As if we needed more proof of the sliding demand of destination gambling, the latest revenue figures released for Nevada and Atlantic City only confirmed that things are bad. Nevada posted a decline for the 13th straight month, while Atlantic City revenues hit record lows for the month.
Nevada gaming revenue fell again in January, dropping by more than 14 percent compared to January 2008. It is now over a year that gaming revenues have declined in the state.
Strip casino revenue fell by 14.8 percent, Boulder Highway and Downtown revenue by almost 23 percent and gaming revenue as a whole in Clark County almost 21 percent.
With gaming revenue down, the amount of tax revenue collected was also down. Tax revenue collection fell by 42.3 percent compared to last year.
The Las Vegas Convention and Visitors Authority also reported almost 350 event cancellations in recent months, which has cost Las Vegas about $130 million in revenue.
But the news from January was not all bad. Casino revenue in Reno and Sparks grew by almost 1 percent, while Elko County revenue was up almost 10 percent. Carson City grew by 3.3. percent, which Gaming Control Board senior research specialist Frank Streshley told the Las Vegas Sun could be attributed to recent legislative budget meetings in the city.
Half of Chinese New Year and Super Bowl weekend fell in February, which could make up for the dismal January numbers. Streshley told the Las Vegas Review-Journal that the board needed to look at January and February revenues together “to get a better idea of where we stand.”
Casino Connection columnist David G. Schwartz recently outlined comparisons between this recession and past recessions by examining hotel room occupancy statistics, and found that, although this economic slump has negatively impacted Nevada’s economy, it is not quite as severe as past crashes.
In the tough times of the early 1980s, room occupancy hovered around 76 percent, down from 86 percent the previous decade. In 2008, room occupancy was down to just less than 90 percent, which reflects the pre-boom numbers of 2003. Las Vegas has around 70,000 more rooms now than in 1983, Schwartz wrote, and room occupancy is still where it was just a few years ago.
So, though gaming revenue and room occupancy rates are down, it could always be worse.
For Atlantic City, things looked even worse when compared with its closest competitor, Pennsylvania.
As revenues continue to rise at Pennsylvania’s slot parlors, the story in Atlantic City-the East Coast’s original gaming mecca-grows ever bleaker.
Pennsylvania’s six casinos generated $125.9 million in gross revenue in February, up 14 percent over February 2008.
Leading the pack was Mohegan Sun at Pocono Downs, collecting $17.8 million in revenue-a gain of almost 44 percent. Only Harrah’s Chester Casino and Racetrack reported a slight decline. With revenues of $27.9 million, the suburban racino was down almost 2 percent.
In Atlantic City, the win for February 2009 was $310.3 million, or a 19.2 percent decrease from the same month a year ago-setting a new record for decline in the resort’s 30-year gaming history.
The 11 casinos won $214.3 million at the slot machines and another $96 million at table games during the month, with both seeing decreases of about 19 percent. The table game losses are especially troubling, as the dealer-staffed table games are one attraction Atlantic City has that Pennsylvania does not. Pennsylvania casinos offer only electronic table games.
Before February, Atlantic City’s biggest year-over-year drop was in December 2008, when revenue dropped 18.7 percent.
The top three revenue-producers in Atlantic City last month were Borgata with $57.3 million, Bally’s with $38.5 million, and Harrah’s Resort with $37 million. Bally’s Atlantic City saw a 20 percent drop.
New Jersey Casino Control Commissioner Michael Epps blamed the recession for Atlantic City’s historic slump.
“The gaming industry requires disposable income for people to make it happen,” Epps told the Atlantic City Press. “Right now, people are having to make choices between paying the bills and spending money on other things.”
Competition from Pennsylvania is also a critical factor, added commission spokesman Dan Heneghan.
“Clearly, the economy continues to take its toll on the gaming industry here,” Heneghan said. “That and competition right across our border have combined to depress casino revenues for some time now.”
But part of the year-over-year decline can be attributed to the fact that February 2008 had an extra day due to leap year. It also had five Fridays, one of the best days of the week for casinos.
Atlantic City is now in the third year of a revenue downturn.