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Friday, Jan. 16, 2009 | 10:13 a.m.
Sun coverage
Beyond the Sun
CARSON CITY – Profits at Strip casinos tumbled by more than 50 percent in fiscal 2007.
The state Gaming Control Board released its annual “Nevada Gaming Abstract” Friday, showing that the 266 casinos statewide that grossed $1 million or more in gaming revenue ended up with a 68.6 percent decline in net income. (Net income is computed before federal taxes and extraordinary expenses.)
“There was less revenue but a higher cost of doing business,” said Frank Streshley who compiled the report for the board. Total revenues to the casinos fell by 1 percent but the general and administrative costs rose 16 percent.
This was not surprising, he said because the national economic decline started in January 2008, he said. This report covers from July 1, 2007 to June 30, 2008.
Profits in the 40 casinos on the Strip totaled $709.3 million, down 57.3 percent. The rate of return fell from 10.8 percent in 2007 to 4.5 percent in fiscal 2008.
Gambling in the Strip casinos accounted for 39.7 percent of the revenue, followed by food that brought in 25.8 percent and the rooms at 14.7 percent. Bar business was 5.2 percent of the total revenue.
The slot machines on the Strip took in $3.3 billion, or 53.9 percent of the total gambling revenue. Gambling pit revenue hit $2.6 billion, or 42.1 percent of the gaming win. Poker and pan had 1.9 percent of the total $6.2 billion casino revenue. And the sports books were 1.3 percent.
For the first time ever, Streshley said, the casinos on the Boulder Strip suffered a loss. The 32 casinos registered a loss of $6.1 million. The rate of return was a negative 0.5 percent, compared with 11.6 percent last year.
Downtown Las Vegas clubs reported $30.8 million in net income, down 54.2 percent. The rate of return was 2.8 percent, down from the 5.9 percent of the 2007 fiscal year.
The 11 casinos in Laughlin posted profits of $49.8 million, down 51.3 percent. The rate of return was 5.4 percent, down from 10.8 percent.
Taking the biggest hit were the 54 casinos in the balance of Clark County, including Mesquite and North Las Vegas. They reported a net loss of $146.2 million, down 235.9 percent from the previous fiscal year.
Streshley said there were several major transactions in Southern Nevada that added to the costs of operations. Two companies switched from public to private ownership that resulted in increased debt and higher interest rates.
Any of you tax and spenders what another swipe at taxes for the golden goose before its completely dead! You better hurry up!
(6% paycut doesn't look too bad compared to the 57.3% cut already out there, huh!)
There's a changing trend in the casinos now, less amenities and cheaper/less comps. This is essential to bringing in line the revenue/cost spectrum.
I agree, taxing this industry more (at any time) is just bad economics.
I do beleive that the casinos need to do a little better job giving back to the communities in other aspects...
Now the question becomes, are these losses based on previous years..(2004-2005)? Which in case, would be record revenues, or however that is figured out...Now if it is based on the previous years..then man this is TOO funny! Since that would be "pure justice" and I can say that I have seen now..."what comes around goes around"
Ahh how the mighty have fallen!
DC Dave
A few years ago my husband & I went to the Reno/ Lake Tahoe area to play with the spare change we accumulate in the console of the car, the bottom of my purse, etc only to find the machines don't take coins anymore. I wrote to the NV Gaming Commisioner to let them know how I felt. After all, we pass by several Indian Casinos on the way up the hill and if I wanted to play with paper, I could stop there and save on the gasoline. I warned the NVGC about the prospect of the posible loss of tax revenues.
I know we're only 2 Californians but, you know there's more than the 2 of us here
"I agree, taxing this industry more (at any time) is just bad economics.
I do beleive that the casinos need to do a little better job giving back to the communities in other aspects..."
Like what? It seems really strange that you don't want to tax them, yet you do want them to give back to the community. What, except money, do you imagine they have to give?
Myksmom, I miss those old fashioned machines, too. I cut my teeth on those mechanical-electric clankers of yesteryear. . .like in the once-and-long ago Nevada Club in Reno, what a thundering clatter all those wild nickel and quarter clunkers made--the whole floor shook from the din.
Those glorious days are gone. The slot industry, like Vegas, rushes onward, detroying its past trying to catch an illusive future.
A few machines at Harvey's at South shore take (or took the last time I was there) coins, but gave back paper. Paper is convenient, but hot coins trickling through my fingers just felt a whole lot more thrilling. I'd feel like rich ol' Uncle Scrooge McDuck diving into his swimming pool filled with money..besides with coins, I could quickly drop a coin into the machine at my side to let that other player eyeing it know that I was claiming it before he could get his hands on it--jamming in a bill now takes too lone. The modern casino might offer a salon of those old machines. Those were the daze.
Hold onto your hat you ain't seen nothing yet.
Rather than "holding on to your hat" may I suggest you "get a clue." Nevada casinos showed a $235 million LOSS in 2002. Profit and loss is almost irrelevant in an ongoing business; cash flow and gross income are what matter.
A lot of the losses on based on having to service the massive debt that most of the casinos are carrying. A number of these companies are going to declare bankruptsy, and dump their debt loads. However, they will very likely continue to operate. At that point, they will likely be back to operating at a profit.
People are beginning to realize that gambling is a ripoff!! Who paid for those two bronze glass Wynn and Encore towers? You did-- you the gambler. The return of penny slot machines is nice but then I played the penny megabucks slots--you have to play 300 credits for a chance at the big prize. That's ridiculous. I went to Vegas last week to see Scarlet Princess of Magic but I was AFRAID to gamble because I can't afford to lose even $20 in this recession. I came from Los Angeles and I couldn't believe how deserted the sidewalks are now!!