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Nevada casinos suffer $4 billion net loss in fiscal 2011
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LAS VEGAS REVIEW-JOURNAL
Nevada's highest-grossing casinos took in almost 6 percent more in total revenues during fiscal year 2011, but their collective net loss increased by 16.4 percent, according to a report released Friday by state gaming regulators.
The Nevada Gaming Abstract compiled statistics from 256 casinos statewide that grossed $1 million or more in gaming revenue in fiscal 2011, which ended June 30.
The casinos generated a combined net loss of $3.99 billion on total revenues of $22 billion. In fiscal year 2010, the 256 statewide casinos had a net loss of $3.4 billion on total revenues of almost $20.9 billion.
Total revenue includes the money spent by patrons on gaming, rooms, food, beverage, and other attractions. The net loss covered the money retained by casinos after expenses have been paid but before deducting federal income taxes and before accounting for extraordinary expenses.
Gaming Control Board Senior Research Analyst Michael Lawton called the abstract's number "a mixed bag."
Revenues were up in all areas of the report, and the total figure was the first increase since fiscal year 2007.
Lawton said fiscal 2007 was the peak year in the abstract: Total revenues statewide were $25.2 billion during those 12 months, while gaming revenues were $12.48 billion.
"We still have a ways to go to reach the peak levels," Lawton said.
Gaming revenues accounted for almost $10.2 billion, 46.2 percent of the state's total revenues in fiscal 2011, the lowest percentage of the total ever recorded.
"The customers' spending patterns have changed to where we've seen the increase in areas other than gaming," said Lawton, who noted the gaming revenue figure was up 2.6 percent from a year ago, the first increase since 2007.
Subsequently, room revenues grew 10.3 percent, food revenues were up 6.9 percent, beverage revenues increased 9.8 percent, and other attractions showed a 5.6 percent hike.
On the expense side, general administrative expenses by the 256 casinos increased 9.8 percent. Roughly $1.4 billion on the expenses were noncash charges associated with asset write-downs by casino companies and accounting adjustments connected to several bankruptcy reorganizations that were completed during fiscal 2011.
The 148 casinos in Clark County that were included in the abstract accounted for all but roughly $3 million of the state's net loss total. In 2011, 69 casinos owned by publicly traded gaming companies statewide accounted for 78.2 percent of the total gamin revenue generated.
On the Strip, 41 casinos reported a net loss of $2.2 billion on revenues of $14.5 billion.
Statewide, the 256 casinos paid almost $792.4 million in gaming taxes and fees, equating to 7.8 percent of their gaming revenue.
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notice that even with a lower gaming tax,venues outside of nevada, perhaps outside of the u.s. with higher gaming taxes, are better business ventures. that should be the question. likely it relates to the same facts repeatedly by other, non gaming c.e.o.'s during interviews. the common statement is that even mainland "communist" china is more entrepreneur friendly than under the empty suit's anti-business jihad. add uncertain taxation and regulation. same reason the pilgrims came here. to get out from under the"boot on the neck".
City Center was written down 5.8 BILLION dollars in value, are those numbers included in this loss? How does Murren still have a job? Quite the game changer. If our casino's didn't have crippling debt payments, they'd be fine (see South Point and Silverton). Lets build more casinos to compete for the same amount of money, where did these guys get their MBA's from? Probably the bottom of a Cracker Jack box.
7.8% is a free ride. Go to the UNLV Center for Gaming Research there you will find that Nevada is the lowest gross gambling revenue taxing state in the nation and nearly 400% behind Macau. If you truly want to see how the mega casinos (not "resorts" by any stretch of the imagination) operate, as publicly traded corporations--fasten your seat belt. Check out online at each of their respective investor relations sites, the Definitive 2011 Proxy statements, for the Sands, Wynn and MGM. Caesars is nonpublic. Also, check out their respective subsidiary reporting from offshore subsidiaries. I believe all of the above corporations' subsidiaries are listed on the Hong Kong exchange, in regard to Macau, with required reporting via that governing exchange--each is comprised of its own board of directors (this info is also available online with a google search). Ever wonder why these companies have their annual stockholders meetings as far away from their corporate head quarters as possible. Its all very intriguing reading. Well worth the time if one is an employee, present/past investor or area resident. You may end up with more questions than answers, e.g. they got a raise but my scheduled contractual based raise has been in deep freeze for years and years. Lastly, a note to commenters below: Indeed, how can stockholders allow casino leaders to continue to leverage certain casino corporations beyond the realm of good business practices vis a vis their respective Proxy statement disclosures.
Vegas is hurting and on the decline. despite of rosy picture published and was just a mirage in the desert which is about to fade away with progressively declining net profits while Macau and regional casinos are experiencing explosive growth. decline of Vegas casinos can`t be good for the housing prices which will continue downwards for years to come.
billions in interest on debt starting to catch up .just a matter of time before the banks say " margin call gentlemen "
They laided off a lot of employees when the economy tanked. Then when things started getting better and tourism increased, the casinos tried to be cheap and never re-hired employees to accomodate the increase in customers. So customer service suffered and tourists aren't coming back because of it. . Penny wise and pound foolish.
@stationary --LEVERAGE (DEBT).
If they are all losing so much money, why then are so many planning new projects and acquisitions?
Sounds like a simple case of "CREATIVE BOOKEEPING" ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Nevada Casinos enjoy the "LOWEST CASINO TAXES IN THE WORLD" and can't make a profit (profitable in Macau, even though paying 45% gaming tax and only 7% in Nevada) ???? You do believe them, don't you ???? -------------------------------------------------- Yup - we are all stupid !!!!
hope and change