Nevada casinos report $1.13 billion in fiscal '98 net profits

CARSON CITY, Nev. -- Nevada's major hotel-casinos had combined net profits of $1.3 billion in fiscal 1998 for a 3 percent gain over the previous year, a new state report showed Wednesday.

That's a big improvement from fiscal 1997 when the big resorts netted $1.1 billion for a nearly 19 percent slump in profits, according to the Gaming Control Board report.

"Obviously, this year was a recovery from the previous year in terms of net income," GCB spokesman Russ Guindon said in detailing the board's annual Gaming Abstract.

But Guindon added Las Vegas Strip clubs weren't as profitable as they were a year earlier. And downtown Las Vegas casinos had big losses.

Statewide, the net profit before taxes works out to 8.2 percent of total gross revenues of $13.88 billion in the fiscal year that ended last June.

On the expense side of the ledger, the clubs generally held steady or had modest year-to-year increases in payroll, advertising, complimentary services to high-rolling gamblers, taxes, utility bills and other categories.

There was a $112 million drop, to $739 million, in a catchall "other" category that includes various legal expenses, architectural fees, insurance premiums, garbage bills and assorted other costs.

And there was an $18 million drop, from nearly $107 million to about $89 million, in money spent on hiring entertainers and musicians.

All those costs are listed under general and administrative expense, which totaled $4.28 billion. That's up only $13 million from the previous year.

But in the "cost of sales" accounting category, an $8.46 billion total was more than $500 million higher than the previous year's total.

"Cost of sales" includes the money spent on supplies for all hotel-casino operations - everything from new card decks for blackjack tables to food for restaurants and booze for bars.

The category used up 61 percent of the gross revenue. That's up from 59.6 percent in the previous fiscal year. General-administrative costs took nearly 31 percent, down a point.

The report is based on financial data from 235 casinos that each grossed more than $1 million during the year and account for almost all of Nevada's casino revenues.

Resorts in southern Nevada accounted for 80 percent of the gross revenue - down 3 percent from 1997 - while Reno-Sparks-North Tahoe resorts accounted for 12.6 percent - up about 5 percent from the previous year.

A breakdown shows big clubs on the Las Vegas Strip grossed $7.4 billion and netted $802.8 million. That's down from a $906.4 million net a year earlier.

Downtown Las Vegas resorts grossed $1.12 billion and reported a net loss of $853.7 million. In fiscal 1997, the downtown clubs reported a net loss of $49.8 million.

Major clubs in the Reno-Sparks-North Tahoe area grossed $1.58 billion and netted $88.8 million. That's up from $82.6 million in fiscal 1997.

Clubs at Stateline, on Lake Tahoe's south shore, grossed $477.2 million and netted $34.8 million. That's down from a $52.8 million net in 1997.

In Elko County, clubs grossed $294.2 million and netted $23.2 million. That's down from $29.2 million a year earlier.

Casinos in the Carson City-Minden-Gardnerville grossed $110.3 million and netted $3.3 million. That's up from $2.6 million in the preceding year.

The $13.88 billion in statewide gross revenues in fiscal 1998 includes $7.74 billion from casino games, or 55.8 percent of the total. Hotel rooms accounted for $2.32 billion, or 16.7 percent. Restaurant food accounted for $1.75 billion, or 12.6 percent; and liquor and other bar sales for $721.4 million, or 5.2 percent.

The only significant changes in those percentages included a drop from 56.4 percent in casino games in fiscal 1997, and an increase from 12.2 percent in restaurant revenue. Hotel room and bar sale percentages held steady.

The net profit, which drops even further once federal income taxes are paid, is the money left over after various expenses and state taxes are deducted from gross revenues. The clubs paid $590.8 million in state gaming tax and license fees.

Depending on individual clubs, the federal taxes can take as much as half of the net revenues.

archive