NEVADA ECONOMY: STILL ON A LOSING ROLL - Business

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Oct. 10, 2008
Copyright © Las Vegas Review-Journal

NEVADA ECONOMY: STILL ON A LOSING ROLL

Eight months of declines put state's casino win at 2006 levels

By HOWARD STUTZ
REVIEW-JOURNAL

Rusty Ashby of North Charleston, S.C., throws dice at a table at The Mirage. Casinos in Nevada continue to see their gaming win fall.
Photo by Jessica Ebelhar/Review-Journal

On the day the Dow Jones industrial average reverted to 2003 numbers, Nevada's casino win fell back to 2006 levels.

Gaming revenues statewide in August were $934.1 million, the lowest monthly total since June 2006, when casinos won $921 million from gamblers. The August figure was the eighth straight monthly gaming revenue decline.

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The numbers were released Thursday by the Gaming Control Board. The 8.1 percent statewide decline, compared with the $1.016 billion casinos won from gamblers in August 2007, was not unexpected.

"It's no different than what we were talking about six months ago," said Frank Streshley, the control board's senior research analyst. "People are still coming to Nevada, but the spending is way off from what it was a year ago. The figure is also surprising because August is typically one of our busiest months."

On the Strip, gaming revenues were $494 million, a 7.4 percent decline from $533.6 million a year ago. Gaming analysts said lower table game holds offset an increase in table game wagering.

"The Las Vegas Strip's results were affected by weaker table hold and lower slot revenue," Wachovia gaming analyst Dennis Farrell Jr. said in a note to investors. "Consumers continued to reduce spending budgets."

For the first eight months of 2008, gaming revenues are down 6.8 percent, the largest decline since the state has been keeping records since 1984. Gaming win has also declined nine out of the past 10 months, while the state has recorded gaming revenues of less than $1 billion for four straight months. On the Strip, gaming revenues are down 6.6 percent compared with the first eight months of 2007.

"We expect 2008 and 2009 to be a transitional period for most segments of the Nevada gaming market, as the state's residents adjust to higher levels of unemployment and declining household wealth and out-of-state residents reduce visitation frequency and spend per visit to Nevada," Farrell said.

The August gaming revenues also hurt the monthly gaming tax collections. The state collected $54.6 million based on the monthly revenue totals, a decrease of 6.2 percent from $58.2 million in the same period last year.

Gamblers wagered $2.6 billion statewide on table games, 10 percent more than a year ago, including $714 million on baccarat. However, the lower hold percentage kept the revenues from table games at $322.5 million, a 0.4 percent increase compared with August 2007.

The slight gain was offset by slot machine wagering. Gamblers fed $10.9 billion into slot machines, 4.4 percent less than a year ago. Slot revenues were $598.6 million, down 12.3 percent.

Streshley said slot machine wagering is considered an economic indicator of the gaming industry's overall health.

"In August, gas prices were starting to come down, but consumer confidence was still very low," Streshley said. "With all this other stuff happening with the economy and the markets declining, it's a troubling time."

Gaming revenues fell throughout Clark County, which reported a 9.4 percent decline. Downtown casinos saw gaming revenues fall 9.5 percent, gaming revenues on the Boulder Highway were down 22.4 percent and gaming revenues in North Las Vegas were off 17.8 percent.

The Boulder Highway market could see a boost in the future with the late August opening of the Eastside Cannery, although Streshley said the casino could just be taking market share from the neighboring competition.

Casinos in Mesquite won $10.8 million during the month, a 2 percent increase and the only location in Clark County that showed an increase.

Casinos in Washoe County recorded a 14th straight month of gaming revenue declines, but Reno casinos showed a nearly 1 percent increase, the first time in nine months that gaming revenues grew in the Northern Nevada city.

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871.

