Menu Close

An Insight Into the Valuation of Casinos

Some of the high-risk and business-intensive operations are carried out in casinos. They have tangible and intangible assets. Among the intangible assets are the workforce and the value of the license to operate the business. The intangible assets, of course, are not considered when an appraiser determines the value of the property. 

Such an appraisal is requested mainly owing to real estate tax assessment and condemnation. The individual states in the United States have different rules in this regard. However, most of them share the common themes of the Uniform Appraisal Standards for Federal Land Acquisitions.

The history and trends of casinos

I. Nelson Rose detailed the background and trends of casinos in his book Gambling and the Law. This book was originally published in 1986. In the book, he mentions that in the United States gambling is in its ‘third wave’. According to him, the first wave came during the period spanning the colonial period to the Civil War. This was the period of lotteries that were mostly influenced by the printing press.

The second wave occurred after the Civil War as a means to raise money for rebuilding by the South. The third wave began with the Great Depression when gambling was legalized in the state of Nevada. By 2015, commercial casino gaming was legalized by 22 states in the USA. The revenue generated from these casinos amounted to $38.3 billion at the time.

The casinos in the United States can be divided into four categories. They are commercial casino gaming, online casinos, limited stakes gaming, and tribal casinos. While the revenues from commercial casinos had been on the rise since 2009, the continued success was never guaranteed. The commercial casinos were faced with increased competition and ageing offerings in games and entertainment. 

With the onset of the COVID-19 pandemic, online casinos became immensely popular owing to lockdowns. As the casino players could not visit the land-based establishments, they turned to online casinos. Such casinos have great benefits for players, such as grand welcome bonuses and a large variety in games. For more information about online casinos, visit

The valuation of casinos

All the traditional methods used in the valuation of commercial properties are also useful in the valuation of casinos. They also involve certain obstacles that must be negotiated carefully by the appraiser. The comparable properties would be the sales of buildings that were used as casino establishments. Usually, the appraisers can arrive at a value through the income approach. 

They need not get into the business being conducted in the casino. Most of the time, there is a lack of substantial direct evidence of sale prices or property rents. This would lead anyone to conclude that the cost approach is most reliable for casinos. Depreciation is also a significant element in this process. 

The cost approach cannot always be put forward as a standalone method for valuing casinos. In most the cases, the appraiser must consider the total assets of the business. The sales and revenue derived from them are also considered. Based on these factors, the value of the casino can be derived.

Leave a Reply

Your email address will not be published. Required fields are marked *