Monday, Dec. 6, 2010 | 9:01 p.m.
After tumbling during the recession, Nevada gaming revenue should return to 2007 levels by 2014.
That’s according to a report to be released Tuesday by national accounting firm PwC (PricewaterhouseCoopers LLP).
As opposed to the frequent negative comments focusing on the oversupply of Las Vegas hotel rooms, PwC had some positive comments in the report about the competitiveness of the state’s gaming industry.
In its "Playing to win" gaming industry outlook report, PwC acknowledged "Las Vegas is currently hunkered down for a relatively gradual recovery, since experience shows that an upturn in vacations to casino gaming centers tends to lag about 12-18 months behind a rebound in the economy."
But PwC also said: "As the global economy recovers, and international visitors return alongside domestic visitors, Nevada continues to be better placed to capitalize on the upturn than Atlantic City, since Nevada is less affected by competition from regional casinos."
"This means Nevada should be able to absorb the new capacity and start to rebound, once the economies and disposable income improves," PwC said.
Nevada gaming revenue has been rising during the second half of 2010, with casinos winning nearly $918 million in September. The win was up 0.73 percent from September 2009 -- and from July through September it was up 2.33 percent vs. the same time period of 2009.
Still, PwC forecast Nevada revenue for 2010 will end up down 2.9 percent and then begin to recover in late 2011, with mid-single-digit gains projected for 2012-2014.
The Nevada market is expected to grow at a 4.1 percent compound annual rate, from $10.2 billion in 2009 to $12.5 billion in 2014.
The short-term forecast is in line with the prediction of analysts for Fitch Ratings, who expect a return of convention business to Las Vegas will help boost business overall in the city in late 2011 and 2012.
The PwC report projects total U.S. gaming revenue will increase to $68.3 billion in 2014 from $57.2 billion in 2009, a 3.6 percent compound annual increase.
PwC also projected that through 2014, investment in the gaming industry will increasingly flow to the Asia Pacific market -- but that the United States will remain the largest gaming market.
Asia Pacific gaming revenue is expected to grow at a rate of 23.6 percent compounded annually -- to $62.9 billion in 2014 from $21.8 billion in 2009.
As for the growth of Internet gambling, PwC noted intrastate online horse racing betting is legal in 16 states and other states continue to look at various online wagering proposals on an intrastate basis as a way to generate revenue.
"And federal legislation to legalize and regulate online poker is expected to reach the statute book within the next two to three years," said the report, which didn’t mention the current efforts by Sen. Harry Reid to have such a bill passed.
"The potential federal legalization of interstate online poker games in 2012-2013 will serve to legitimize the online gaming market in general, boost usage and act as a catalyst for developments in other online gaming disciplines," the report said.
Consultants at PwC also said the casino gambling industry faces competitive challenges from the fast-growing non-gambling entertainment industry.
"In markets across the world, the proliferation of digital challenges and services is driving an explosion in the entertainment choices available to consumers, ranging from 3D movies to mobile TV to massively multiplayer online games," the report said. "The single biggest challenge facing the (casino) industry will be staying close to its consumers -- at all levels of spending -- and ensuring the experience remains sufficiently compelling to override other potential choices."