Nevada Gaming Revenues

	2007	2008	% Change
January	$1,117,140,888	$1,064,089,670	-4.75
February	$1,056,372,522	$1,014,823,745	-3.90
March	$1,054,779,360	$1,038,751,381	-1.50
April	$1,053,249,753	$1,000,112,698	-5.05
May	$1,143,445,674	$969,943,776	-15.20
June	$959,985,424	$949,316,713	-1.10
July	$1,145,965,863	$997,344,346	-12.97
August	$1,016,480,268	$934,120,078	-8.10
Eight months	$8,547,419,752	$7,968,502,407	-6.80

SOURCE: Nevada Gaming Control Board

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Please enter your name Name: Please enter your email Email: Please enter a comment COMMENTS : (word count limit is 300) You have reached the maximum number of words allowed Current Word Count: Note: Comments made by reporters and editors of the Las Vegas Review-Journal are presented with a yellow background. reg guy wrote on October 10, 2008 01:09 PM: So, will 'working ladies' be lowering their rates? Hey money is tight, and going through the motions, (dinner, movie, flowers etc.), just aint worth it. it seems like you could spend less and get a sure thing, ladies?, (Working ladies that is) LittleBird wrote on October 10, 2008 11:57 AM: At least they get to feel a little of the pain taxpayers are feeling.Bet they haven't spent 700B like we were forced into.It's not over by a far cry.I just can't seem to feel much sympathy for all these greedy b****ds.What goes around,comes around. no more wrote on October 10, 2008 11:19 AM: David Jones: That's exactly how I feel. No reason to throw a little money away if I'm not having some fun while I'm doing it. ex gambler wrote on October 10, 2008 10:55 AM: Also, the casinos are still making money--just not the obscene amounts they would like to make. That was quite evident when Stations bought another parcel of land to add to its Inspirada parcel. Stations is laying off employees, cutting employee perks and benefits, but it has enough money to make further investments in an unstable market. Still think that Stations is a top 100 company to work for? Maybe the propaganda machine, at Stations, still believes so. hilobamacaine wrote on October 10, 2008 10:54 AM: it is all the "free"drinks they give away!! David Jones wrote on October 10, 2008 10:41 AM: This isn't surprising at all. I can still afford to go to vegas and gamble the night away but why should I? I can feel the greedy money sucking vibe as soon as I enter most of the places now. It's not fun anymore. The only reason to shovel money at the casino is to have fun and I'm just not feeling it. The slot machines are ridiculously cheap now and suck $20 a spin on some penny machines or $200 a spin on some quarter machines. Give me a break. I'll go to an indian place where I can still have fun and felt wanted/welcomed. Mauna loa wrote on October 10, 2008 09:54 AM: City Center is in real trouble. They still need a little financing to complete it. I know they will do that. But, what happens after that. I'm all for the sports salary to tank. I just don't understand what drives the white stupid moronic fool to spend hundreds of thousands of dollars to watch a grown man run with a little brown ball, or a tall freak put another ball inside of a hoop. How about watching men roll a little white ball in the grass. Millions for that. Is it just me. How about watching two african americans fight each other, and spend thousands for a front roll seat. It's just the moronic white people doing that. Unreal. Maybe this melt down will be good for the USA. Maybe we can send a family a five to the ball game for under $75, with good seats. Just maybe. johninmontana wrote on October 10, 2008 09:11 AM: Think it is bad now? Just wait until City Center opens and it fails to attract anyone other than curiosity seekers. The billions that have been wasted will never be recovered. Talk about short sighted management! Michael Wertman wrote on October 10, 2008 08:11 AM: The Vegas economy is built on human stupidity and irrational thinking: it'll always be safe. snowflake wrote on October 10, 2008 07:43 AM: Jack, I agree with your assumption that Las Vegas needs to retro fit itself by turning back to the good old days when the boys owned the joints and knew how to give to the cutomers. They gave food and rooms; as everyone knows, gamblers want soemthing for the money they give away gambling. I, too, hope that the corporate goons who think they know how to own and operate a casino wake up to the fact that their goals shold be to make Las Vegas attractive again to the middle class. Las Vegas used to be recession proof because of the good deals tourists could get. Las Vegas needs to go back to that. Also, the casinos are still making money--just not the obscene amounts they would like to make. Read All Comments