Las Vegas Strip casinos post $2.5 billion loss in year

By Cy Ryan

Published Monday, Jan. 31, 2011 | 9:15 a.m.

Updated Monday, Jan. 31, 2011 | 11:16 a.m.

CARSON CITY – The major casinos along the Las Vegas Strip suffered a $2.5 billion loss in fiscal year 2010, but it still was a better showing than the previous 12 months, the state Gaming Control Board reported today.

The net loss, which includes gaming, rooms and restaurants, was 38.2 percent less than in the prior fiscal year when the loss was $4.1 billion.

This was the first time there have been two consecutive years of losses. “The picture is not good,” says Michael Lawton, senior research analyst for the board. “The golden goose is hurting.”

Total revenue collected on the Strip reached $18.2 billion, off 5 percent from the previous fiscal year. Of that, total gaming revenue was $8.4 billion, down 5.3 percent from the previous fiscal year.

The board issued its Nevada Gaming Abstract, which showed statewide there were 256 casinos that grossed $1 million or more in gaming revenue. Nevada casinos had a net loss of $3.4 billion from total revenue of $20.8 billion.

That compares favorably with fiscal year 2009, when the statewide net loss was $6.7 billion on total revenue of $22 billion. Casinos cut costs by nearly $4.5 billion to help narrow losses from a stretch in late 2008 and early 2009, state gambling regulators said Monday. The fiscal year ends June 30.

Net loss is the money retained by casinos after expenses have been covered, but prior to deducting federal income taxes and extraordinary expenses. Nevada casinos paid $777.5 million in gaming taxes and fees, or 7.8 percent of their casino revenue.

The 39 major casinos on the Strip reported room revenue was off 7.8 percent with occupancy falling from 89.5 percent to 88.4 percent. The average room rate dropped to $112 compared to $124 in fiscal 2009.

But liquor sales rose by 7.4 percent at Strip casinos, indicating tourists are spending less on rooms and gambling, but more on booze.

Gaming win on the Strip accounts for 47.5 percent of the statewide total.

Clark County had 148 casinos grossing $1 million or more in gaming revenue and they generated a combined net loss of $3.3 billion from total revenue of $18.2 billion. Downtown Las Vegas casinos reported a net loss of $73.7 million, compared to $54 million in the prior fiscal year.

Washoe County had 31 casinos that reported a net loss of $27.5 million from revenue of $1.4 billion. Elko County had 18 casinos with $37 million in combined net income.

The Carson Valley area had 13 casinos that posted a net loss of $435,875. South Lake Tahoe’s five casinos reported a net loss of $90.3 million.

The abstract report also includes information such as the average number of employees, rate of room occupancy, revenue earned per room per day and gaming revenue earned per square foot of gaming floor space.