Introduction
This is a case analysis of " The Global Casino Industry in 2017 ." For over half a century, the casino business has been booming, leading to a $150 billion industry. The United States has been leading in terms of revenues in the gambling business during all this period accounting for over half of the world's gambling revenues. A significant portion of the revenue is reported to have explicitly come from Las Vegas and Atlantic City ( Tracy, 2019 ). However, in the past decade, things have changed, and Las Vegas and Atlantic City are faced with competition from other locations opening across the United States with other states legalizing gambling to generate tax revenues and to promote tourism.
- The Problem
Las Vegas and Atlantic City have, for the last 50 years, been the pillars in gambling around the world. However, revenues have dwindled in favor of the new competition. This case analyses the factors that have led to the failure of Las Vegas and Atlantic City casino business and the factors contributing to the success of the competitor. This paper uses SWOT analysis to examine the strengths of Las Vegas and Atlantic City in the casino business, its weaknesses, the available opportunities, and the threats the Las Vegas and Atlantic City casino business has experienced. SWOT analysis will help in the understanding of the business environment of operation, and as such, recommendations are given at the end.
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- Data Analysis
SWOT Analysis is a strategic assessment tool that can be used by organizations or other entities to identify their strengths, weaknesses, available opportunities, and threats. The analysis is essential for planning or business competition purposes. Weaknesses and strengths are subjects of the internal business environment, whereas opportunities and threats are major factors of the external business environment.
Strengths (Internal, Positive Factors)
Strengths, in this context, refer to the potential advantages that an organization has over its peers. Companies in the same industry can have diverse strengths depending on their specific competitive advantages. Company strengths may range from positive performance, accessibility to resources, access, and dominance in the market, or high level of sales. Las Vegas and Atlantic casinos rely on gamblers from all over the globe, including China. For years, the two cities casinos have drawn gamblers through the development of extravagant new properties, including the MGM Mirage at the city center featuring luxury hotels, restaurants, condominiums, and shops ( Gerring, 2008 ). The older properties also underwent extensive renovations like the Caesars Palace. Other luxury hotels and resorts worth billions of investments have also been opened in the cities, including Revel Hotel and Borgota Hotel.
Weaknesses (Internal, Negative Factors)
Strengths are always accompanied by some weaknesses that may deteriorate the growth or development of a company if not solved in time. Weaknesses point at specific areas that a company may need to improve, avoid, or mitigate. Las Vegas and Atlantic City are currently being viewed as the old gambling and casino destinations, people across the world and renowned gamblers are exploring new locations, and they want to benefit from millions of dollars of packs that new destinations are offering.
Opportunities (External, Positive Factors)
Businesses that desire further growth and development always eye real worthwhile opportunities. Opportunities are chances that an organization, through its management and team members, can explore to improve its profits or expand its scope of operation. Most opportunities come through market identification and innovation, which relate to the external business environment. Macau has grown from a tiny town to a booming casino and gambling city, generating more than $40 billion, six times higher than the Las Vegas strip.
Threats (External, Positive Factors)
Threats refer to the obstacles or major challenges that may prevent the business from growing and attaining its objectives in the long run. Organizations should be aware of their threats to be able to prolong their time and existence in the market. Threats may originate from competitors, increase in debts, ineffective management, or the government. To avoid threats, businesses may need to adhere to relevant authorities, manage risks effectively, and employ competent staff. Another threat is the spread of casinos to locations across the Asia-Pacific region. Another threat to Las Vegas and Atlantic City casinos is the continuing legalization of casinos in different cities across the American states, like in 1931, Nevada legalized gambling. In 1976 New Jersey legalized it, and several states have since followed suit. The casino competitors in other regions have ramped up the appeal of their properties, and they also offer great incentives to keep the customers from moving to other casinos (providing complementary foods, shows, beverages, and perks worth millions of dollars ( Tracy, 2019 ). Some US casinos are forming mergers and acquisitions to beat the competition like Harrah's purchase of rival casino Caersers. Lastly, the emergence of Makua as a major gambling city is a direct threat to Las Vegas and Atlantic City casinos.
- Recommendations
From the analysis, Las Vegas and Atlantic City casinos are experiencing a decline in revenues and popularity as a global gambling destination because of the emergence of other new locations. The new locations are not only vigorous in their market, they have attracted heavy investments, offer huge incentives to gamblers. They have also branded as the new places to gamble. Other states are specifically experiencing growth in gambling and casinos because of state legalization of gambling to collect revenues, something that was not there initially. The rise and rise of Macau as a gambling destination I specifically stealing Las Vegas and Atlantic City as the world gambling destinations. Despite the competition, Las Vegas and Atlantic City have a competitive advantage in that it is already established as gambling locations, with huge investments and bigger gambling facilities. The cities also benefit from the fact that it is already known as a global gambling destination and attracts gamblers from as far as China. Las Vegas can borrow from Macau ( Gerring, 2008 ). Las Vegas and Atlantic City can continue investing more in modern facilities, and it must market aggressively and stop depending on the fact that it is a monopoly (it was, not it is not, and marketing must begin), the cities must give huge incentives and reasons for people to move from other parts of the world to gamble in the city. The other American states are giving gambling an edge by easing regulations on gambling, and the respective governments must follow suit and make gambling easy for the business owners to create more revenues.
- Conclusion
Las Vegas and Atlantic City had its glory days, basking on the monopoly that other states legally barred gambling. Well, that changed, and states are not only legalizing gambling; they are supporting gambling to enable more revenue flow. Competition has worn out gambling and casinos in Las Vegas and Atlantic City, and as such, things have to be done differently. It won't wake up at once, but more work has to be done gradually, and over time things will change for the better.
References
Gerring, J. (2008). Case selection for case ‐ study analysis: Qualitative and quantitative
techniques. In The Oxford handbook of political methodology .
Tracy, S. J. (2019). Qualitative research methods: Collecting evidence, crafting analysis,
communicating impact . John Wiley & Sons.
