Introduction
A casino does not need to win any single bet. Every game it offers carries a built-in house edge, a small statistical advantage that guarantees the casino keeps a predictable share of the money wagered once enough bets are placed. Individual players win and lose; across millions of spins and hands, the casino's share settles close to the edge the game was designed to produce, which is why volume of play matters more than any single result. That makes a casino's gaming revenue a function of how much its customers bet and how long they play, which is why operators invest so heavily in getting people through the door and keeping them there. The same edge now operates online, through the betting apps covered in online sports betting and iGaming economics, but the physical casino remains the industry's profit base.
Modern casino resorts earn much more than gaming revenue. At MGM Resorts' Las Vegas Strip properties, net revenues were about $8.44 billion in 2025, and casino revenue made up only about 24% of the total, with rooms, food and beverage, and entertainment and retail providing the rest, according to MGM's Form 10-K. The segment earned earnings before interest, taxes, depreciation, amortization and rent (EBITDAR) of about $2.86 billion, a 33.9% margin. This article explains how casinos measure gaming revenue, how non-gaming revenue fits in and how the main markets and business models differ.
Casino Metrics: Drop, Handle, Hold and Win
Casino reporting uses its own vocabulary, and the numbers mean different things for slot machines and table games.
- Gross Gaming Revenue (GGR)
The amount a casino wins from customers' gaming: total wagers minus winnings paid out. Gross gaming revenue is the basis for most gaming taxes and the standard measure of a gaming market's size, though operators usually report net revenue after deducting promotional allowances such as free play.
Slot machines
For slots, the amount wagered is handle, and the share the casino keeps is the hold, which for a machine is set largely by its design. Because slots hold a predictable share over many plays, slot revenue is steady. Operators track win per unit per day: total slot win divided by the number of machines and days, a measure of how productive the slot floor is.
Table games and the role of luck
For table games, casinos measure drop, the cash and markers exchanged for chips, and the hold percentage, the share of drop the casino keeps.
- Hold Percentage
The share of the amount wagered or exchanged for chips that a casino keeps as win. For slots, hold is close to the machine's theoretical setting; for table games, actual hold swings from quarter to quarter with players' luck, so operators and analysts compare reported hold with its expected or theoretical level.
Table hold is volatile, especially in high-limit play, where a few large bets can swing a quarter's results. Las Vegas Sands, for example, said high hold on rolling play added about $45 million to Marina Bay Sands' adjusted property earnings before interest, taxes, depreciation and amortization (EBITDA) in the fourth quarter of 2025. Analysts therefore normalize results to a theoretical hold before judging a casino's underlying trend.
Rolling chip versus mass
Asian casino operators split table play into two very different segments. Rolling chip play, historically known as VIP play, involves very large bets by a small number of high rollers, often with commissions or rebates paid to the player or an intermediary, so its volumes are huge but its margins thin and its results volatile. Mass play covers the much larger number of ordinary players at standard tables, who bet less but generate higher margins and steadier results. Operators and analysts report and value the two segments separately, and a shift from rolling chip to mass, as happened in Macau, can lower revenue while raising profit.
From gross gaming revenue to net revenue
Operators report gaming revenue after deducting the cost of promotional allowances and free play, such as free slot play and discounts given to players, so their net casino revenue is lower than the gross gaming revenue regulators publish. The gap has grown as operators compete with free play to win and keep customers. Bankers compare operators on a consistent basis and watch promotional intensity, since a casino that buys revenue with ever more free play may be growing gross win without growing profit.
Win per unit per day also varies enormously by property. The table below shows the reported figures for some of Las Vegas Sands' resorts for 2025, exact as reported in its full-year results.
| Property (Las Vegas Sands, 2025, exact) | Table games win per unit per day | Slot win per unit per day |
|---|---|---|
| Marina Bay Sands | $20,793 | $1,023 |
| The Londoner Macao | $12,381 | $546 |
| The Venetian Macao | $9,855 | $347 |
| Sands Macao | $5,686 | $244 |
Non-Gaming Revenue and the Integrated Resort
An integrated resort combines a casino with hotels, restaurants, bars, nightclubs, theaters, shopping, convention space and spas. Non-gaming revenue diversifies the business and draws visitors who might gamble little or not at all, from convention attendees to tourists on a weekend break.
- Integrated Resort
A large destination property that combines a casino with hotels, restaurants, entertainment venues, retail, convention and exhibition space and leisure attractions under one operator. Governments in Asia and elsewhere have used the integrated resort model to tie casino licenses to tourism and non-gaming investment.
The mix at MGM's Strip resorts in 2025 shows how far this goes: of about $8.44 billion of net revenues, rooms provided about 34%, food and beverage about 27%, entertainment, retail and other about 15% and casino about 24%. The hotels ran at 92% occupancy with an average daily rate of $249 and revenue per available room of $229, both below the prior year.
