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Courtesy photo
American Gaming Association President Frank Fahrenkopf discusses the state of the industry in November 2009 during the Global Gaming Expo at the Las Vegas Convention Center.
Tuesday, Nov. 17, 2009 | 10:44 a.m.
Sun Archives
- Gaming’s financial execs weigh in on tough times (11-17-2009)
Beyond the Sun
As the national economy begins to recover, the gaming industry will follow.
That was the message American Gaming Association President Frank Fahrenkopf delivered at a media briefing today during the first day of the Global Gaming Expo at the Las Vegas Convention Center. The national advocate for the commercial casino industry discussed revenue declines in the industry and his outlook of the future.
“Many of the economists have been saying that the recession is over. I think that is more of a statistical technicality than a practical reality,” Fahrenkopf said. “Main Street is still feeling the heart of the economic downturn and the same has to be said for the gaming industry.”
At a national level, Fahrenkopf said gross gaming revenue was down for the third quarter to $7.94 billion, a 5.5 percent drop from the third quarter of 2008.
“As long as consumer discretionary spending is down, our industry and those like it will continue to suffer,” Fahrenkopf said.
Some states, like Colorado, Indiana and Missouri, saw gains during the third quarter. Pennsylvania also has seen growth, which has come at the expense of Atlantic City, Fahrenkopf said.
In a survey by the AGA conducted in the first two weeks of October, 260 newsletter subscribers weighed in on their feelings on a recovery in the gaming industry.
Forty-four percent said they believed business conditions are getting somewhat better while 31 percent said they believe conditions remain depressed but are getting neither better nor worse.
When asked to predict when the gaming industry would recover, 44 percent said they see a recovery in three to four years while 23 percent said within one to two years.
“Everyone is telling me that it has bottomed out but it’s not a flat bottom; it seems to be a rocky bottom. The good thing is people seem to be coming to the destination cities, there’s just not the same amount of discretionary spending,” Fahrenkopf said. “The key is how quickly we can get people back to work.”
Like gaming revenue, this year’s Global Gaming Expo has seen declines as well. Attendance is expected to be down 5.7 percent to 25,000 in 2009 compared to 26,500 in 2008.
Both exhibitor numbers and the amount of exhibitor space are down this year because of smaller companies that have gone out of business, Fahrenkopf said. G2E will house 566 exhibitors in more than 258,000 square feet of exhibit space compared to 724 exhibitors in 335,480 square feet of space in 2008.
Fahrenkopf reiterated statements made by several casino operators and tourism officials in Las Vegas during the last few months. He said that while visitors are still coming to the city, they are spending less than in prior years.
Fahrenkopf said the addition of CityCenter will bring two things Las Vegas needs: More jobs and hopefully more visitors.
“Whenever a new project opens, people want to come see and participate in it and we hope that’s going to be the impact of CityCenter.”
And with the help of a black light you can see the trail.
GDP grew in the 3rd quarter, jobs are always lagging the numbers recovery in each recession. Those thinking about long-term recovery, know the enviroment will be a big winner in the conversion to biofuels & biopower -- saw a cool site; Balkingpoints ; incredible satellite view of earth
A change of the business model target from medium to high rollers to regular gamblers might get customers back in the city. High end shopping and dining won't work in a recession, you think!!!!
The gaming industry is in the crapper for a number of reasons. Obviously the main reason is the recession/depression, HOWEVER I believe that the excess development of luxury properties has shut out the middle market which is what built Vegas to begin with. There aren't enough rich people to sustain all of these properties with their huge overhead. Recession or no recession a good number of these places would go under. Now the question is not WHEN the industry recovers it's IF, and that depends on different marketing strategies offering a return to the value oriented vacations which made Vegas a popular destination not so long ago..
whaaaaat? you mean all those jobs ObaMao "saved" aren't getting things turned around?
you liberals hate an honest days work, but you love child molesters.
really sad.
Las Vegas should be preparing to accept the reality there won't be an economic turnaround -- mounting government and personal debt compounded by the lack of consumer credit assures it.
