How Much Mines Games Tips Does It Cost to Own a Land-Based Casino?
Have you ever had one of those days where you just wonder what life would be like if it were entirely different?
I’m having one of those days today and it made me think about what it would be like to own a casino. Considering how much money I have spent on gambling, I know that it is a profitable business. But how much cash does it actually take to own and operate a casino?
Did you know that dozens of business owners tried to open casinos in Las Vegas, but they ran out of money before it got finished?
In the past, the Mob would rescue their projects, which is one reason that organized crime syndicates owned so much property in Las Vegas.
For example, Wilbur Clark invested $250,000 to start construction on The Desert Inn, but he ran out of money to finish it. Moe Dalitz, a Cleveland crime boss, got a loan for an additional $1.2 million and took over the casino that Clark had started.
Police have since cracked down on organized crime, so you cannot use that as your backup plan.
Today, if you run out of money while building a casino, your best bet is to hope that one of the massive casino corporations, like MGM or Caesar’s Entertainment, will bail you out.
Once I started thinking about the cost of owning a casino, I couldn’t get it out of my head until I researched it.
If Wilbur Clark started with $250,000 in the 1940s and didn’t have enough to finish, how much would you actually need today?
I can guarantee that I do not have enough money in my bank account, but a girl can dream, right? So, I set out to figure out how much it costs to own a casino.
This post is going to explain the expenses and start-up costs that you would need to take into consideration, as well as the maintenance costs to keep it going.
To start things off, let’s focus on land-based casinos in particular.
Most brick-and-mortar casinos also have hotels, restaurants, entertainment centers, and stores, which obviously add to the cost.
But I want to break it down to help you understand what all of the various expenses are that might be associated with owning a casino.
Land and Casino Construction
The location of your casino will affect the cost significantly.
If you happen to be the only casino in that city or state, you do not need to put as much money into making your casino the best of the best.
When you build a casino in Las Vegas or Atlantic City, other casinos are right next door. So, you have to spend more money to make sure your casino stands out enough to attract customers.
In addition, space is limited, so the cost of the land is higher in major cities. For this example, let’s assume that you are going to open a new casino in Las Vegas.
It is interesting to note that one of the most expensive casinos in the world was actually built on the same land that used to be the home of the Desert Inn.
Steve Wynn bought the property for $275 million, but that was pocket change for the guy who had just sold the Mirage to MGM for $6.4 billion. Construction on the Wynn Las Vegas took five years and an additional $2.7 billion.
Wynn Las Vegas held the title of the world’s most expensive casino from 2005 until 2010, when the Cosmopolitan opened for a total of $3.9 billion.
So, if you want to beat the world’s most expensive casino, you will need at least $4 billion for the land and construction alone.
However, you do not need to build the most expensive casino. If you want to compare the costs of a more moderate casino, consider Mandalay Bay.
Its price tag was only $950 million. Luxor and Excalibur were both about half that price.
Remember that these prices include the cost to construct the hotels, convention centers, and entertainment venues, as well.
Many of the Las Vegas Casinos have several thousand hotel rooms. The average American hotel only has 115 rooms.
So, you could easily cut costs by reducing the number of rooms that you include, but that will also limit your potential customers.
Some of you are probably thinking that you could save money by purchasing an older casino and renovating it.
Many of the oldest casinos on the strip are from the 1950s and 1960s, including the Flamingo, Tropicana, and Caesar’s Palace.
Some of them have been renovated several times, but they all could use a little love.
However, that is not going to work as a strategy to save money. MGM routinely buys out other casinos for billions at a time and then pours the same amount of money into the renovations.
Licensing Fees and Taxes
Once you get your casino off the ground, you have to consider licensing fees. Each state assesses different fees for casino licenses and taxes the profits at a different rate.
Nevada charges $250/machine for slot machines, and they have different prices for tables games based on how many games you have.
Any casino that has fewer sixteen table games only pays $125 per game. If they have more than thirty-five, they will pay $20,300 each year, plus an additional $25/ game over the thirty-five-machine limit.
As far as taxes, casinos in Nevada have to pay 3.5% of the first $50,000 plus 4.5% of the next $84,000. If they make more than $134,000 in profit, they will pay 6.75% on all revenue over that benchmark.
That number is based on their gross gaming revenue, which is the amount that the casino makes after it pays out prizes. They also have to pay licensing fees and taxes if they host live entertainment.
You can’t have a casino without slot machines and table games. Those things are obvious, but you might be surprised to learn how much they cost.
