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Published Monday, Jan. 31, 2011 | 9:15 a.m.
Updated Monday, Jan. 31, 2011 | 11:16 a.m.
Sun Archives
- Nongaming revenue a shaky leg for Strip to stand on (1-4-11)
- Las Vegas Strip looks to adapt to a changing market (1-2-11)
- LVCVA focusing marketing, ad strategy on ‘core’ visitors (12-15-10)
- Downtown breaks 28-month slide with October gaming win increase (12-9-10)
- Gaming executives foresee a tough year ahead (12-9-10)
CARSON CITY – The major casinos along the Las Vegas Strip suffered a $2.5 billion loss in fiscal year 2010, but it still was a better showing than the previous 12 months, the state Gaming Control Board reported today.
The net loss, which includes gaming, rooms and restaurants, was 38.2 percent less than in the prior fiscal year when the loss was $4.1 billion.
This was the first time there have been two consecutive years of losses. “The picture is not good,” says Michael Lawton, senior research analyst for the board. “The golden goose is hurting.”
Total revenue collected on the Strip reached $18.2 billion, off 5 percent from the previous fiscal year. Of that, total gaming revenue was $8.4 billion, down 5.3 percent from the previous fiscal year.
The board issued its Nevada Gaming Abstract, which showed statewide there were 256 casinos that grossed $1 million or more in gaming revenue. Nevada casinos had a net loss of $3.4 billion from total revenue of $20.8 billion.
That compares favorably with fiscal year 2009, when the statewide net loss was $6.7 billion on total revenue of $22 billion. Casinos cut costs by nearly $4.5 billion to help narrow losses from a stretch in late 2008 and early 2009, state gambling regulators said Monday. The fiscal year ends June 30.
Net loss is the money retained by casinos after expenses have been covered, but prior to deducting federal income taxes and extraordinary expenses. Nevada casinos paid $777.5 million in gaming taxes and fees, or 7.8 percent of their casino revenue.
The 39 major casinos on the Strip reported room revenue was off 7.8 percent with occupancy falling from 89.5 percent to 88.4 percent. The average room rate dropped to $112 compared to $124 in fiscal 2009.
But liquor sales rose by 7.4 percent at Strip casinos, indicating tourists are spending less on rooms and gambling, but more on booze.
Gaming win on the Strip accounts for 47.5 percent of the statewide total.
Clark County had 148 casinos grossing $1 million or more in gaming revenue and they generated a combined net loss of $3.3 billion from total revenue of $18.2 billion. Downtown Las Vegas casinos reported a net loss of $73.7 million, compared to $54 million in the prior fiscal year.
Washoe County had 31 casinos that reported a net loss of $27.5 million from revenue of $1.4 billion. Elko County had 18 casinos with $37 million in combined net income.
The Carson Valley area had 13 casinos that posted a net loss of $435,875. South Lake Tahoe’s five casinos reported a net loss of $90.3 million.
The abstract report also includes information such as the average number of employees, rate of room occupancy, revenue earned per room per day and gaming revenue earned per square foot of gaming floor space.
What was the EBITDA? I bet it was interest on expansion debt that caused the net loss. Income from operations is the real barometer.
This is obviously the fault of "tightwad talk radio" such as the Dave Ramsey Show, that tells people not to gamble or spend money. "Gambling is stupid, but by my book." He has over 300 employees selling his "tight wad cult followers" books and seminars. He has the fifth highest listener-ship in the USA.
In the local las Vegas area he may not have much of an impact thought, since he is on a station that is twentieth in the ratings.
Nevada's between a rock and a hard place right now. I don't see how the State can address its budget woes without raising taxes, but how can taxes be raised when the primary industry is in the red?
The casino's probably took every loop-hole, write-off and deduction they could find to show a massive loss on their books this year.......this is their first salvo against any move to raise gaming taxes in Nevada.
Tho, they have been spending huge on remodeling and retrofitting work in every location on the strip.
