It’s the news the traditional casino industry doesn't want to hear.
CDC Gaming reports that the latest study from Jefferies Equities Research shows that the number of people who visit casinos dropped by nearly 5% in December.
In a note to investors, Jeffries analyst David Katz wrote: “Overall casino foot traffic in December, which included one less weekend relative to last year, was down 4.8% year-over-year.”
Katz noted that this month's traffic levels are unchanged to slightly down for Boyd Gaming, Churchill Downs, Caesars Entertainment, Monarch and Penn Entertainment.
Which States Saw Biggest Traffic Declines?
When you compare states, you see a disturbing trend. For instance, foot traffic dropped in Ohio by 6.9% and in Pennsylvania by 6.8%.
Atlantic City saw a decrease of more than 19% (19.2%) compared to 2019 levels and a 13.6% decrease from the previous year. In Illinois, foot traffic was 17.4% lower than in 2019 and remained flat compared to last year.
How Is Casino Foot Traffic Determined?
Although Jeffries’ methods are unclear, to determine casino foot traffic, casinos often use "people counting" systems equipped with sensors at entrances, which could include:
- Sensor Technology:
Casinos often use infrared sensors at entry points to count individuals as they enter. - Overhead Systems:
For larger entrances, overhead sensors employ thermal imaging to count visitors based on body heat. - Data Analysis Software:
The gathered data is processed using software that helps operators analyze trends, identify peak times, and compare traffic patterns across various days and times.
These sensors track how many people enter and exit, providing live data on visitor flow. The systems might include infrared sensors, thermal imaging, or video cameras, enabling a detailed analysis of peak hours, high-traffic areas, and overall visitor numbers.
Why Is It Important To Monitor Casino Foot Traffic?
There are multiple reasons why casinos find monitoring their visitor count both useful and important, including:
- Staffing Optimization:
Casinos can adjust staffing levels based on current foot traffic data to ensure adequate coverage during busy times, reducing labor costs when traffic is low. - Marketing Insights:
Analyzing foot traffic patterns helps casinos determine which marketing campaigns successfully attract visitors. - Capacity Management:
Monitoring occupancy levels allows casinos to comply with regulations and prevent overcrowding.
All of this information is used to make daily decisions at casinos nationwide.
Casino Visitor Trends Are Pointing Up
The good news is that the downward trend is not expected to last long.
“We anticipate trends will continue to stabilize and potentially improve in 2025, as comps have started to ease versus prior-year levels,” Katz said.
Another study appears to back that up. A 2024 Statista survey revealed that 41% of U.S. adults visited casinos in the past year, marking an 8% increase from the previous year and the highest rate since records began in 2011.
According to Katz, the volume for the month was 10.5% less than in 2019, which is a slight improvement compared to the shortfall seen in November 2019.
Meanwhile, the market continues to be cautious about how macroeconomic trends might affect earnings, particularly due to the uneven challenges posed by rising costs in insurance, utilities, and labor.
In short, there will be a lot to look for and track in the new year.
