NEVADA ECONOMY: Casino revenue falls - Business

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Apr. 08, 2009
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NEVADA ECONOMY: Casino revenue falls

February gaming totals are lowest since 2004 for state, Strip

By HOWARD STUTZ
LAS VEGAS REVIEW-JOURNAL

GAMING REVENUE
• State -18%
• Strip -23%

TOURISM -8%

AVERAGE DAILY ROOM RATE -22.9% / $99.25

People walk the Strip in front of Paris Las Vegas. Data show fewer visitors to Las Vegas and less gaming revenue for casinos in February.
Photo by Jeff Scheid.

Casino revenue statewide continued a 14-month downward spiral in February. But there was one bright spot in the avalanche of negative numbers -- gaming tax collections increased for the first time in seven months.

Throughout Nevada, gaming revenue fell more than 18 percent during February and more than 23 percent on the Strip, figures released Tuesday by the Gaming Control Board show. The raw numbers -- $839.5 million statewide and $427.4 million on the Strip -- were the lowest single-month gaming revenue totals since 2004.

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For the first two months of 2009, gaming revenue statewide is off 16.3 percent compared with 2008 while Strip gaming revenue is down almost 19 percent.

"As expected, results were soft," JPMorgan gaming analyst Joe Greff told investors.

However, based on February's taxable gaming revenues, Nevada collected almost $65.1 million in gaming taxes, a 22.6 percent increase compared with almost $53.1 million for the same period a year ago. For the fiscal year, gaming tax collections are off 16.3 percent compared with fiscal 2008.

Control board senior research analyst Frank Streshley said the 2009 calendar affected gaming revenues and the tax collection accounting methods. Revenues generated in January by high-end customers during Chinese New Year and Super Bowl weekend were settled in February, which affected tax collections. Both events crossed over between the two months.

"A substantial number of markers that were issued in January were paid in February," Streshley said. "While the revenues were recorded in January, the taxes are recorded in the month the markers are paid. Customers are different. Some won't settle markers for a few months while others will settle up at the end of a trip."

During February, the statewide casino win of almost $839.5 million from gamblers was down from almost $1.145 billion won a year ago. The figure was the lowest statewide one-month total since July 2004, when casinos recorded $813 million in gaming revenues. February's 18.1 percent decline was the third largest monthly decline in state history, following a 22.3 percent drop last October and an 18.9 percent decline last December.

On the Strip, casinos won $427.4 million, down from $558.3 million a year ago. The figure was the lowest single month total since November 2004 when casinos won $426 million. It was the second-largest single month drop ever, trailing only the 25.7 percent drop posted last October.

Wachovia gaming analyst Dennis Farrell Jr. said the uncertain economy continues to curtail discretionary spending by consumers.

"We continue to believe that 2009 could be one of the most agonizing years Las Vegas Strip operators have ever experienced with regard to year-over-year (cash flow) declines," Farrell told investors.

Streshley blamed calendar differences between February 2008 and February 2009 for much of the decline. Last year was a leap year and Feb. 29 fell on Friday, which helped give the month a slight boost. He said the extra day can mean anywhere from a 3 percentage point to 5 percentage point increase in gaming revenues.

"One day may not seem like a lot, but the one extra day falling on a Friday does make a difference," Streshley said. "By all means, this wasn't a good month, but it was actually better than we expected."

Gamblers wagered $9.1 billion on slot machines, a decline of 15.4 percent compared with a year ago, and $2.1 billion on table games, which was down 32.3 percent compared with February 2008.

One boost came from wagering on the Pittsburgh Steelers' 27-23 win over the Arizona Cardinals in Super Bowl XLIII. Casino sports books generated $6.7 million in gaming revenues vs. a loss of $2.6 million from the 2008 Super Bowl.

Deutsche Bank gaming analyst Bill Lerner said Las Vegas visitors are just not spending the same amount of money on gambling they have in the past. Reduced hotel room rates and other incentives are starting to drive visitation but not spending.

"It's going to take time to recover," Lerner said. "These companies have done as much as they can to cut expenses to mitigate declining revenues."

Not all areas of Clark County suffered during the month. Gaming revenues were up almost 22 percent in North Las Vegas, due mainly to the November opening of Aliante Station. The Boulder Strip and Mesquite recorded monthly gaming revenue increases of less than 1 percentage point.

Washoe County, which includes Reno, recorded its 20th straight month of gaming revenue declines.

