 2 million upwards. If each visitor were to lose an average of $100 per day, that would add up to a city-wide income, just from gambling, of $11 million per day. The University of Nevada published a study in 2013 which suggested that the daily revenues of the 23 biggest casinos in Las Vegas had an average yearly revenue of at least $230 million.
Your Own Casino: Location, Location, Location
So, if you’ve set your heart on joining this elite club, then you’ll first need a prime location. On the one hand, you’ll want to be somewhere with lots of foot traffic and on the other hand, you’ll want land cheap enough not to use up all the funds before you start building. The thing about Las Vegas is that it sits bang in the middle of three Interstate highways and several US highways. It has its own airport, McCarran International through which around 40 million passengers pass each year. On top of that, you also have Amtrack carrying passengers into the heart of the city.
The problem is that building your own casino out of city limits is going to affect the number of visitors in a big way. Gamblers go to the casinos to win the jackpot. But finding a steady stream of customers is why so few cities end up dominating so much of the gambling industry. You’ll need good zoning and great transport infrastructure. And all of that is going to pump up the price of land.
Size Counts In Every Way
If you take a look at an out-of-town casino, then the WinStar in Thackerville is a good example. It has only one highway passing through. And yet it’s the biggest casino in the world. There are over 8,400 slot machines sitting on over 400,000 feet of floor space. They also have 55 table poker rooms. This makes it around six times bigger than the Mirage in Las Vegas. The nearest international airport is Dallas TX and that around one hour’s drive away. But here’s the thing. The owners of the WinStar didn’t have to buy the land. They are a tribe and the WinStar is a tribal casino. All they had to do was start building. So it was much easier for them to invest in structure as they saved a fortune in land prices.
Your Own Casino: You Need a Hotel and Restaurant
It’s logical that if you’re going to build your own casino, you should also provide a place for the gamblers to stay. Of course, having to provide a luxury hotel and casino is going to bump up your total spending, but you can’t really have the one without the other. Think of it this way; if you can provide your gambling guest with all the things they could possibly need, then they can just get on with the gambling. Also, on-site dining and entertainment can only enhance your casino venture.
An important consideration is that virtually all US cities will have placed limits on how many casinos they allow within their jurisdiction. As a result, finding suitable land is not so easy. Right now Biloxi MS is probably the US’s third busiest gambling hub. You’ll find The Hard Rock, Treasure Bay, and the Beau Rivage offering casino games as well as accommodation and entertainment. Probably the Beau Rivage is the best-known outfit in town, is owned by MGM Resorts. Not only do they have over 800 slots machines, but they also offer a hotel, entertainment, and nightlife. Though the average cost of a hotel anywhere in the US is around $22 million, and place that offers gambling with the hotel attached is going to run into the $100’s of millions.
Factor in the Cost of Games
Let’s assume that you’ve got your permissions and licenses. Then you’ll need to go shopping for slot machines, to begin with. Be warned that they are not cheap. Regular slots will set you back around $5,000. But any progressive or enhanced jackpot slots are going to be north of $30,000 per unit. For the sake of argument, let’ssay that you have paid around $20,000 per machine. Your casino needs to have a minimum of 500 slots, so the grand total is already an eye-watering $10 million. You’ll also need to fork out for a maintenance team or pay for an authorized service contract. But keep in mind, that providing you can bring in the punters, then that’ll be paid off in just a few months.
Plant Operations Are Expensive
Whatever size casino you’re planning, then you’re going to be needing electricity, water, sewage, and maintenance areas. Most resorts will have a plant facility on-site as there’s always repairs and other work to be done. To that end, you’ll need workshops, storage facilities, receiving areas, etc. Even if you only have a relatively small hotel of say 200 rooms, then it’ll still need its own plant facility. The same will go for the restaurant. Then there’s the sound systems, lighting, communications hub, and staff offices. There’ll be dressing rooms, locker rooms for employees, and any number of toilet and bathroom facilities. There will be a dedicated full-time security staff who’ll also need their own personal space. The cashier will need a counting room. And let’s not forget about all that cash sloshing around. You definitely be needing a vault for that.
Conclusion: Setting Up Your Own Casino
The hard truth is that you’ll never have enough money to even consider thinking of opening your own casino. Unless it’s one for ants! This is the playground of billionaires and it’s certainly not for the faint of heart. Yes, of course, there are thousands of tiny casinos all over the country. They don’t necessarily need big highways and Interstates or international airports. But they simply cater to the local customers. But don’t go thinking you are going to strike rich at this small scale business, no matter how good are your best jackpot promotions. Keep in mind that the vast majority of US towns and cities will not accept the idea of having a casino on their doorstep. You’ll never get a license with which to operate.
Also, where ever you are planning on setting up your own casino, there’s bound to be a tribe or two. Rather than opening their own casinos, they simply lease out the land to some of the world’s biggest gambling companies. You have zero chance of competing. If you have the money, you could always try buying your way in. Donald Trump tried that with Atlantic City and ended up losing over $1 billion of investors’ money. Maybe it’s best to stick to playing in the casinos a little rather than the headache of ownership.
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