Nevada Casinos Post Record Income

6 January 2006

By Howard Stutz

NEVADA -- Nevada's major hotel-casinos posted their highest net income ever in a fiscal year, generating more than $1.8 billion on revenue of $21.4 billion in 2005, a new report released by the Nevada Gaming Control Board Thursday shows.

The total revenue figure, which included the net income from 268 casinos statewide, eclipsed the nine-year-old record of $1.35 billion in fiscal 1996.

In addition, fiscal 2005, which ended June 30, was the first time total gaming revenue wasn't more than half of the overall revenue generated by the casinos participating in the abstract.

Room revenue was $4.3 billion in fiscal 2005, a 12.1 percent increase from $3.8 billion in fiscal 2004, and was cited as one reason for the variation.

"Room rates were up, plus there were 4,000 more rooms available," said Frank Streshley, senior research analyst for the control board. "That impacted room revenues during the fiscal year."

Streshley said the record net income was the result of a strong 12-month period for Nevada casinos that is continuing into fiscal 2006.

"It's difficult to make predictions, but it seems we're on the same growth pace," Streshley said.

Statewide, gaming revenue was $10.7 billion, 49.9 percent of the total revenue, or a 9 percent increase from $9.9 billion in fiscal 2004.

Clark County, led by casinos on the Strip, drove the state's engine, reporting net income of $1.7 billion, almost 93 percent of the state's overall net income, on revenue of $18.3 billion.

Strip casinos reported a net income of $1.2 billion in fiscal 2005 on revenue of $12.9 billion. The net income was the highest ever for the Strip and a 12.3 percent jump from $1.03 billion in fiscal 2004.

Streshley said the opening of the 2,700-room Wynn Las Vegas in April and a new room tower at the Bellagio that opened in December 2004 helped boost the Strip revenue figures throughout all categories -- gaming, rooms, food, beverage and "other."

Streshley oversees the gathering of the abstract, in which balance sheets and income statements from the various properties are compiled.

The figures are put together for analysts, bankers, casino insiders and other interested parties to give a year-over-year comparison and to help assess the industry's health in the current fiscal year.

Streshley said casinos showed year-over-year increases of between 7 percent and 12 percent in all revenue areas from fiscal year 2004, while the cost of sales and departmental expenses climbed just 6.9 percent in the same time period.

The abstract used figures from 268 of the state's 420 nonrestricted gaming licensees -- casinos with more than 15 slot machines -- that grossed $1 million or more in annual gaming revenue.

He said 14 more casinos compared to fiscal 2004 reported annual gaming revenue of more than $1 million. However, four casinos, including the Castaways, closed during the reporting period.

During fiscal 2005, casinos owned by 21 publicly held corporations accounted for 78.2 percent of the total gaming net income generated statewide.