Over the last year, financial profit generated from casinos across the world has been falling, and drastically so in some cases.

Falling profits appears to be a global phenomenon, with casinos in Europe, Asia and Australia all reporting falls in profit. The reasons vary from region to region, but there are common denominators across the market.

Firstly, there appears to have been a slump in the ability for long-established venues to attract wealthy international gamblers to sites in Europe and Australia. In Asia, natural disasters have taken their toll on venues’ earning capacity.

As a result, stock in the companies that own the casinos is falling and as such the market has a long way to go before things start to look up.

In the UK

Profits are falling across the scale for UK casinos. From the Ritz to Rank casinos are seeing profits fall due to a range of factors, including clients winning more frequently and a slump in the number of big-spending foreign gamblers spending their money at the country’s casinos.

Henry Birch, CEO of Rank, which owns Grosvenor casinos as well as Mecca Bingo, said the fall in profit was due to “more stringent customer due diligence to address money laundering, proceeds of crime and problem gambling, in common with the rest of our industry”.

The company’s revenue rose by 1% year on year for the the 2017 financial year, but pre-tax profits dropped by 7%. The revenue generated by casinos alone fell by 3% year on year, which led to the company describing it as a “challenging year”.

At the Ritz, in the 2017 fiscal year the casino saw a loss that canceled out the venue’s previous year’s profits of $11.64 million – and more.

The venue owned by the Barclay brothers reported a loss of $15.3 million in 2017. According to the company, this was a result of them paying out more, despite the footfall remaining steady compared with previous years.

Adrian Barclay, board member and son of David Barclay, said “efforts to encourage new Middle East and Far Eastern players remain focused and business in 2018 is expected to be more fortuitous”.

In Australia

Crown Perth has seen a 10% drop in revenue year on year. From July 1 2017 to June 30 2018 the casino saw its gaming revenue drop to $409.8 million. A 24% drop in revenue generated by baccarat confounded the fall in revenue.

This game, popular with wealthy Asian clients, generated $118.4 million compared with $278.3 million when the venue was in its heyday in 2014.

Crown Resort, the company that owns Crown Perth, had hoped to turn the venue into the go-to place for wealthy gamblers from Asia, but a crackdown on foreign gambling companies by Chinese officials has resulted in a fall in popularity.

Public scandals have also hit the company, from alleged fixed slot machines and 19 employees who were arrested for participating in crimes that breached China’s anti-gambling policies. Earlier this year James Packer, who owns 50% of the company, announced his resignation executive chairman of Crown Resorts.

In the US

Even the world-renowned Las Vegas strip hasn’t been spared from this global downturn. In January this year, the Strip’s revenue dropped by 8.9% to $554.8 million and, while one month alone isn’t enough to form a trend, according to figures released for the first quarter of 2018 revenue has fallen by 6.1%.

MGM Resorts and Caesars Entertainment are both reliant on the revenue generated by their Las Vegas venues. Again, it seems that a slowdown in people playing baccarat could partially be to blame for the slump.

Over the past year income generated by the game has fallen by 14.1% to $1.09bn, leading to the game being almost single-handedly responsible for Las Vegas’ slowdown in revenue.

In Vegas, much like in London, the game was popular with wealthy Asian players, who seem to have deserted the Strip just as they have left the Crown in Perth and the Ritz in London.

However, it isn’t the first time and won’t be the last time, as gaming trends have changed and it is likely companies will find a new niche that appeals to the same players to boost revenue over coming years.

In Asia

Macau’s casinos have been battered by storms, leading to falls in revenue equating to around US$1.42bn. The deadly storm claimed 10 lives and left large parts of the city without water.

The government has agreed to provide funding for small and medium-sized companies to re-establish themselves and as September 7 they had already received 10,544 applications for aid.

Macau’s casinos have been running special offers in an attempt to boost their revenue. While several major venues have gone unscathed, some were cut off from electricity and water during the storms. They are now operating as usual but are suffering with the aftermath of the natural disasters.

The storm hit during prime tourist season and will undoubtedly have affected revenue for the venues, although specific figures have not yet been announced.

In Korea the only locals’ casino, Kangwon Land, has seen its revenue fall. Sales fell by 9.2% year-on-year at the casino to $301.6m. The decline combines a slowdown in gaming and non-gaming revenue, both of which are down by 9.1% and 9.5% respectively.

The casino’s operator has not confirmed why it believes the figures have slumped, but industry insiders believe it could be due to a reduction in the number of tables in operation at the venue as well as current scrutiny into 226 employees’ employment via political connections.

In conclusion

Casino revenue around the world is facing a downward trend for a variety of reasons.

The foremost reason is a slowdown in Asian players traveling to Europe, the US and Australia, leaving a large slump in income for casino owners to recover from other sources.

In Asia, a series of natural disasters has had a big impact on casinos operating out of Macau where tourism has had a difficult year due to tropical storms and typhoons.

It would seem operators are going to have to be innovative in order to tempt high paying clients back to their venues worldwide over the coming years.