Nevada gaming revenues down more than 18 percent - Breaking News

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Apr. 07, 2009
Copyright © Las Vegas Review-Journal

Nevada gaming revenues down more than 18 percent

By HOWARD STUTZ
LAS VEGAS REVIEW-JOURNAL

Casino revenues 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 revenues 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 revenues statewide are off 16.3 percent compared with 2008 while Strip gaming revenues are 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. CAL Player wrote on April 13, 2009 08:35 PM: Harrah's has run me off for good. I come into town 7-8 times a year. Play 2G per trip and the Rio treats me like trash. I hope they go BK and sell off most of there properties. The bean counters have killed the golden goose. At Harrah's the goose is dead become a county paramedic,and come to where the free money is wrote on April 07, 2009 09:07 PM: if you want to see paramedics tired of doing the work they are overpaid for and are not doing, ask yourself why rescue 31 was moved out to station 23 ,violating the sunrise manor bond issue,so harold wyatt could avoid running medical calls, station 23 remained so busy, harold wyatt hated it, and decided to relocate the fema heavy rescue station over to station 21, which cost 3 employees their captains badges which dave leedham barbra nygard and mark stephenson were passed over for. paramdeic chief steve hanson lied and said station 27 was without a certificate of occupancy, yet more than 1 fire station currently functions under a temporary occupancy permit, but the excuse was used to deny the promotions to these 3 employees.for nefarious purposes within the paramedic division.,paramedic union official ed beaman promised to build a union hall, bought land with union dues,had it subdivided /rezoned /sold half/ family pocketed the profits, and then decided to accept an old building on charleston as the new union hall,for political favors.never completing the new hall as promised.the county owes david ,barbra and mark a great deal of back pay. the phony cry that firefighters see anything more than a samaritan sees at a car accident,fire,or drowning is a big fat joke. the paramedic lies to make higher paycheck amounts . ..........it is the bottom line Thanks but no thanks wrote on April 07, 2009 08:05 PM: I think casinos have confused comp credits with the fun of the game. Using those comp casino cards are all very good, however, I prefer having fun at the machines...which has changed recently. I like playing...and it takes 60-80 dollars to get one silly "15 free games" or a lot more to get a four of a kind...It's a lot different from a few years ago. I'd rather shoot myself in the foot than get 20 comp credits after playing $200 dollars, and no play for the dollars. The bean counters are killing gambling..bring back Binion or Harrah...the real McCoys. Can't pay the mortgage? wrote on April 07, 2009 05:06 PM: Gamblers wagered $9.1 billion on slot machines and $2.1 billion on table games. And these fools say they can't pay their mortgages? Who is foolin' who? Something stinks in America, and it's not the cheese. What losses? wrote on April 07, 2009 05:04 PM: $839.5 million statewide and $427.4 million on the Strip... seems like a hefty haul for only one month. These muggins are crying all the way to the bank! Proves gaming IS the answer to everything. JohnnyD wrote on April 07, 2009 03:45 PM: This is definitely a wake-up call - gaming is not the answer to everything. We had the chance to begin diversifying our economy after visitor volume dipped after the 9/11 attacks. We didn't. Now look at us. Can we please diversify? We have so much going for us that we don't have to depend on gaming to keep our city afloat. Lee Yarbrough wrote on April 07, 2009 03:02 PM: You have to love locals that wish gloom and doom on the industry that is paying their way in this state. No casinos, no Nevada since they pay half the taxes and most of the wages. ex gambler wrote on April 07, 2009 02:47 PM: Ah yes, but at least their bonuses are safe. Just ask Gary Loveman and his 39 million dollar paycheck. JustCurious wrote on April 07, 2009 01:17 PM: Sure glad the strp casinos don't want the locals business.It appears my house is not worth what it was 2004/2006.Can I write that off,or just whine about it?Funny how they gauge their financial stabilty,They are not in the hole that much,they just are down in their profits.It's still profit,just not as much.Bet they wish they hadn't spent all their money on foreign investments.Kinda like me buying a Bently on a paper route wages.In way over their heads.Poor business sense,just greed. Esteban wrote on April 07, 2009 12:08 PM: Casinos are so greedy; they deserve to fail. People do not longer win! Read All Comments