Comps and loyalty
Casinos use their non-gaming businesses as marketing tools. Complimentaries, or comps, give valuable players free rooms, meals and shows in proportion to their expected gaming value, and loyalty programs track every player's play across the operator's properties. That data lets operators target offers precisely, deciding how much free play or how many free nights each customer is worth. The cost of comps and free play is real, and operators that over-reward players can buy revenue at a loss.
Conventions and events
On the Strip, conventions and major events fill hotel rooms midweek, when leisure demand is weaker, and support high room rates. Sports events, concerts and residencies draw visitors who spend across the resort. The economics of the shows themselves are covered in the TMT guide's sports and live entertainment economics, but for a casino operator, events are a way to keep rooms full and give visitors reasons to return.
The cost base of a casino resort
A casino resort is expensive to run, and most of its costs are fixed in the short run. The main lines are:
- Labor: dealers, hotel staff, cooks, security and surveillance, often unionized in large markets
- Gaming taxes: a share of gross gaming revenue, sometimes the largest single cost
- Marketing, comps and free play: the cost of attracting and rewarding players
- Cost of food, beverage and retail goods, which scales with non-gaming revenue
- Utilities, maintenance and insurance for very large buildings that operate around the clock
- Rent, for operators that lease their properties from real estate owners
Because so much of this is fixed, casino earnings are highly operationally leveraged: a small change in visitation or spending per visitor moves profit sharply. That is why analysts focus on margins by segment and on rent-adjusted earnings, measured as EBITDAR, a metric covered in the Valuation guide's retail and consumer valuation primer. Large resorts also need regular capital spending to renovate rooms, restaurants and casino floors, since a tired property loses visitors to newer competitors.
Las Vegas Strip vs Regional Gaming Markets
Casino markets fall into two broad types with very different economics: destination markets and regional markets.
| Las Vegas Strip | Regional markets | |
|---|---|---|
| Visitors | Fly-in tourists, conventions, high rollers | Drive-in locals and nearby residents |
| Revenue mix | Mostly non-gaming | Mostly gaming, especially slots |
| Competition | Many resorts close together | Often limited by state licensing |
| Capital needs | High: large resorts, frequent renovation | Moderate |
| Sensitivity | Travel, conventions, airline capacity | Local economy and nearby competition |
Regional casinos serve customers who live within driving distance and visit often. They depend mostly on slot revenue, offer fewer amenities and face limited competition where states issue few licenses. MGM's regional operations had net revenues of about $3.77 billion in 2025 with a segment EBITDAR margin of 30.8%, steadier than the Strip's. The Strip, by contrast, depends on visitors flying in and on the health of the convention business, so it is more exposed to travel trends, but it can charge premium prices when demand is strong.
Gaming taxes and licensing
Gaming is taxed far more heavily than most businesses, and gaming tax rates vary widely by jurisdiction. Some states tax gaming revenue at modest rates, while others take a large share, which makes the same casino much more profitable in one state than another. Licenses are limited and valuable: a state that issues few licenses protects existing casinos from new competition, while a state that adds licenses can cut nearby casinos' revenue. Bankers model each property against its own tax rate and competitive pipeline.
Regional competition and new supply
Regional casinos face competition mainly from new licenses and from casinos in neighboring states. When a state legalizes gaming or adds licenses close to an existing market, nearby casinos can lose a large share of their customers within a year of the new property opening. Regional operators therefore track planned openings, legislative changes and the expansion of tribal gaming in their markets closely. In return for that risk, the best regional properties enjoy loyal, local customers and very predictable slot revenue, and many have been sold to gaming real estate trusts and leased back, a structure covered in casino deals: master leases, licensing and valuation.
How bankers analyze a casino property
Property-level analysis turns reported results into normalized earnings that can be compared across markets and over time, and it follows a consistent analytical sequence.
Split revenue
Separate slots, tables, rooms, food and beverage, entertainment and other revenue.
Normalize hold
Adjust table and high-limit results to theoretical hold to remove luck.
Net out promotions
Deduct free play and comps to compare gaming revenue on a consistent basis.
Apply the tax and rent
Model the jurisdiction's gaming tax and any lease payments to a property owner.
Map the competition
Add planned openings, new licenses and nearby tribal casinos to the forecast.
Macau, Singapore and Integrated Resorts Abroad
Outside the US, the largest casino markets are in Asia, where governments have used concessions and licenses to limit the number of operators and to require tourism investment in return.
Macau: concessions and the shift to mass
Macau, the only part of China where casino gambling is legal, is served by a small number of concessionaires, including affiliates of Las Vegas Sands, MGM Resorts and Wynn. Its market changed sharply when VIP gaming, organized through junket operators who brought high rollers and extended them credit, shrank under tighter regulation, leaving operators focused on mass-market players. MGM China's net revenues rose 11% to about $4.46 billion in 2025 at a 27.0% margin, and Las Vegas Sands' Macao operations earned adjusted property EBITDA of about $2.31 billion.
