Nevada casino profits plunge in ’09
Associated Press writer
CARSON CITY, Nev. (AP) – Nevada’s major casinos posted a net loss of $6.8 billion in fiscal year 2009, a 1,040 percent plunge from the $721 million earned in the prior year, according to a report released Friday.
The annual “Gaming Abstract” issued by the state Gaming Control Board tracks casinos statewide that gross $1 million or more in gambling revenue.
It’s only the second time the state’s biggest casinos had a loss. It’s also the largest in history, providing more sobering evidence of how Nevada’s tourist-driven economy has been walloped by the global recession. The last loss was in 2002, right after the Sept. 11 terrorist attacks, when casinos lost $33.5 million, said Control Board analyst Frank Streshley.
“This is a reflection of the recession,” he said. “Even those visitors who did come to the state spent substantially less than they did two years ago.” In 2007, casino’s had a record net income of $2.3 billion.
The 260 casinos included in the latest report for the fiscal year ended June 30 had total revenue of $22 billion. Of that, $10.5 billion came from gambling revenue, which declined 12.7 percent.
Room revenue fell 16.6 percent to $4.3 billion; food, down 9.3 percent to $3.2 billion; and beverage, down 0.3 percent to $1.3 billion, according to the report.
Higher costs also ate into profits. General and administrative expenses increased $5.4 billion, or nearly 54 percent, over 2008. Included in that was bad debt expenses, which jumped 126 percent to $4.1 million; and $621 million in interest expenses, a 29 percent increase.
The report also said the major casinos in 2009 employed 177,397, roughly 25,000 fewer people than the year before.
A breakdown showed Clark County, with 149 casinos large casinos, had a combined net loss of $6.5 billion.
Thirty-two casinos in northern Nevada’s Washoe County had a combined net loss of $47.4 million.
Statewide, the casinos paid $778.7 million in state gambling taxes and fees, representing 7.4 percent of their gambling revenue.
The unaudited report tracks gains – or in this case losses – after various expenses and state taxes – but not federal taxes or extraordinary expenses – are deducted from gross revenues.
Elko County’s 18 casinos in northeast Nevada, a rich mining region that has withstood the recession, were the only ones to report a net income, a combined total of $36.2 million, the report said.
Five casinos along the South Shore of Lake Tahoe had a net loss of $260 million.