When one keeps re-financing the properties to get cash to invest in China, and one claims all the costs of this money to the Las Vegas cansinos, the casino will never make any money ever again. Forget Ebidta, just tell us what were the expenses attributable to Las Vegas, not the outsoursing of the money to China. Oh yeah, then these casinos are really hauling in the dough. [And, they might actually be called out to pay taxes--the same taxes they pay everywhere else. Why is it that a minor gambling ["gaming"] states like Pennsylvania collects more "gaming" taxes than Nevada, the supposed "gaming capital of the USA? Because the citizens aren't suckers. I bet their schools aren't rated #49. Nore are China's. Nor Singapore's. Even Wynn has claimed it is better to be in communist, high-taxed Macau than Libertarian, low-tax Nevada [even as he rails against "socialist" Obama.]
Las Vegas casinos seem to be adjusting their business approach more toward spend-less clientel, but in a kind of lopsided manner. I get offers from both MGMI and Ceasar's Ent. for free rooms accross a much broader calendar than ever before. But free rooms seen to come on the backs of greater vigs for the casinos from the machines and tables. My wife and I win less than before.
While rooms go for gratis, buffets are a gouge. Where's the balance? An adjustment of reasonably priced rooms and meals with improved gaming odds for clients seems like something casinos would want to impliment and then advertise the Hell out of! Viva competition!
Mr. Boris R. from Switzerland, in another post,
brings up a point which interests my wife and I greatly. Casinos in his country dedicate the majority of their floor space as smoke free. It would be interesting to see their earning reports for the past couple of years. I doubt they are operating in the red.
My wife and I are on the verge of quitting our Las Vegas trips. We've been coming for years, but as we age, our bodies are less resistant. Tobacco smoke now makes us both sick (I'd ranther not go into the vivid details!) We can't find a smoke-free gambling environment in Vegas, yet in casinos in the Sacramento Area, we can.
How many thousands of mon-smokers shy away from Las Vegas casinos for the same reason?
We both love Las Vegas, but the negatives outweigh the fun of it all!
The loons are out in force. "It's Dave Ramsey's fault." "It's China's fault." Barry if you love the Chinese model so much I challenge you to go to China and level the same type criticism you have above and see how long it takes before you're put in confinement.
I'm no fan of giving money to a casino but that doesn't mean I want to throw out our form of government so we can have a one child policy, stifle political dissent and stomp on freedom of speech. I guess the posters above don't have problems with giving up those fredoms.
These folks are a member of the TUMs party or, "tax us more."
It is absolutely amazing how this story is written. One would think that the strip casinos operated in the red last year. But read closely. They made 2.5 billion less, they didn't lose 2.5 billion. They still made 18.2 billion! It's just that they didn't make as much money as last year. How ridiculous is it that casinos are the only corporation that can make nearly 20 billion dollars and still scream poverty, that they operated at a loss?
Who are they trying to kid here? If they were REALLY losing money I would imagine I'd soon see a "Closed, Out of Business" sign on their front door. No one, if they have any sense, keeps the doors to a losing proposition open for long.
wow ...mred going with the Dave Ramsey angle , YIKES . He loves to bust that out every now and then
The casinos have been told, over and over again since the recession started, both by people who post here and by others, what they need to do. They still are not listening and nothing is going to improve for them.
Oh, and my last post brings up another thought. I don't believe anyone has brought this subject up before. It is only a matter of time (I don't know when) until some of these name brand casinos on the strip are forced to close. It will be interesting to see what happens then.
Ken,
Sometimes in life you have to have a reality check.
Anyone that knows how to run a Billion Dollar Casino is NOT posting here. Only those that THINK they can run one are posting here.
2 words: greed, short-sightedness.
I think Grizzly misspelled a word.
I've been noticing the electronic poker, black jack and roulette tables in the casinos and on cruise ship casinos.
I spoke to a casino manager that advised me that a huge cost of operating a casino is for the security of the dealers. All of those cameras have to be monitored, plus the pit managers ect.
With a new generation and population of video gamers, I wouldn't be surprised if you start to see casinos going totally electronic to save money. Not having a person on the other side of the game is normal for many of the gamers.
That would mean no cash exchanged, no chips, all electronic and voucher machines everywhere.
Unfortunately, this would eliminate jobs and could also eliminate a sector of gamblers who only want
an actual dealer. However, the cost savings would likely be huge.
From the $2.5 billion debt posted last year, Nevada doesn't have anyone who can run a billion dollar casino.
