Report: Casino revenue fell 5.5 percent last year

By Amanda Finnegan

Published Thursday, May 6, 2010 | 10:16 a.m.

Updated Thursday, May 6, 2010 | 11:57 a.m.

The U.S. commercial casino industry saw its revenue drop for a second straight year, according to survey results released today by the American Gaming Association. Commercial casinos brought in $30.74 billion in revenue in 2009, a decline of 5.5 percent from 2008.

“I don’t think there is any way to sugar coat it. The past year was tough. The down economy dealt most Americans challenges we haven’t faced in some time, if ever. For those of us in the commercial casino industry, that meant people had less money to spend on our products,” AGA President and CEO Frank Fahrenkopf said during a conference call Thursday morning.

The AGA released its “State of the States” results, a survey that looks at how the commercial casino industry was affected last year through national and state economic data, as well as public opinion results.

Consumer spending at Nevada casinos declined 10.4 percent in 2009 to $10.393 billion, compared to $11.599 billion in 2008. The decline was most likely due to reduced gaming and travel budgets, Fahrenkopf said.

New Jersey took the biggest hit with a 13.3 percent decline in consumer spending due to the recession and increased regional competition. The state still came in second after Nevada with $3.943 billion in revenue in 2009. The opening of two new casinos in Pennsylvania in 2009 drove the largest state increase at 21.6 percent.

No surprise, the Las Vegas Strip still remains the top gambling market in the nation with revenue of $5.550 billion in 2009, a decline from $6.1 billion in 2009. The Boulder Strip came in 10th with $774.33 million in revenue. Downtown Las Vegas fell from the No. 16 spot in 2008 to the No. 18 spot in 2009 with $523.92 million.

“People are just not spending enough. You go through those facilities in Las Vegas and they’re packed but people aren’t spending the money they used to,” Fahrenkopf said.

Reno was No. 12 at $715.23 million and Laughlin was No. 19 at $492.51 million.

Nevada still employs more than half of the nation’s commercial casino workers, despite a 12.3 percent decline in employment in 2009, the largest decline of the 13 states listed in the survey. The state had 177,397 of the country’s 328,377 commercial casino jobs in 2009. Nevada casino employee wages totaled $7.989 billion in 2009.

Nationwide, the number of commercial casino employees dropped 8.1 percent.

The decline in consumer spending also hurt 2009 gaming tax revenue, the report indicated. U.S. commercial casinos contributed $5.59 billion to state and local governments in 2009, a decrease of 1.9 percent compared to 2008. Seven of the 12 states included in the report saw tax revenue decline in 2009.

Nevada saw a 10 percent decline in gaming tax revenue. Revenue fell to $831.9 million in 2009 from $924.5 million in 2008. Pennsylvania, which has a tax rate of 55 percent, saw the largest growth in tax revenue, at 21.2 percent, totaling $929 million in 2009.

The report indicated consumers spent more on commercial casino gambling than they did on movie tickets, candy or outdoor equipment in 2009, but considerably less than consumer electronics, home remodeling or cable TV. More than a quarter of the U.S. adult population visited a casino in 2009.

When asked about their favorite casino games, 59 percent of survey participants said they prefer slot machines. Blackjack was a distant second at 18 percent and poker was third at 7 percent.

Poker revenue in Nevada and New Jersey continued to decline in 2009. Revenue fell from $155.7 million in 2008 to $145.6 million in 2009. Poker revenue peaked at $168 million in 2007, according to the survey.

This year’s “State of the States” report included an “attitudes among casino county residents” section. Of the residents polled, 58 percent said they have not visited a casino to gamble in the past year. Of the residents who said they gambled at a casino in the past year, 63 percent said they gambled at a casino in their area and 17 percent said outside of their area.

Residents of casino counties felt favorably about the effect of casinos in their community. The report said 64 percent think casinos have had a positive impact on the community and 69 percent said casinos have a had a positive impact on the area’s tourism industry.