There are also a lot of extra miscellaneous supplies that you might not have thought of. Let’s take a look at what all of the gambling supplies will cost.
Casinos typically spend between $15,000 and $25,000 for each slot machine.
The prices differ based on design elements, licensing factors, game software, and whether or not the casino has a profit-sharing deal with the manufacturer.
Typically, casinos focus on slot machines more than table games because that is how they earn the most money, so they buy up to 5000 slot machines.
You should budget between 25 to 100 million dollars for slot machines. Keep in mind that slot machines need to be updated every few years to keep customers interested.
The next thing you need is a table for all of the table games that your casino will host.
You can expect to pay between $2,000 and $7,000 for tables depending on the game and design features.
Most casinos get customized tables that allow them to choose the betting options listed and to have the casino logo printed on them. It will get more expensive if you want to make things custom.
Dice, Playing Cards, Shufflers, Signs, and Shoes
Next, you need all of the materials for each game.
If you offer craps, you will need dice, as well as sticks for the croupier.
A deck of cards is not the only supply for card games. You also need automated shufflers, shoes, and discard trays.Poker games also require poker pucks.All of those supplies will probably end up costing around $100 per game, on average.
Some materials will need to be replaced regularly, while others will last a while.
In addition, you will need signs for all of your table games, and computer monitors for games like baccarat that need additional displays.
Next on the list is the chips. One hundred chips in a variety of denominations can cost anywhere from $5-$15, but one hundred chips are not going to get you very far.
You will need millions of chips so that you can cover a variety of denominations. Chips are another thing that many casinos customize with their logo, but that customization will cost you more.
Do not forget about chip cases to hold and organize all of those chips. Depending on the material that they are made out of, they will cost you anywhere from $25 to $150.
To be safe, you should budget at least $20,000 for chips and chip trays.
One of the best ways that casinos convince players to keep playing longer is by making sure they are comfortable.You will need some appealing and well-designed chairs to make sure that players can sit for a few hours without getting uncomfortable. If their back starts hurting, they will leave in a hurry, so you need well-designed chairs.
Expect to pay at least $150 per chair. Do not forget to get chairs for the dealers, as well.
Some of the most essential supplies that casinos need are the ones that help them manage financial transactions securely.Drop boxes cost anywhere from $50 to $250 depending on the size and materials. You will need at least one dropbox per table game. The cashier’s booth will need cash drawers that cost $35 each and computers for each window. Overall, you need to plan at least $100 million for the slot machines and tables themselves. I would recommend planning on another $20-$30 million on the additional supplies.
Remember that this is in addition to traditional business necessities like computers, office supplies, and cleaning supplies.I have not even begun to consider the costs for the hotel, bars, and restaurants that your casino would have.
Staffing and Maintenance
Casinos do not run themselves, so the next thing that you will need to consider is staffing.
You will need:
Customer service representatives
That is just to run the gaming part of the casino.
Do not forget about:
Some casinos employ up to 1300 people at any given time.
Hourly employees typically earn $9-$15/ hour in a casino setting, and they rely on tips to supplement their income.
Salaried employees, including management and pit bosses, make anywhere from $50,000 to $100,000 per year.
Finally, there are maintenance costs. You will need to buy some supplies over and over again.
Furniture will need to be replaced or updated every five to ten years. Casinos want their customers to feel like they are in the height of luxury, so all of their surroundings have to look like it.
That means that the casino needs to be clean and free from any signs of wear and tear. It will take a lot of maintenance work to keep up those appearances.
Put It All Together
Now that we have considered all of the various costs that you would face if you wanted to own and operate a land-based casino let’s take a moment to put it all together.
Assuming that you want a decent hotel in Las Vegas, let’s assume that you will need at least $2 billion for land and construction.We will assume that you have 3,000 slot machines and 50 table games. Licensing fees will add up to $770,675 each year, plus taxes. Add in the $125 million for gaming supplies and another $100 million per year for staffing.
You will need at least two billion two hundred twenty-five million seven hundred seventy thousand six hundred seventy-five dollars for construction and your first year of business.
So, unless you are a billionaire, you are going to need a substantial loan to open a land-based casino.However, if you choose to make a smaller casino in a less expensive area than Las Vegas, your costs could be significantly lower.
I hope that this blog has not dashed all of your dreams of ever owning a casino.
If you do not have billions of dollars for a land-based casino, you could attempt to operate an online casino instead.They are more expensive to operate than you might think, but not nearly as expensive as a brick-and-mortar casino.