“Life is a series of hellos and goodbyes/ I’m afraid it's time for goodbye again….”
- Billy Joel
Beyond all the numbers and forecasts we use to value stocks, lie the palpable realities that signal us to judge just how aligned it is with the realities of where and how it does business. In the casino industry, it's no great revelation to repeat the old saw applied to the secrets of real estate success: location, location, location. In this age, Amazon (AMZN) has become the singular arbiter of which retail businesses live or die, so we may tend to diminish the notion about the supremacy of location. But that does not apply in gaming anywhere as much as it may with your average discount or department store ravaged by two clicks ordering on Amazon.
Despite the surging growth of online gaming in all forms, casinos are still essentially brick-and-mortar businesses for most people. The need for escape or getaway from the everyday includes a respite from the humdrum. And that’s what casinos sell. So location still counts. And it especially counts now as the massive population shift now underway in the US is one of the single most potent propellants of business success going forward.
Nowhere is this more dramatic than the exodus from the big kahuna state of California to its neighbors. Since 2018, 156,000 Californians, fleeing rising taxes, quality of life issues, central city decay, have left for neighboring states. Highest recipient communities among them are in Nevada and Colorado, the number one and two fastest-growing states in the nation. Just last year, 38,000 people left the golden state. That population has to some extent been replaced by the growing numbers of immigrants replacing native populations. But on balance, demographers now believe that California has entered a period of sustaining and rapidly-speeding population decline.
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