In spite of the old adage that the house always wins, that doesn’t seem to be the case in Las Vegas. Recent reports of earnings from the Nevada Gaming Control Board shows that in 2013 the largest casinos in fabulous gaming city of Las Vegas experienced a combined net loss of $1.3bn.
The Gaming Control Report sets out the incomings and outgoings of all the casinos in Vegas with a gross income of over $1m in gambling revenue and makes for a gloomy account of the takings at the biggest houses. The 2013 losses represent the fifth consecutive year in which the largest casinos in Las Vegas have posted net losses.
The main reason cited for losses by the major casinos was the rising costs incurred in expenses. The main area of expense for casinos is their staffing, but other items such as renovation, complementary beverages and other aspects of running the business.
Throughout the financial downturn, the way in which people have been using casinos has changed and this has had an impact on the way in which casinos make their money. The cost of keeping multiple gaming tables open on the floor is high when you have one gambler at each table playing for low stakes. However, closing tables can have an adverse impact on the way that patrons view the casino and it’s a constant balancing act between looking the part and keeping costs low. Overall, it seems, the odds have not favoured the house in this instance and costs have outstripped the income raised through direct gambling incomes.
All is not lost for the casinos, however, and where revenues directly related to gambling have struggled casinos have posted positive income statements relating to the overall takings in casinos. While gamblers may not be wagering in the same way as they have in years gone by, they are nonetheless continuing to visit Vegas and the money earned from hotel stays, food bills and bar tabs paint a more positive picture of the way casinos have responded to the change in business brought about by the global recession.
Revenues are picking up – but in areas other than gambling
There is also a sign that the hotels and casinos in Vegas are diversifying to capitalise on a different type of market than those who visit the town purely to sit at the gaming tables. A growing tourism market where people visit to see the sights of the Nevada desert and of Vegas as a spectacle in itself are a growing demographic that the entertainment industry are doing a good job of capitalising on.
Growth on the Strip
The strip is on the up
While the overall gambling income across Las Vegas and around Nevada as a whole continue to be in the red, takings on the Strip have shown encouraging signs of recovery. Profits from gambling overtook those made from non-gaming earnings such as rooms and dining for the first time in seven years and were up 3.5 percent on the previous year. The combined total revenue of the Strip when gambling and non-gambling incomes were combined amounted to a very healthy $15.5bn.
The casino businesses of Las Vegas have been hit hard by the financial downturn as hard-pressed gamblers have had to restrict their gaming and tighten their belts. However, with the most recently reported figures for 2013 it seems as though the economy, and the gaming industry, may finally be turning a corner as gamblers return to the tables and casinos and hotels capitalise on a new class of clientele looking to see the sights of Las Vegas and the wider attractions of Nevada.