Evil digits.
The problem for Vegas is long term erosion of its revenue base, irrespective of near term travel issues. The majority of casino gaming floors are devoted to slots - the highest margin gambling offering. The target client for slot play has traditionally been women, and older women at that. This segment of casino customers is inevitably shrinking, for reasons of natural processes, and the gaming companies have failed (despite more than a decade of investment) to unlock younger slot customers in the US. Vegas casinos are enormously oversupplied with real estate, for which there are no obvious productive uses - essentially, if an activity could be monetized, it’s already available. Now add to that looming nightmare the loss of the big conventions, and all the attendant revenues they bring, foreign travel, and the enormous overhead costs incurred merely by being open, and casinos are staring at an existential challenge. The future will not be like the past. The massive early 2000s investment in casinos with many thousands of keys and millions of square feet of gaming and commercial space is simply no longer viable. Adelson is looking at bailing now, because he sees what’s going to happen, regardless of politics and pandemics. He’ll probably be successful in passing the parcel to a private equity buyer, but the demographic and structural problems will remain. The fundamental issues are not new news, although the Vegas elite has steadfastly refused acknowledge long-term investment risks arising from shifting demography and consumer psychology. The systemic shock arising from Covid is only an accelerant for the unavoidable clusterfuck to come.