Nevada casinos suffer decline

Wednesday, Aug. 14, 2002 | 10:54 a.m.

CARSON CITY -- Casinos along the Las Vegas Strip recorded their worst year-to-year performance comparison in the last decade with their gross win falling 7 percent in fiscal 2002. In June, the last month of the fiscal year, the gaming win declined 7.9 percent statewide and 13.8 percent on the Strip.

The state Gaming Control Board reported Tuesday that Nevada casinos won $9.3 billion in the fiscal year that ended June 30, a 3.7 percent decline from the prior year.

Gov. Kenny Guinn said, "It doesn't look good. And it's getting worse."

He said the declines are forcing the state to make larger cuts in its budget. He has estimated there's a shortfall this fiscal year of $175 million to $180 million.

Bill Bible, president of the Nevada Resort Association, said there was the expectation that business would dip after Sept. 11 last year but there has not been much of a rebound. "I'm disappointed with the current numbers," Bible said, referring to June's 7.9 percent drop.

Frank Streshley, senior research analyst for the gaming board, said Strip casinos won $4.5 billion before taxes and business expenses or about $340 million less than the previous year. The only other year in the last decade when the Strip posted a decline in gross win was in 1997, when the revenues fell by .2 percent.

Prior to Sept. 11, Streshley said there was a "substantial slowdown" in the gaming economy. Then after Sept. 11, he said, many international travelers and high-end players didn't come to Las Vegas -- leaving casinos catering largely to slot machine players.

Bible agreed with Streshley. He said the hotel occupancy rate has been "pretty good" on the weekends in Las Vegas but it was "still soft" in the midweek. People don't have as much discretionary income, he said.

Bible noted that some companies are doing better than others -- with some top-tier companies attracting customers by discounting room rates. The average growth on the Strip for the past 10 years has been 6.2 percent.

During the fiscal year, revenue from the table games on the Strip fell 12.9 percent to $2.1 billion. And the slot machine gross win was off 1.1 percent to $2.3 billion.

Despite the decline, gambling along the Strip now makes up 48.7 percent of the state's gross win, up from 45.2 percent of ten years ago. And Clark County gaming casinos account for 80.4 percent of the volume, up from 75.2 percent ten years ago.

Streshley also said there was a slowdown last fiscal year in the opening of new major casinos in Southern Nevada. The only new ones were the Palms Casino and the Green Valley Ranch Station Casino. The only major casino to close was the Flamingo Hilton in Reno that shut its doors in October 2001.

Downtown Las Vegas casinos posted revenues of $668.2 million, down 1.7 percent. Their 10-year average change has been minus .4 percent. The slot win fell 2.2 percent to $498.5 million and revenue from the games was off .1 percent to $169.7 million.

Casinos along the Boulder Strip are poised to overtake downtown Las Vegas. They registered $632.9 million in revenue, up 4 percent for the year. Their average growth rate has been 4 percent in the last 10 years. Streshley said he expects the Boulder Strip to surpass downtown in this fiscal year in total revenue.

For the second straight year, gross win at clubs in Laughlin declined. The casinos reported winning $545 million, a decrease of 1.4 percent.

North Las Vegas clubs registered the biggest drop in Clark County, down 7.2 percent with gross win of $205.8 million. They had dropped 5.2 percent last year.

The growing city of Mesquite posted the best percentage win increase in Clark County. Revenues rose to $106.5 million, up 8.3 percent. The balance of Clark County recorded $784.2 million in casino win, up 6.1 percent from the prior fiscal year.

The city of Reno recorded the worst performance in the state, with gross win down 7.8 percent to $768.3 million.

For the final month of June, Streshley said there were two factors responsible for the 7.9 percent drop in winnings statewide. He said the gross revenue from baccarat fell by 83.3 percent or $40.8 million. That's the lowest win since June 1994.

And there was a $22 million win in Megabucks at Bally's Las Vegas.

The board said Strip clubs posted $339.1 million in winnings, a decline of 13.8 percent. Table game revenue fell 25.4 percent to $150.8 million and slot win was off 1.6 percent to $186 million.

Downtown Las Vegas casinos fell 6.9 percent to $50.3 million. Table games fell to $121.9 million in June, down 2.5 percent and slot machine revenue was off 8 percent to $38.1 million.

The board said gaming revenue in June rose 6.6 percent to $48.3 million at casinos on the Boulder Strip and increased 2 percent to $42.6 million in Laughlin.

But North Las Vegas casinos posted a .8 percent decline to $15.2 million and Mesquite clubs reported $8 million, off 1.1 percent.

The board also said the balance of the county fell 1.8 percent to $58.1 million.