ANOTHER COVID CONCERT CANCELATION
HOW IS THE INDUSTRY IMPACTED BY LOST REVENUE AND CANCELED CONCERTS?
Revenue from live music events and casino concerts are declining every day due to the deadly COVID-19 virus. Year over year gross revenue for all music events is forecasted to drop over 60% from the previously bustling 2019 entertainment segment (the glory days). The good news is, we are anticipating a vigorous rebound and are expecting sales and live event-related revenue to return to its normal 10%-12% rate of increase in 2021. If all goes well, predictions exceed $19 million for live concerts alone. In 2020 we would be fortunate to see half of that in ticket sales.
Today, analysts are suggesting a meek $7.5 million in sales by the end of December. Of course, we know casino entertainment is only a small fraction of the aforesaid revenue, but that doesn’t mean the butterfly effect isn’t simultaneously substantial. In fact, to prove our point lets take a look at one casino concert venue with a thousand seats and see what happens if you remove every concert for two months. On average most 1,000 seat venues have about an 80% attendance ratio (based on the first-hand experience over a decade). Also, a lot of casinos have two or more shows a weekend, so in total, we are going to assume that in this particular scenario, a given property is missing out on sixteen shows. Now, if 80% of 1,000 people are missing from the venue for sixteen shows, your casino venue will be losing out on business from 12,800 patrons (conservatively). Is that really all that bad though?
The answer is yes, and hell yes if you are a tribal casino. Here is the additional monetary breakdown/impact. A smart venue will comp players with an ADT (average daily theoretical win) of at least $1,000 – $4,000. For the sake of our assumption, we will say they are all worth $2,000. Additionally, if the venue is well oiled and profitable form ticket sales, they will only comp about ⅓ of the 1,000 seats. This means roughly 3,800 rated players are missing from all 16 shows. If you take an average $2,000 ADT and multiply it by the 3,800 comp players, you stand to lose $7.6 million coin-in. Surely the casino wouldn’t hold 100% of that, but you get the point. It is a lot for anyone’s business to miss out on. And, for native-owned casinos revenue generated from gambling accounts for nearly 100% of the tribe’s income. The keyword here is “tribe” as in hundreds or in some cases thousands of people who may be predisposed to certain physical, mental, and other spiritual illnesses brought on by intergenerational trauma and other historical wrongdoings that we won’t get into here.
The important part here is that the money is needed for the general welfare of a lot of people (inside and outside of the tribe) who may have little or no better opportunities or lifeline otherwise. Generally speaking, tribal casino revenue is only important if you and your native family depend on the casino revenue which is used for healthcare, educational support, and other vital life-changing necessities. For the average casino talent buyer, guest, or outsider individual that is non-native, the information regarding lost revenue is perceivably irrelevant and would appear to be worthless.
After all, it is easier for most people to comprehend what is happening with an online casino where the money is directly attributed to the means of a shareholders’ end. The public often fails to realize that revenue from tribal casinos is also used to help sustain generous donations to a plethora of nonprofits, for-profit public schools, small businesses, food banks, shelters, and tens of thousands of other useful social-economic pillars of society. Anyway, I digress. The bottom line is, when it comes to casino entertainment, an empty concert venue also means an empty casino floor.
How are casino talent buyers and concert venues going to survive?
The short answer is they are not going to. Sadly, many non-gaming concert venues have already closed their venue doors or are going to. A lot of casinos can withstand the short-term without concerts, but long term it will for sure have a detrimental impact if the casino floor doesn’t maintain it’s historic volume to produce them. Like all industries, the pioneers will likely outlast the devastating downturn, but the up and coming buyers will cease to exist. At least until a later time. Luckily, talent buying has low overhead, start-up costs, and can be done by just about anyone who has had enough time to build stable relationships in the entertainment industry.
HOW MUCH OF YOUR BET DOES THE CASINO HOLD ON A CONCERT NIGHT ANYWAY?
The answer to that question is, it depends. The casino hold percentages will fluctuate from casino to casino, state to state, year over year, and month to month. Sometimes it goes up, and other times it goes down. Sure we can talk about how to try and beat table odds or how to skillfully generate jackpots but the truth is, it doesn’t matter. It’s not easy to outsmart the preset/predetermined casino hold functions on slots or table games. These hold percentages are put in place for two reasons; control and profit (which are arguably the same thing). Let’s not forget the odds will forever be in the house’s favor. I mean, they do have more money, so you’ll probably never be able to play against them long enough to sway the odds. Long story short, aside from counting cards (which is only successful sometimes), you won’t be able to make outsmarting the system a profession. Your best bet is to just have fun and enjoy the ride. With so many variables and unknowns, casino concert operators should never count your eggs before they hatch. If you are going to hire Josh Turner to play at your tribal casino for $50,000, you better be able to scale the tickets for a profit without considering any hypothetical gaming revenue.
In the end, the odds are most casinos will reopen eventually. For the sake of the tribes in Indian country, I hope so. To see the first nation’s people continuing to suffer would be difficult for anyone who is conscious to endure. On a side note, if your casino concert venue has already canceled all events through the end of the year, then it may be a good time to rethink strategy. In an ideal world, your venue will eventually regain momentum with proper planning. Hopefully, by that time the casino industry will have generated some decent revenue, and concert-goers will actually be interested in coming to shows. In these uncertain times, however, everything is well, uncertain. While many employees are worried about their health and safety, the public is lining up around the block to get inside the most open casinos across the country. If you are looking for a comprehensive guide to what properties are open or just want more detailed information regarding the pandemic impact and Indian country There are countless resources for anyone that wants to keep up to date on what is happening. With over 500 plus tribal casinos and concert venues in Indian country, it can be difficult to track all the info down. One of our favorite resources is the almighty 500 nations website. This is the go-to place for all things tribal casinos.