It's a free market and the successful casinos will adapt to changing conditions. But there's no doubt the golden goose is tired, and NV's pols need to start pushing long term ideas for economic diversification in order to stabilize employment & the tax base (with the likely introduction of some sort of income tax, ableit small, flat, and imposed on all income levels). Short term, we're s*****d, unless gay weddings, legalized marijuana or legalizing the sex industry can somehow help rejuvenate the golden goose. Or there's a mass migration out of the unemployed.
Here's a free tip:
1. Tell all those celebrity chef restaurants to take a hike, and try opening more affordable independent restaurants, NO CHAINS.
That will go a long way towards making Vegas bearable again. Not everyone can abuse their credit cards and pay $30-60 for a ONE buffet dinner in these times.
We just returned from a 4 day stay on the Strip.
The one thing that I immediately noticed was the complete indifference from most of the hotel and casino employees. This started with the woman who checked us in - she just didn't seem to care.
Don't these people realise that there is a recession and over 14% unemployment.
I would have figured that these employees would be happy to be serving tourists who are willing to spend some money - it would sure beat standing in an unemployment line.
"Total revenue collected on the Strip reached $18.2 billion..."
The only reason I see for the misleading headline is a tax agenda. Either a lot of taxes are coming or Casino's don't want to pay as many taxes.
This article was also features on Yahoo/AP.
They will have perpetual losses now that China is the new cash cow.
Most likely they want it both ways. Losses in Nevada so they don't pay taxes and huge gains in China so they can launder that money back into the states as "chips".
Nevada gov and legislature too stupid to "read between the bottom lines".
A first year accounting student could figure out this rope-a-dope scheme.
Legalize pot and prostitution, tax it and we will balance the Las Vegas city budget.
We have legalized prostitutes working in Washington, why not Las Vegas? Can't stand the competition?
to the above poster
regarding the context of this article,youre statement is the most ridiculous thing i have ever read
pretty obvious that the PEOPLE not posting here are not getting the job done either!
Although I get your drift,it still makes no sense pertaining to this article
peace out
The upper managements have no clue how to take care of a guest. They learn their trade in college, not the real world and now the hard-working people here suffer along with the guest. Hire from within...get real experience in there.
Harry Reid will fix it.
Anyone else bother to follow the hot link, read the actual report, and reconstruct the financial statements to approximate reality? Try it. You will be interested to compare the "headline" number of the reported loss to the possibly more useful numbers you come up with.
Hey mred, too, be sure to tune in to Glen Beck, Rush, and then Sean Hannity and then MARK LEVIN!
We are soooo grateful you are a loyal listener.
Psssst! mred!! Dave Ramsey teaches people how to stay independent and pay their own way instead of looking for lifetime government handouts like you and your ancestors.
As far as my wife and I are concerned we are finished with gaming for the near future. We have lost more in the past two years than we did in the last ten. The operating plan of the gaming companies has made it really difficult for us to continue. We have decided we need a new hobby. We always expect to come out on the short end but it really is out of control. My feeling is that many, many other people feel the same way. The gaming beast of today just has too big of an appetite and has forgotten from where it's food comes from.
Really, Americans need Dave Ramsay to tell them the basics of financial common sense?
Also, this swindler is the one making money off of self-help garbage. He's hardly anyone to talk. He's just another pyramid scheme loser.
I just got back to NJ from my weekend on the strip. Why on earth is smoking allowed? Every hotel including Cosmo and Bellagio stinks! The 2nd hand smoke is worse than ever. As a non smoker, I gambled much less because of the stink! FYI- a smoking ban will not deter a compulsive gambler from gambling! What a warped, misguided policy. LV has mow become a haven for smokers. Good job!! All the swanky hotels and resturants sitting in ashtrays. You can put lipstick on a pig, but at the end of the day, it's still s pig.
By the way, where is OSHA protecting the casino workers from all the 2nd hand smoke? Any idiot could walk through a vegas casino and smell the obvious. That's backroom beltway deal and to hell with the obvious workplace hazard.
Samjung23, if you don't like him don't listen to him. DO NOT TELL OTHERS WHAT TO DO!!!!!!