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Gaming Guru

Ed Vogel
 

Nevada Economy: State Gaming Revenue on a Roll

13 July 2004

CARSON CITY -- Nevada's gaming industry blossomed in May as casinos raked in $908 million from gamblers, nearly a 13 percent increase over the same month last year, the state announced Friday.

Gaming Control Board statistical analyst Frank Streshley attributed the large increase to an improved national economy and to tourists drawn to Las Vegas late in the month for the Eagles and Madonna concerts.

In Clark County, casinos took in $749 million in gaming revenue, up 15 percent from May 2003. The Strip's take was $469.4 million, a 16 percent increase. Revenues in Washoe County, however, were $90 million, a 3 percent drop from May 2003.

"The gain is definitively due to the national economy and improvements in the economies in the Pacific Rim (nations)," Streshley said.

He said Madonna draws high-end players. Some of the fans at her Memorial Day weekend concert also stayed in Las Vegas for the June 5 Oscar De La Hoya fight in early June, he said.

He said gaming operators told him early June revenue continued at high levels.

The economic boom has led to four consecutive months with double-digit increases in gaming revenue. Gaming winnings each month from February through May also set monthly records.

The double-digit increases are especially significant because they are not attributable to the opening of any new Las Vegas megaresorts, Streshley said. In the 1990s, double-digit increases in gaming winnings were common, but they followed the openings of new resorts.

Because of the boom, Nevada's state treasury took in $38 million more in gaming taxes in the past 12 months than the expected $639 million. The gaming tax receipts of $677 million were 21 percent higher than the $559 million in taxes taken in during the previous fiscal year.

Part of the gaming tax increase, however, is attributable to the law enacted last year that changed the tax rate from 6.25 to 6.75 percent.

"I am pleased with the resurgence and strength of our state's largest industry, considering the proliferation of gaming nationwide, especially next door in California," Gov. Kenny Guinn said in a statement.

Because of the high gaming tax receipts, Guinn said the state's general fund budget is about $100 million above projections.

Without tax increases approved last year, Guinn said, he would have had to make $270 million in cuts in education, public safety and welfare budgets.

Besides the gaming tax bulge, there have been big increases in revenue from sales taxes and the new tax on real estate transfers.

But tax critic George Harris said last year's tax increases were a mistake. He said Guinn should have realized the economy is cyclical. Harris faces a July 20 deadline to secure enough signatures on a referendum that would allow voters in November to repeal the tax increases.

"Kenny Guinn proves again he doesn't have a brain in his head," Harris said. "We were in a recession and now we are out of it. Nevada is definitively the place to be. We should not be penalizing our citizens for doing well."

He said Guinn should take $50 million of the extra money and place it in the state's rainy day fund, but give the rest back to citizens as tax rebates.

Greg Bortolin, Guinn's spokesman, said Harris' assessment is wrong.

"If we went along with George Harris, the governor would be cutting $270 million out of education, public safety and welfare. There is a $100 million surplus because legislators passed the budget, including the tax increases. George is just spewing philosophically without facts to back him up."

Streshley said the revenue decline in Washoe County was the first in four months. He attributed it to the growth of American Indian gaming in California, particularly the Thunder Valley casino near Sacramento.

Washoe County's revenue in recent months had been high because of a bowling tournament and other special events, according to the gaming spokesman.

High gasoline prices also might have caused the decline in Washoe County, where 80 percent of visitors arrive by car.

Although gasoline prices have not affected tourism in Southern Nevada, Streshley said there have been reports from gaming operators that outlying areas have been hurt. He noted gaming revenue in Laughlin was up 1.5 percent, while Mesquite revenue increased by 2.4 percent.

Through the entire state in May, baccarat winnings were $48.3 million, up 25 percent, while blackjack winnings climbed to $117.6 million, a 19.3 percent increase. Craps winnings rose 9.7 percent to $42.6 million. Slot winnings were up 12.2 percent for a total win of $592.4 million.