Global gaming revenues to keep rising

Jun 27, 2006 5:43 AM

Despite predictions of an economic slowdown, gaming revenue worldwide is expected to climb 8.8 percent annually from $82.2 billion last year to $125 billion by 2010, according to a report from Pricewaterhouse Coopers LLC.

Fueled by new casinos in the Chinese gambling enclave of Macau, the Asian-Pacific region will grow fastest at 14 percent annually, surpassing revenue from the region encompassing Europe, the Middle East and Africa, when it hits $23 billion by 2010.

That’s still less than one-third the amount expected to be raked in by casinos in the United States, the world’s largest gambling market. Over the next four years, gambling revenue should grow by 6.9 percent per year, from $53.4 billion last year to $74.5 billion in 2010,

The rate of increase should be even greater in Nevada, where gambling revenues are expected to grow 8.2 percent annually from $11.7 billion to $17.3 billion, boosting the state’s share from 21 percent to 23 percent of the U.S. gambling market.

Tribal casino operators should increase their share of the U.S. market from 42 percent to 43 percent, growing from $22.7 billion to $32.5 billion by 2010. (See accompanying story on Page 5.)

Casinos in Atlantic City are expected to see revenue inch higher from $5 billion to $5.8 billion, as its share falls from 9 percent to 7 percent of the U.S. market, mostly because of increasing competition from new slot machine operators in surrounding states such as Pennsylvania and New York.

"The slot parlors are moving in," said Mary Lynn Palenik, Pricewaterhouse Coopers’ director of entertainment and media practice.

Excluding the United States, where online gambling is illegal, revenue from bets placed on the Internet globally are expected to double, from $5.1 billion to $11.4 billion by 2010.

While online gambling is experiencing rapid growth, more important is the expansion of legalized casino gambling in some markets, Palenik said.

Since handing out new licenses in 2002, Macau’s gambling market has exploded. Its revenues are expected to climb 16.1 percent a year from $5.5 billion in 2005 to $11.6 billion in 2010.

Moreover, favorable gambling legislation passed in the United Kingdom last year is expected to spur revenue growth of 16.8 percent a year from $3 billion in 2005 to $6.6 billion in 2010.

Also, likely casino legalization in Japan, Taiwan and Thailand, as well as a new casino in Singapore, would add another half a billion by 2010.