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Harley--
You may be right, especially if the predictions by financing expert Joshua Kosman prove correct. He predicts a national credit crises within the next few years as companies sucked into accepting leveraged by-outs by private equity firms begin to crumble into bankruptcy--just when a recovery from our current credit problem might be at hand. Listen to his explanation on the following NPR interview http://www.npr.org/templates/story/story...
With over 1200 Indian Casinos in the U.S. Vegas will never be the same again.
Stevem: You war mongers love killing people, even kids. THere was no terrorism before Bush 1 started desert storm. Did you think the Arab world would sit back and do nothing? Idiots!!!!!
kenoking53, hard to imagine Indian Casinos hurting Vegas. There is one 30 miles from my home in South Florida. Never been there but I've been to Vegas more times than I can remember.
ZhuZhu: Went to Vegas alot. But now I pay $10.00 for a tour bus and get $45.00 promo cash and free meals. By the way, the bus is always full, some times they take 3 buses. Don't go to Vegas anymore. And we win more often than we did in Vegas.
The Las Vegas casinos cannot make enough (if any) profit with their huge debt loads. They try to maximize profit by tightening the slots and reducing staff. This only works for a very short period, and then the regulars and eventually just about everyone realizes that the slots have become too tight to be enjoyable. Only a reduction of the debt (through bankruptcy or a casino purchaser with lots of cash) can solve the profit problem so that the slots can be loosened. It will take too long for the general economy to pick up enough for most gamblers to stop caring about the odds and once again to start spending excess cash on trips to Las Vegas.
FromBellevilleCanada--
You express my thoughts completely. Still, there will be some diehards like me who love to go to Vegas for the nostalgia rush. That is the attraction now. The gambling is only a lack-luster side show.
The gambling take, as you say, will continue to drop and not be enough to pay the casinos' debt loads. Too much competion now--too much "supply" in so many other more convenient places.
Perhaps a nostalgic theme such as "Vegas Forever" might alure people, coupled with, as suggested by many in these comments, an advertising campaign that boasts a radical commitment to better odds and pay-outs, delicious and inexpensive buffets reasonalbly prices shows, innovative slot and poker tournaments, and cheap, clean rooms.
I also liked the hypothetical "Planet Mars" concept suggested somewhere here awhile back. That is where our science explorations are focused. A casino with way-out high-techy stuff that pokes fun at itself and draws people in. Wal-e world of whacky robotics!
Just spent a week in Vegas for business. Couldn't believe how expensive things were on the strip. Even fast food places were $$$$$. Alot of the shops were empty, drinks were way over priced. While driving back east stopped at a couple casinos, they were packed, and I was treated better. Good luck Vegas
stevem....you have just got to be related to John Ensign...nothing else can explain it...
Stevem: You war mongers love killing people, even kids. THere was no terrorism before Bush 1 started desert storm. Did you think the Arab world would sit back and do nothing? Idiots!!!!!
KenoKing53
Man, are you mistaken!!! There have been terrorism threats since the 1980's!!!! It just wasn't talked about. Our gov't and military have known for years that these extremists wanted to kill Americans and have been preparing for it. My nephew was in the Air Force in the 80's, during Reagan's administration. He was in an anti-terrorism sqaudron. They had constant drills and exercises when he was stationed overseas, including exercises dealing with "chemical weapon" attacks, when our own military had chemical weapons (and do not believe it when you hear the gov't saying we never had chemical weapons. We did.). so terrorism has been a threat to the United States for over 20 years now. Unfortunately, no one then and later on believed that these idiots would use airplanes as weapons. So don't kid yourself. They've been wanting to kill us for years now.
CASINO EXECUTIVES:
Back to the basics. Food specials, Show specials, a place for the kids to go while the Parents play. Get them in the doors, let the gambler in them take over. That's what built this town. People still want a meal or show they can afford, and at least 30% of them will drop money in your machines far exceeding their plans and eating up any special discounts they saved. That's what gambling does, and that's what you want and need. It's up to you to gamble the cost of food and entertainment against the benefit of those that will stay and play.