Nevada casinos net loss in 2013
January 11, 2014
Nevada’s major casinos reported a slight increase in gaming win in 2013. However, the gain was wiped out by increases in expenses, leaving the industry with a net loss of $1.35 billion.
It was the fifth consecutive fiscal year loss for Nevada’s biggest industry. But that loss is on paper, caused by write-downs of assets, bankruptcy reorganizations, administrative costs and other expenses and credits that reduce the bottom line.
According to the annual Gaming Abstract issued by the Gaming Control Board on Friday with the 2012 abstract, $598 million of that expense increase was the result of those types of actions. It’s not that Nevada’s 263 non-restricted gaming licensees are running in the red.
Total revenues for the industry were $23.1 billion, up just $99.2 million over 2012. That includes not only gaming-win but all other revenue generators from food and beverages to room rentals, shows and shops.
Gaming accounted for $10.4 billion of that total and, at $112 million more than the previous year, all of the annual increase.
“For the state, an increase in revenue was primarily driven by gambling,” said Mike Lawton, senior analyst with the control board. “But due to an increase in expenses, the net loss for the state increased.”
Total revenue is the money patrons spent on gambling, rooms, food, beverage and entertainment. Net income or loss is what casinos retain after expenses have been paid, but before deductions for federal income taxes and accounting for extraordinary expenses.
It has been about 15 years since gaming brought in the majority of revenue to Nevada’s resorts. For fiscal 2013, gaming accounted for 45 percent of the total. But he gaming total is the third consecutive increase in revenue after three consecutive decreases during the recession.
Total gaming win still is nearly 17 percent below its peak in 2007 just before the recession hit.
Total employment in the resort industry dipped a tiny bit in 2013 — down 300 jobs to 169,908.
The Las Vegas Strip accounted for $15.5 billion of the total revenue raked in by Nevada resorts. There, gaming win was up 3.5 percent. But on the Strip, gaming generated just 37 percent of total revenues as resort operators continued to expand other entertainment offerings. Unlike 2012, all the showrooms were open in 2013, and the number and variety of shops within resorts continued to expand.
Interest payment on loans used to build, expand and remodel Strip resorts made up nearly 17 percent of expenses there.
“It’s a positive for the Strip,” Lawton said. “Revenues increased and the net loss decreased.”
Carson City licensees saw a 1 percent increase in net profit to $7.1 million — the third consecutive annual increase after four years of decreases. Unlike the state as a whole, the Carson Valley reporting area, which includes valley portions of Douglas County, saw expenses decrease — 1.2 percent or $632,000. Total revenue in the area was $148.6 million, a slight increase that was offset by the decrease in expenses. Also, unlike the state as a whole, gaming accounted for the majority of that revenue — 64.5 percent.
South Shore casinos at Lake Tahoe reported a loss of $90.2 million overall in 2013, despite the fact total revenues increased by $6.2 million to $349.7 million.
The problem was a 45 percent increase in general and administrative expenses caused by decisions made by one of the resort owners at Stateline. Gaming Control officials can’t legally explain exactly what happened because the financials of individual resorts are confidential, but those sorts of things are usually one time events and likely won’t happen again.
Washoe County markets reported a net income of $719,000 — a dramatic turnaround from the $100 million net loss reported a year ago. The reason was that Washoe casinos reported nearly $110 million in “other” expenses in 2013. Those one-time events including major debt restructuring didn’t happen again in 2013, resulting in a much rosier bottom line.
Specifics for parts of Washoe County outside Reno-Sparks including North Lake Tahoe were not available because they are all wrapped together in the category “Balance of County.”