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Cy Ryan

Strip's Gaming Profit Soars

2 February 2005

CARSON CITY, Nevada -- The 41 big casinos along the Las Vegas Strip posted record profit in the past fiscal year, generating more than $1 billion in net income.

The state Gaming Control Board reported today the 258 casinos statewide that grossed more than $1 million reported net income before federal income taxes and extraordinary items of $1.325 billion, the second highest profits in history.

Frank Streshley, senior fiscal analyst for the board, said, "The Strip drove the state." There was tremendous growth on the Strip and a major reason for the increase was in the non-gaming areas, he said.

The board said total income from the Strip resorts reached $11.7 billion, a 12.1 percent increase from a year ago. Net income on the Strip was $1.03 bllion, up 99.7 percent.

There were 3,000 new rooms added on the Strip in fiscal 2004 that ended June 30 last year. "Usually there is a drop in the occupancy," when new rooms are added, Streshley said. But the occupancy for the year rose from 91.2 percent to 92.2 percent and room rates increased from an average of $103 to $113 per night.

Revenue from the rooms rose 19.5 percent to $3.8 billion compared to the previous year. The board said gross revenue from gaming reached $9.9 billion, up 6.8 percent. Revenue from food jumped 9.7 percent to $2.7 billion; beverage revenue was up 10 percent to $1.1 billion and other revenues accounted for $2.1 billion, up 7.9 percent.

Statewide, the profits were second to 1996 that reported $1.355 billion. During the 2004 fiscal year that ended June 30, the return on investment was 6.8 percent. While clubs in Southern Nevada showed increases in profits, the casinos in many Northern Nevada areas posted decreased net income levels.

Total revenue in the casinos statewide reached $19.6 billion, up 8.9 percent.

Downtown Las Vegas casinos reported $42.1 million in net revenue, up 76 percent from fiscal 2003, and $1.1 billion in total revenue, unchanged from fiscal 2003.

In contrast to the Strip casinos where 41.9 percent of the total revenue comes from gaming, the downtown clubs receive 60 percent of their income from the tables and slot machines.

The 31 clubs on the Boulder Strip also enjoyed a banner year. Streshley said they posted a record $100.9 million in net income, up 9 percent.

Total revenue reached $1 billion,up 8 percent, with 74.3 percent of Boulder Strip revenue coming from gaming.

The 9 casinos in Laughlin reported a total $42.8 million loss. Streshley said that was the result of an $80 million write-down of assets by one of the casinos. Without that, the net income would have been up $46.1 million, a gain of 200 percent from the previous year.

Revenues in Laughlin casinos reached $862.8 million with gaming accounting for 63 percent of the total.

Net income in the balance of Clark County casinos was $88.3 million, up 32.8 percent. Total income in the market, believed to include properties in rimm, Jean as well as the Suncoast and other properties in suburban Las Vegas, reached $1.8 billion, with 65.9 percent coming from the gaming.

The board said casinos in Washoe County reported $41.9 million in net income, down 11.3 percent; South Shore Lake Tahoe casinos fell 12 percent to $34.9 million; Elko County clubs were down 17.5 percent to $14.7 million and Carson Valley reported a 66.1 percent plunge in profits to $3.1 million. The balance of the state reported $16.2 million in net income from the casinos, up 34.3 percent.

Compared to 2000, the report shows that the gaming tables and slot machines are contributing less of the total revenue to the resorts in the state. Last fiscal year, gaming accounted for 50.5 percent of the $19.5 billion, down from 51.5 percent in fiscal 2003 and 53 percent in fiscal 2000.

In 2000, the 37 largest casinos on the Strip reported 45.9 percent of their income came from gaming. In fiscal 2004, 41.9 percent of the biggest casinos' revenue was received from the tables and slot machines.

Last fiscal year, 53.5 percent of the gaming revenue in Strip casinos came from slot machines with 43.4 percent from the table games including keno and bingo. The sports pool and the race book each accounted for 1.1 percent of the $4.9 billion in gaming income.