Tuesday, Nov. 17, 2009 | 10:44 a.m.
- Gaming’s financial execs weigh in on tough times (11-17-2009)
Beyond the Sun
As the national economy begins to recover, the gaming industry will follow.
That was the message American Gaming Association President Frank Fahrenkopf delivered at a media briefing today during the first day of the Global Gaming Expo at the Las Vegas Convention Center. The national advocate for the commercial casino industry discussed revenue declines in the industry and his outlook of the future.
“Many of the economists have been saying that the recession is over. I think that is more of a statistical technicality than a practical reality,” Fahrenkopf said. “Main Street is still feeling the heart of the economic downturn and the same has to be said for the gaming industry.”
At a national level, Fahrenkopf said gross gaming revenue was down for the third quarter to $7.94 billion, a 5.5 percent drop from the third quarter of 2008.
“As long as consumer discretionary spending is down, our industry and those like it will continue to suffer,” Fahrenkopf said.
Some states, like Colorado, Indiana and Missouri, saw gains during the third quarter. Pennsylvania also has seen growth, which has come at the expense of Atlantic City, Fahrenkopf said.
In a survey by the AGA conducted in the first two weeks of October, 260 newsletter subscribers weighed in on their feelings on a recovery in the gaming industry.
Forty-four percent said they believed business conditions are getting somewhat better while 31 percent said they believe conditions remain depressed but are getting neither better nor worse.
When asked to predict when the gaming industry would recover, 44 percent said they see a recovery in three to four years while 23 percent said within one to two years.
“Everyone is telling me that it has bottomed out but it’s not a flat bottom; it seems to be a rocky bottom. The good thing is people seem to be coming to the destination cities, there’s just not the same amount of discretionary spending,” Fahrenkopf said. “The key is how quickly we can get people back to work.”
Like gaming revenue, this year’s Global Gaming Expo has seen declines as well. Attendance is expected to be down 5.7 percent to 25,000 in 2009 compared to 26,500 in 2008.
Both exhibitor numbers and the amount of exhibitor space are down this year because of smaller companies that have gone out of business, Fahrenkopf said. G2E will house 566 exhibitors in more than 258,000 square feet of exhibit space compared to 724 exhibitors in 335,480 square feet of space in 2008.
Fahrenkopf reiterated statements made by several casino operators and tourism officials in Las Vegas during the last few months. He said that while visitors are still coming to the city, they are spending less than in prior years.
Fahrenkopf said the addition of CityCenter will bring two things Las Vegas needs: More jobs and hopefully more visitors.
“Whenever a new project opens, people want to come see and participate in it and we hope that’s going to be the impact of CityCenter.”