Slowing Slots

Takeaway: High-margin slot machines are contributing a lower percentage of total gaming revenue, which is a worrying trend for the gaming industry.

Revenue from high-margin slot machines as a percentage of total gaming revenue has been declining since April 2009 on the Las Vegas strip. This is worrying given the higher margins of slots versus table games.

Additionally, the younger generation - post baby-boomers - aren't playing slots, suggesting that this overall trend will continue. MGM is particularly vulnerable to the decline in the contribution of slot machine revenues.

Here's a chart that shows this trend over the past few years.

 

Slowing Slots - gaming