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Chris Sieroty
 

Nevada, U.S. casinos slowly recovering from recession

10 May 2012

The U.S. casino industry continued to show a modest recovery from the recession in 2011 as gaming revenues increased 3 percent nationwide, but downtown Las Vegas and Reno continued their slide down the list of the nation's top gaming markets.

The American Gaming Association's 2012 edition of the "State of the States" survey, released Wednesday for the first time, didn't rank downtown Las Vegas among the top 20 U.S. casino markets in 2011.

The area, which includes the Golden Gate and Plaza, was ranked as high as 13th in 2005, when it brought in $654.12 million in revenues and was at No. 20 in 2010 with $493.29 million.

Charles Town, W.Va., 75 miles west of Washington, D.C., replaced downtown Las Vegas at No. 20, with $541.93 million in gaming revenue. The American Gaming Association said new casinos, expansion of table games - in Charles Town and elsewhere - and new gaming markets pushed downtown Las Vegas out of the top 20 markets.

The Reno/Sparks area fell one spot, to No. 14, with $663.28 million, down from $684.05 million in 2010. The Boulder Strip area climbed one rung, to No. 10, with $778.8 million, up from $757.03 million in 2010.

Las Vegas remained the top U.S. gambling market last year, bringing in $6.06 billion, compared with $5.77 billion in 2010. Gaming revenues in Nevada increased 2.9 percent last year to $10.7 billion from $10.4 billion in 2010.

Gaming employment in Nevada was down 0.4 percent, 643 jobs, to 174,381. Tax revenues generated by Nevada casinos were up 3.6 percent, to $865.25 million in 2011, from $835.42 million in 2010. In 2009, tax revenue was $831.75 million.

The report covers only commercial casinos and excludes those of American Indian tribes. The survey looks at how the casino industry was affected last year through national and state economic data and public opinion surveys.

The gaming association's survey found commercial casinos in 22 states collected $35.64 billion in gross gaming revenues in 2011, a 3 percent increase from $34.6 billion in 2010. The industry collected $30.74 billion in 2009.

"The state of the industry is good; the prospects for its future are solid," said Frank J. Fahrenkopf Jr., president and CEO of the Washington, D.C.-based American Gaming Association.

Fahrenkopf said he isn't concerned that proposed legalized online gaming will harm casinos.

After the survey's release, Fahrenkopf said online gaming, especially poker, targets younger players who will find their way to casinos. He said a shift in relatively small revenues from poker shouldn't result in a significant change for casinos.

Seven of 22 states reported declines in gaming revenues.

Fahrenkopf said the largest increases came from states where new casinos opened during 2011 or had a first full year of operations. Maryland experienced the largest year-over-year growth in gaming revenues, reporting a 464.2 percent increase from $27.6 million to $155.7 million.

Pennsylvania remained the third-largest U.S. gaming market with $3.02 billion in gaming revenues in 2011, gaining more ground on No. 2 New Jersey, which reported revenues of $3.32 billion.

Fahrenkopf said Atlantic City continues to be hurt by regional competition but predicted 2012 should be a better year as "Revel could help turn things around." But he was surprised to learn Revel's first-month casino revenues were only $13 million.

New Jersey, with 12 casinos, showed the largest decrease in revenue among U.S. gaming markets, down 7 percent from $3.57 billion in 2010. New Jersey gaming employment declined 3.9 percent, 1,322 jobs, to 32,823.

"There is no question that the Pennsylvania market is the reason for the downturn over the past few years" he said.

Gaming tax revenues nationwide increased 4.5 percent last year to $7.93 billion. The number of commercial gaming jobs fell 0.4 percent to 339,098, while wages dropped 2.9 percent to $12.9 billion.

"Gaming companies are providing much-needed jobs and tax revenues to communities across the nation at a time when both are greatly needed," Fahrenkopf said.

The "State of the States" report includes a section on public opinion about the casino industry. According to the survey of 800 people nationwide, 27 percent of Americans, 57 million people, visited a casino in the past 12 months.

The American Gaming Association found that the lottery, at 44 percent, was the most common form of gambling, while 4 percent of the population placed a wager online during 2011.

The survey indicated 76 percent of those who visited casinos in 2011 said they ate at a fine dining restaurant and 62 percent said they saw a show or concert during their visit.