State’s biggest casinos end seven straight years of losses

By Thomas Moore

Wednesday, Jan. 11, 2017 | 12:43 p.m.

The state’s gaming industry is reaching pre-recession levels of income, according to the annual Nevada Gaming Abstract, a comprehensive review of the industry’s financial results released Wednesday.

“We all know things (in the economy) are improving, and it’s kind of widespread across the state,” said Michael Lawton, a senior research analyst with the Nevada Gaming Control Board’s Tax and License Division. “I was bit surprised because I thought there might be one area that wouldn’t record net income, but they all did. And that hasn’t happened since 2006.”

The biggest casinos (the 273 gaming venues that grossed $1 million or more in revenue in 2016) generated $979 million in income compared to the 2015 fiscal year’s net loss of $662 million, according to the Nevada Gaming Control Board.

“This ends a streak of seven straight losses,” Lawton said. “The last time we saw income was fiscal year 2008.”

“Total revenue generated in all departments was $25.2 billion compared to 24.6 billion last year,” Lawton said. ”That’s an increase of 2.6 percent, or $ 643.5 million increase from the previous year.”

Lawton said people are gambling more, but the positive numbers can be attributed in part to better results from non-gaming sources.

“Gaming revenue has increased five of the last six years,” Lawton said. “But it still remains well below peak levels. In fact, it’s 13.8 percent below the peak levels recorded in fiscal year 2007, while room revenue is at an all-time high. We have recorded records for room revenue in three consecutive fiscal years.”

More specifically, according to the abstract, gambling revenue made less for casinos in 2016, 42.6 percent of their overall revenue compared to 43.2 percent for the prior year.

But money from hotel rooms added slightly more — 23.1 percent compared to 2015’s 22 percent — while the percentage of revenue from food sales remained the same at 15.3 percent.

Sources of revenue for casinos grossing $1 million or more:

2016

• Gaming, 42.6 percent

• Rooms, 23.1 percent

• Food, 15.3 percent

• Beverage, 6.9 percent

• Other, 12.1 percent

2015

• Gaming, 43.2 percent

• Rooms, 22 percent

• Food, 15.3 percent

• Beverage, 7 percent

• Other, 12.5 percent

And while casinos made more money, they also managed to reduce their costs.

“On the expense side, total expenses decreased by 7.7 percent or $831 million,” Lawton said.

Some significant cuts the casinos made were in interest expenses, which decreased by 20 percent compared to 2015, general and administrative expenses, which decreased by 17.2 percent, and officer payrolls, which decreased by 21.9 percent..

Because these 273 casinos did better, the state of Nevada did better as well. Nevada made $822 million in gaming taxes and fees, or 7.6 percent of their gaming revenue. In 2015, when there were 271 casinos grossing $1 million or more, Nevada made $810 million from gaming taxes.

Statewide casino income or loss:

2016: $983,683,389

2015: -$661,779,138

2014: -$743,688,008

2013: -$1,348,992,937

2012: -$1,212,990,361

2011: -$3,996,656,422

2010: -$3,432,514,103

2009: -$6,778,293,613

2008: $721,181,848

2007: $2,297,481,525