Nevada casinos recovering from recession but still below peak
Nevada’s major casinos reported total revenues of $24.6 billion in fiscal 2015.
That is the fifth consecutive increase and $695.4 million more than the year before. Although it’s still less than the $25.3 billion total revenue reported in 2007 — the peak before the recession.
Fiscal 2015 is the third highest total revenues ever reported by Nevada gaming licensees.
The numbers are contained in the annual Gaming Abstract released Thursday. The abstract reports revenues and expenses for the 271 non-restricted gaming licensees that gross more than $1 million in gaming revenue.
According to Gaming Control Board Analyst Mike Lawton, the revenues generated continued to shift away from the casino floor to other offerings in those resorts. In fiscal 2015, gaming made up just 43.2 percent of that total, it’s lowest percentage ever. The combination of Rooms, Food, Beverages and “Other” revenues made up the majority of what the resorts raked in — some $14 billion compared to $10.6 billion in total gaming revenues for the year.
The last time gaming revenue made up more than half the total was Fiscal 2004 — 50.5 percent.
Room revenues rose 5 percent to $5.4 billion; Food 5.2 percent to $3.8 billion; Beverages 3 percent to $1.7 billion; and the “Other” category 7.7 percent to $3.1 billion. All of those totals are above the fiscal 2007 peak revenues.
“It’s a sign of the changing market,” said David Schwartz, director of the University of Nevada, Las Vegas, Center for Gaming Research. “Food is growing and gaming as a percentage is shrinking. What I’m hearing from people is they spend more on food and entertainment than gambling. This is what the visitors seem to want.”
But those revenue totals are all before expenses are calculated and those expenses turned profit into a net loss for the seventh consecutive year. Lawton said, however, this year’s net loss of $661.8 million was $81.9 million less than the net loss in FY 2014.
That loss is accounted for largely in two expense categories: Interest and accounting “write downs” in the value of licensee assets including buildings and property. Those two categories make up $4.85 billion of expenses reported. Cost of sales and departmental expenses make up the remaining $14.46 billion in expenses.
Part of that negative number can be attributed to the Caesars Entertainment Operating Company bankruptcy case that impacts resorts including Caesar’s Palace Las Vegas, which just finished pouring millions into a remodel.
Prior to the recession, the only time in state history Nevada casinos reported a net loss was in fiscal 2002.
The Carson Valley reporting area, which includes valley parts of Douglas County as well as the capital, is a different picture than the state as a whole. First, Carson Valley’s 15 licensees reported net income of $5.8 million, a 65 percent increase from the $3.5 million profit reported in 2014. Carson resorts have now finished in the black for five consecutive years. In addition, Carson gaming operators get 65 percent of total revenue from the casino floor rather than rooms and other offerings.
South Shore’s six licensees at Lake Tahoe, by contrast, reported an even larger loss than last year — $150.8 million. But like the state as a whole, a big chunk of that was caused by interest and other costs related to a specific resort. While gaming control officials won’t discuss finances of individual resorts, that increase is largely expenses from the more than $60 million remodel of the old Horizon Resort, turning it into Tahoe’s new Hard Rock casino.
South Shore has now had eight consecutive years of net losses.
After reporting $30.3 million in profit in 2014, Washoe County’s 37 casinos slipped backward in 2015, reporting a net loss of $7.4 million. But total revenues actually increased 2.5 percent to $1.5 billion.
Specifics were not available for North Shore casinos at Lake Tahoe because they are reported within the overall Washoe County numbers.
Elko County has 19 casinos reporting $45.4 million in net income and the remainder of the state had 39 casinos earning $20.7 million in net income.
The Associated Press contributed to this report.