Having endured a tough few years, North America's gaming industry is now firmly on the road to recovery
IT is perhaps foolish to attempt to discuss North America as if it were one, homogenous market.
In the US alone, the sheer size of the country means that each individual jurisdiction is as large and as diverse as many of the markets in Europe or South America, for example. Equally, there is just as a great a disparity in the maturity of each of these markets - Las Vegas and Atlantic City aside, many gaming jurisdictions in the US are only a few years old.
The same can be said of Canada, which embraces both privately owned and state-controlled casinos, and Mexico, a country that continues to experience unprecedented growth in gaming. The Caribbean, which has been bubbling away nicely for many years, is set to see the largest casino ever developed there with the Chinese-backed Baha Mar complex in the Bahamas.
The US, undoubtedly rocked by the recession, is beginning to recover once again and, as consumer spending improves, the industry is slowly beginning to experience an upturn. The difference now, however, is that the landscape is changing and so for the likes of Las Vegas and Atlantic City, competition from regional casinos is starting to bite as people choose to gamble closer to home.
Although Las Vegas was among the worst hit by the downturn, largely due to the scale of operators' debts and a lack of liquidity, it now appears to be on an even keel. It may never recapture its place as the world's largest gambling destination but it boasts amenities that appeal to a broader audience than Macau or elsewhere. As a major tourism destination, it continues to attract visitors and, thankfully, new investment.
The story is not the same for Atlantic City, where poor management, unfinished projects and recent inclement weather have badly affected a city whose popularity was already on the wane. News of dwindling revenues and the prospect of greater competition from Pennsylvania and New York has made for difficult reading. Now the talk is of state intervention and redevelopment to diversify the Boardwalk's offering.
Whether the creation of smaller 'boutique' casino hotels will stem the tide remains to be seen, particularly as neighbouring states ramp up their own gambling sectors. The introduction of table games to Pennsylvania and the billion-dollar Resorts World New York project undertaken by Genting demonstrate how, as one market struggles, others are prospering.
Observing this success, other states are exploring the possibility of either introducing casino gaming or broadening the gaming they do allow - some more aggressively than others. States such as Florida and Massachusetts are pushing for full-blown commercial casino gaming, along with the likes of Illinois and possibly Texas. The racino sector is also seeing growth. All this suggests that the US is a market that is set to grow at a healthy rate as state lawmakers realise the wider regenerative and tax benefits gaming can bring.
In neighbouring Mexico, the market is considered to be one of the fastest growing in the world, with three or four gaming halls opening each month. The recent tragic events in Monterrey may steal the headlines and cast the country's gaming industry in a poor light but it may also force the government to face up to the fact that it needs to tighten its regulatory framework to combat fraud and corruption. Both operators and equipment suppliers have been calling for new gaming laws for a while now in an effort to address much of the uncertainty within the market. Many feel the lack of clear regulation could jeopardise their existing licences for other jurisdictions but the market's potential is undoubtedly an attraction.
Canada, meanwhile, has experienced much of the same difficulty as the US, with consumer spending hit by the recession and greater competition from other forms of entertainment. However, unlike its neighbours, it is pioneering online gaming in North America, choosing to make the leap ahead of the US and demonstrating how the internet can be a much-needed source of revenue for land-based casino operators. The challenge now is to marry these two strands of gaming into one, complementary business that puts the consumer at the heart of its offering.
This is likely to become all the more important as competing gaming jurisdictions are created south of the border. The signs are good, however, as several companies continue to develop and re-invest in their estates in order to provide cutting-edge gaming experiences.
Finally, the Baha Mar project and the prospect of legalised commercial gaming in Jamaica suggest lawmakers in the Caribbean now view large-scale casinos as viable economic drivers. The region already boasts a strong tourism industry and a vibrant gaming market, ranging from slot halls to large integrated resorts. The carefully regulated expansion of gaming here is to be welcomed, as it further demonstrates the importance of gaming within a wider tourism context.
Yet, despite this, these major projects represent more than simply an opportunity to broaden the gaming offering - they are ways of creating employment, generating revenues for the government and attracting additional investment to the region.
