|The Nevada Gaming Control Board’s monthly report shows that the Iraq war hit Nevada casinos in April, cutting their total win to $744.6 million compared with $799.6 million in April 2002. |
The month's total was a 6.9% year-on-year decrease and a 4.1 % slip from more 'normal' 2001 levels, before the terrorist attacks and the accelerated downturn in leisure travel and the local economy, Gaming Control Board analyst Frank Streshley said.
Clark County casinos won $608.9 million in April, down 5.9 % from $647.1 million in 2002. All other jurisdictions showed similar downturns.
It was the first month of declining casino wins in Nevada since July. The win was 7 % of the total $10.9 billion played in slot machines, on table games and at sports books. NB, “Win” doesn’t translate directly to profits: it is a gross figure with no operating costs or other expenses deducted. It represents casino gaming revenue only.
The state also collected $39.7 million in percentage fees based on the win, down 17.5 % compared with the $48.2 million collected in April 2002. This represents $25 million short of projections for the percentage fees, said Greg Bortolin, spokesman for Gov. Kenny Guinn.
'Today's numbers are bleak,' he said. 'This is a scary trend. Almost two years past 9-11, gaming doesn't appear to be recovering very quickly, and gaming is our lifeblood.'
Industry experts and analysts were, however, more upbeat about Friday's report.
'We took a soft hit, but not a full body punch,' University of Nevada, Las Vegas professor and gaming industry expert Bill Thompson said. 'This is not a sign we're going down, but that we're doing some things well.'
Deutsche Bank analyst Andrew Zarnett said the 'war created a `do not' travel environment among Americans which in great part put an end to trips to Las Vegas for the time being.'
In addition to the war in Iraq, the April decrease was caused by the timing of the Easter holiday compared with last year, said Joe Greff, gaming analyst with Fulcrum Global Partners, an independent Wall Street investment research firm.
'Trends in May are more encouraging, based on our weekly room rate survey and conversations (with operators) in Las Vegas, and the month probably benefited from some pent-up demand,' Greff said. 'This appears to be the case so far in June as well.'
Las Vegas has grown into a major city, and now has to expect to be affected by national events, downturns in the economy or threats of terrorism, he said.
'But we're doing some things well because we're softening the hit we took from the war compared with other travel destinations,' said Thompson, who praised the Las Vegas Convention and Visitor Authority's 'What happens here, stays here' campaign as a strong driver for visitor volume during the period. Discounting room rates in major hotels and other promotions has also helped hold up the gambling numbers.
'Look at the rest of the country, and Disneyland in particular, where tourism is down 10% to 20%,' Thompson said. 'They're all doing worse than we are.'