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

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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. ex gambler wrote on April 08, 2009 01:09 PM: I wouldn't care if they cut back on restaurant comps. The food in most casinos suck, as it is prepared by immigrants working for minimal wages. dob wrote on April 08, 2009 12:32 PM: GHM Look where the increasing costs are coming from it’s not the big bad business owners that the Democrats are telling you it is. It is the Democrats regulation’s and proposed and new taxes. Keep voting Democrat, and blaming others. Hat Trick wrote on April 08, 2009 12:26 PM: Patrick impression All you repubs are ignorant a tax increase would solve this problem and increase tourism. If you weren’t ignorant you would see something something like Cuba or China where everything is happy and fun and realize higher costs help not hurt business. If you don’t realize those facts and lower the price of everything despite increasing costs to … my hero Obama will fire you and run your business 10 times better that you did. Because we are flawless élites that know how to take care of you better than you do, we are not failures at business we chose not to compete in the real world because it wouldn’t be fair to you simpletons. Try this on for size O B A M A king of America for life like you simpletons tried to make Ronnie raygun the worst prez ever PS I am still not paying the $100 helen weils wrote on April 08, 2009 11:07 AM: Hey, teacher, I want my piece of the pie too. Sooooo, I'm applying for complete disability for me and my husband for 'STRESS'. I won't have to work anymore or pay taxes. In this environment it makes a lot more sense than paying more taxes to support you! Hey business owners! Apply for disability! Heck, I saw a guy last week that is on full disability for some "mental condition" he made up. I can certainly prove STRESS! I'm getting me a lawyer and becoming a Dummycrat so I can whine all day long and collect money. Feed me, clothe me, lift me, carry me, clean my house, do my laundry. I'm stressed out!!!! WAAAAAAA! WE ARE EXPERIENCING THE DEATH OF AMERICA, COMRADES. GHM wrote on April 08, 2009 10:55 AM: ajax wrote on April 08, 2009 09:40 AM: yeah, etc.etc _____________________________________ People like this don't gamble but want to distroy it and Las Vegas! Again wise up jerks ;What made Las Vegas and it casinos great has been forgotten. Attract people use good perks and you get the gamblers and profit back!! Get rid of consultants and bean counters! They are the ones that caused all the problems! When they were bought up by the big business they eliminated all the goodies! Food now is too expensive!! The perks stink! All the attraction are being eliminated! Why come to Las Vegas when they can gamble home?? The big business bean counters idiots are destroying Las Vegas gambling! HELEN WEILS wrote on April 08, 2009 10:12 AM: MEANWHILE THE STUPID IDIOTIC MORON DINGBAT ALLSINS COPENING IS SPENDING HER TIME ON! "Do you like to grow your own marijuana? Do you live in Nevada? If so, you're one step closer to being totally screwed, thanks to a state Senate committee's actions this morning. The Senate Judiciary Committee voted 5-0 (with state Sen. Mark Amodei absent) to advance SB 262, a bill by freshman state Sen. Allison Copening that would impose big penalties for growing marijuana. . . . Meanwhile, the cultivation of plants used to manufacture alcoholic beverages and tobacco - which each kill more people annually than marijuana - remain perfectly 100 percent legal." - Steve Sebelius, Various Things & Stuff blog, 4/7/09 DEMORATS ARE SUCH WORES! HELEN WEILS wrote on April 08, 2009 10:12 AM: MEANWHILE THE STUPID IDIOTIC MORON DINGBAT ALLSINS COPENING IS SPENDING HER TIME ON! "Do you like to grow your own marijuana? Do you live in Nevada? If so, you're one step closer to being totally screwed, thanks to a state Senate committee's actions this morning. The Senate Judiciary Committee voted 5-0 (with state Sen. Mark Amodei absent) to advance SB 262, a bill by freshman state Sen. Allison Copening that would impose big penalties for growing marijuana. . . . Meanwhile, the cultivation of plants used to manufacture alcoholic beverages and tobacco - which each kill more people annually than marijuana - remain perfectly 100 percent legal." - Steve Sebelius, Various Things & Stuff blog, 4/7/09 DEMORATS ARE SUCH WORES! ajax wrote on April 08, 2009 09:40 AM: yeah, we need free stuff!! That's a great business plan. Give me free stuff!! I'm sick of all these grinders and chiselers in this town. If you want to gamble, go gamble. Buy your own dinner. ghm wrote on April 08, 2009 08:32 AM: What made Las Vegas and it casinos great has been forgotten. When they were bought up by the big business they eliminated all the goodies! Food now is too expensive!! The perks stink! All the attraction are being eliminated! Why come to Las Vegas when they can gamble home?? The big business bean counters idiots are destroying Las Vegas gambling! Mark wrote on April 08, 2009 08:17 AM: RB; did you not read the whole thing? The increase came from accounting rules, and can not be spread over a whole year. Please look at the budget that has been put out and you can see the dire position the state is in. It cost some money to run a state. It is very simple, the state will take in a lot less than it will cost to keep things going as they are now, and nobody wants their piece of the pie cut. As a high school teacher, I can understand the problem, but I am also one of those that don't want my piece of the pie cut. Just about every state in the nation is in the same boat. It really does not matter who caused this, us little people must pay the price. It is still better than living in another country. Read All Comments