|The most recent fiscal year was the worst on record for Nevada’s 342 casinos, the Gaming Control Board reported Tuesday. |
The downturn directly cuts state revenue, as Nevada relies on gaining one-third of its budget from taxes levied on casinos, said Greg Bortolin, Gov. Kenny Guinn's spokesman.
The $9.3 billion Nevada casinos won from gamblers in the fiscal year ended June 30 was a 3.7 percent drop from the $9.7 billion won during the prior year, the worst year-over-year performance in the 17 years recorded by state statisticians.
Strip casinos reported a 7 percent drop in money won from bettors, to $4.5 billion from $4.9 billion.
Fallout from a worldwide economic slowdown and the travel decline that followed the Sept. 11 suicide hijackings combined with a lack of mega-resort openings to produce the downturn, University of Nevada, Las Vegas economics professor Keith Schwer said.
And reduced revenues mean reduced taxes for state coffers. Most casinos pay a tax of 6.25 percent of the money won from gamblers; some smaller casinos pay less.
The state collected $554.6 million in percentage-fee taxes during the fiscal year, $10.4 million less than the $565 million collected during the prior year.
'We're not getting the gaming revenue we projected and it continues to have an impact on our budget,' Bortolin said. 'The Governor has to make some really tough budget decisions in the coming months, and the Governor's Task Force on Tax Policy has a report due later this year.'
The problem is the state's reliance on cyclical revenue sources like gaming and sales taxes, said Schwer, director of UNLV's Center for Business and Economic Research.
'Nevada is like 40 other states with current fiscal troubles,' Schwer said. 'The state's reliance on cyclical revenues, combined with the expenditures that are relatively flat, creates a pinch in an economic downturn.'
Schwer projects minimal growth over the next two years, noting that no new mega-resorts are scheduled to open before 2005, when Steve Wynn's planned Le Reve is slated to open.
The Palms and Green Valley Ranch were the two biggest casino openings during the fiscal year; the Flamingo Reno and Vacation Village were the state's only big casinos to close.