Well, another year is about to go into the history books so to speak, and I don’t think it is one most people will miss very much.
Queen Elizabeth dubbed 1992 Annus Horribilis due to a spate of scandals that rocked the royal family; I think many people today would consider 2016 Annus Horribilis, Horribilis HORRIBILIS—it was that bad of a year. Let’s count the ways: escalating wars, terrorism, mass shooting, refugee crisis, Brexit, the U.S. presidential election process…a rather depressing lineup of events that goes on and on.
But here is the rub—2016 was actually a pretty good, if not great, year for gaming. Indeed, the positives seem to really outweigh the negatives. They include:
A resurgent Las Vegas: It’s been a very good year for our largest domestic gaming market and it appears it will end on a high note. According to Union Gaming, the Las Vegas Strip kicked 4Q16 off strong, posting 14.0 percent year-over-year growth in gross gaming revenue (GGR) for October. The gains were broad based with a 10.1 percent increase in slot win and an 18.7 percent lift in table win. Downtown Las Vegas also reported a 29.5 percent uptick in year-over-year GGR, while the locals had a 10 percent revenue gain.
Regional relief: The first six months of 2016 were pretty good for the regional commercial U.S. gaming markets, according to RubinBrown Gaming Services. Combined, these markets experienced a 1.1 percent year-over-year gross gaming revenue increase. Some regions did much better than this average, however; the Northeast and Mid-Atlantic region grew 4.3 percent, led by an 8.5 percent GGR increase from Maryland-based casinos and a 5.6 percent growth rate from gaming properties in New York. Other jurisdictions such as Ohio (5.2 percent) and Pennsylvania (3.4 percent) also had a very positive first six months of 2016.
Macau on the Mend: After years of revenue decline, there was finally some good news about Macau, where Union Gaming reported that GGR for the mass market sector grew 11 percent in 3Q16. This was a welcome result, considering the spate of recent resort openings in the enclave (Studio City, Wynn Palace, Parisian) and fears that they would dilute rather than grow the market. Some properties even reported monthly year-over-year revenue growth from the beleaguered premium mass market sector, the first time that has happened since 2014.
Manufacturers on the rise: After all the financial uncertainty and merger mania impacting the supplier space for the past few years, it was a relief to have a relatively calm 12 months. These consolidated companies also put their collective best foot forward in 2016 when it came to innovation and new product introductions. The skill-based gaming finally took off, with nascent companies such as Gamblit Gaming and GameCo introducing new products and actually placing them in Caesars Entertainment casinos in California, Las Vegas and New Jersey. Traditional slot machine suppliers such as Konami Gaming, IGT and Scientific Games have also come out with skill-based prototypes. The table game segment showed promise, with a myriad of companies showcasing traditional and electronic game concepts and ancillary support devices designed to make the games easier to operate and manage.
Of course, there were rough spots for the gaming industry in 2016—some of the regional markets are still stagnant, an effort to legalize casinos in Japan once again ran onto the rocks, several suppliers are still performing below expectations—but its the holidays, dammit, and I’m going to concentrate on the candy canes instead of the coal.