CASINO AND GAMING INDUSTRY PORTER FIVE FORCES ANALYSIS

Land-based, the riverboat and the Native American gambling are the most prevalent forms of casino gambling in the USA. The commercial casino was once regarded one of the biggest industries in the USA as it was providing employment to more than 37500 people earning about $13 billion in wages during the year 2009.  The actual entertainment industry of the USA drives a bigger share from the commercial casinos as around 25% of the total US adult population’s spending goes to them at least once a year. In addition, it contributes to a major portion of GDP in the USA with total revenues about $32.5 billion in 2009.  The states, in fact, enjoy their expansion and settlements as they not only provide employment opportunities for their inhabitants but also create a lot of businesses for local vendors and producers. The economies of more than twenty state of the USA are now much dependent on the entertainment and gambling as it has increased the business diversity by employing minorities and bought around $631 million products and services form producers and sellers and provided direct taxes of more than $5 billion (Howard S., ( 2010).

Overview of the CASINO AND GAMING INDUSTRY:

The global gaming and casino industry, that once in the era of 2005-7 was booming with double digits growth momentum and when global gaming revenues were about $87 billion, is now facing dwindling future prospects and uncertain growth. In fact, the Great Recession, which emerged with the subprime and credit crisis throughout the world, forced the gaming and casino revenues to shrink down to 4.7% in 2008.  The year 2009 was even worse as it saw the adverse pattern and growth was lower by 2.8% than that in 2008. The US witnessed fall by 3.4%, EMEA by 12.2% and Canada by 1.4% in 2009. In fact, these two crises of sheer fall in consumer spending and credit crunch have left huge pessimist signs on the future growth and profitability of the overall industry (Palenik M. L, (2011).

Michael Porter’s Five Forces Model:

The five forces model was developed in order to study the impact of these forces on an organization and particularly, gain competitive advantage leveraging these forces in a particular industry.  These models and ideas were developed during the period from 1979 to the mid-1980s so that organizations can better earn the return on investment than in order to gain a competitive edge in the industry sector (Thurlby, 1998).

 

 

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