Economist: State’s casino business on the rebound

Friday, Sept. 20, 2002 | 11:01 a.m.

CARSON CITY -- Business in Nevada casinos, which fell dramatically after Sept. 11, should return to a normal growth rate in the next two years, a state economist predicted Thursday.

Bill Anderson of the state Budget Division said preliminary estimates show that visitor volume should rise this fiscal year. Winnings by casinos should increase by 4.5 percent in the next biennium, he said.

Anderson presented his figures to the Economic Forum, a group of laypersons responsible for predicting how much money the state will be able to spend in fiscal 2004 and 2005.

This was the forum's first meeting. It will convene again Oct. 30 and then make its findings official on Dec. 2. Gov. Kenny Guinn is then required to build his budget on estimates by the forum.

The forum then will return in May 2003 to make its final forecasts before the Legislature adopts the biennial budget.

Cary Fisher, chairman of the forum, said there "are a lot of things up in the air" in dealing with the economy. Another terrorist attack, for example, could affect the economy, Fisher said.

Russell Guindon, an economist with the Legislative Counsel Bureau, said the forum has been an average 3.6 percent off -- either too high or too low -- in its revenue forecasts on the state's tax collections, which total more than $1.5 billion a year.

"That isn't bad," Guindon said.

In the fiscal year that ended June 30, the forum had predicted the state would collect $1.82 billion, but it fell $68.2 million short thanks in part to the national economic downturn.

Frank Streshley, senior research analyst for the state Gaming Control Board, said after Sept. 11, some casinos pulled some slot machines and table games out of operation. Airline traffic into Las Vegas dropped.

Streshley said high-end players who visit Las Vegas tend to spend more and stay longer. But after Sept. 11, many did not return to Southern Nevada. Many conventions and meetings were cancelled. And attendance was off at events that were held, he said.

Anderson said that gaming revenue in September of last year fell 11 percent, but he expects it to show a gradual increase. The number of visitors to the Las Vegas area in fiscal 2002 was off by more than 1 million. The forecast is for the numbers to grow 3 percent this year.

Anderson said there should be a spike in gaming in 2005 when Steve Wynn opens his new casino, La Reve, on the site of the former Desert Inn.

Job growth is expected to gradually rebound from last year and settle into the 3-4 percent range, Anderson said. Sales tax collections will likely inch up in the next two fiscal years as the economy strengthens further, he said.