Macau's concessionaires committed to non-gaming investment and to attracting international visitors as conditions of their concessions, which pushes operators to keep adding hotels, entertainment and attractions. The market is also closely tied to policy on the mainland, from visa rules for visitors to economic conditions in China, which makes its results more volatile than a protected license alone would suggest.
Singapore: two licenses
Singapore allowed two integrated resorts, Marina Bay Sands and Resorts World Sentosa, under a licensing model designed to promote tourism. The structure limits competition and supports very high returns: Marina Bay Sands earned adjusted property EBITDA of about $2.92 billion on net revenue of $5.59 billion in 2025, a margin of about 52%. Singapore also taxes and controls access for its own residents through an entry levy, so the resorts depend heavily on international visitors and premium players.
New markets
Other governments, including Japan and the United Arab Emirates, have approved integrated resorts, and US operators compete for those licenses because of the protected returns they can offer. New markets require very large upfront investment and long construction periods before any revenue arrives, so operators often partner with local companies and finance the projects with a mix of equity and project-level debt.
Tribal Gaming: Compacts, Management Deals and Financing
In the US, a large share of casino gaming is run by Native American tribes under the Indian Gaming Regulatory Act (IGRA) of 1988, which created a federal framework of tribal sovereignty over gaming combined with federal oversight of its management and finances.
Compacts and gaming classes
The act divides gaming into classes: traditional games, bingo-style games and casino-style games such as slots and table games, the last of which require a tribal-state compact negotiated with the state, often including revenue sharing with the state in exchange for exclusivity in parts of its territory. Tribes own their casinos, and the income funds tribal governments and services such as health care, education and housing.
Management contracts
Many tribes, especially when opening a first casino, hire commercial operators to develop or run their casinos under management contracts, which the National Indian Gaming Commission (NIGC) must approve. Management fees are capped at 30% of net revenues, rising to as much as 40% where the capital investment and income projections justify it, and contracts run for five years, or up to seven with similar justification, according to Tribal Gaming's explainer on IGRA management contracts. An unapproved management contract is void, and consulting or development agreements that give an outside firm management-level control can be treated as management contracts too.
Financing tribal casinos
Tribal casinos are financed differently from commercial ones. Because tribes are sovereign governments, lenders cannot simply foreclose on tribal land, so tribal casino loans and bonds rely on the casino's cash flows, waivers of sovereign immunity for the financing and covenants negotiated with the lenders. For commercial operators, tribal gaming offers management and development fees without owning the property, while tribal casinos are also significant competitors in many regional markets.
Commercial operators and tribal partners
Commercial casino companies work with tribes in several ways. Some sign management contracts to run a casino for a fixed term; others provide development services and financing for a new property, then step back once it opens; and some license their brands and loyalty programs to tribal casinos, letting players earn and redeem rewards across both. As tribes have built their own management expertise, many have taken operations in-house when contracts expire, and the largest tribal gaming enterprises now operate casinos outside their own reservations and compete with commercial operators for licenses.
Gaming Equipment Suppliers: Slots, Tables and Systems
Behind every casino floor are the gaming suppliers that make and supply its machines and systems. Slot manufacturers design games and cabinets; table game suppliers provide proprietary games and shufflers; systems providers run the casino management, loyalty and payment technology; and cash-access and fintech businesses handle the movement of money on the floor.
Selling versus participation
Suppliers earn money in two main ways. They sell machines to casinos outright, earning a one-time margin, or they place games on a participation basis, sharing in the revenue each machine generates. Participation revenue is recurring and tied to the game's popularity, so investors value it more highly than one-off sales, and suppliers compete to develop hit games that casinos want on their floors.
Tables, systems and cash access
Beyond slots, suppliers provide proprietary table games and side bets that casinos license for a monthly fee, automatic card shufflers, casino management systems that track every machine and player, and the cash-access technology that lets players withdraw funds on the floor. These businesses are smaller than slots but highly recurring, since casinos rarely switch systems once installed, and they give suppliers data and relationships that support slot sales. Regulators must certify every game and system in each jurisdiction, which raises barriers to entry and protects established suppliers.
Consolidation among suppliers
The sector consolidates through large deals, as scale in game development and distribution matters more each year. Apollo-managed funds completed their acquisition of International Game Technology's gaming and digital business together with Everi in July 2025, in a transaction valued at about $6.3 billion, combining a slot maker with a fintech and cash-access business and paying Everi shareholders $14.25 per share and IGT about $4.05 billion in gross cash proceeds; the combined business kept the IGT name, while the remaining lottery company was renamed Brightstar Lottery, according to iGaming Business.
For casino operators, the property itself is often owned by someone else. Many US casino operators have sold their real estate to gaming real estate investment trusts and lease it back under long-term master leases, a structure covered from the landlord side in the Real Estate guide's gaming REITs. For a coverage banker, a casino is best understood as several businesses sharing one building: a gaming operation with a statistical edge, a hotel and restaurant business that markets it, and a regulated license that protects both.
