Nevada casinos posted profits in fiscal 2016, the first time the industry has been in positive territory since before the Great Recession.
This week, the Nevada Gaming Control Board released their annual Nevada Gaming Abstract, which showed the 273 gaming venues that earned more than $1m in revenue in the 12 months ending June 30, 2016 generated a combined income of $979m versus a net loss of $662m in fiscal 2015.
Overall revenue at state-licensed gaming venues reached $25.2b, up from $24.6b in fiscal 2015, and only around $100m off the all-time peak of $25.3b in fiscal 2007. Casinos also trimmed their overall costs by 7.7%, with significant cuts in payroll (-21.9%) interest payments (-20%) and general and administrative expenses (-17.2%).
Gambling’s share of overall revenue continued to decrease, falling from 43.2% in 2015 to 42.6% in 2016. This waning influence was even more pronounced on the Las Vegas Strip, where gaming’s share of the overall pie fell to 34.2%, down 0.7 points from 2015.
Gaming Board analyst Michael Lawton noted that gaming revenue had increased in five of the last six years but remains 13.8% below its 2007 peak. Most of the other revenue streams (food, beverage and other) were either flat or marginally improved year-on-year, while room revenue improved 1.1 points to 23.1% of overall revenue, the third straight year that room revenue has set a new revenue peak.
Lawton said it had been “a long road” for Nevada to get back in positive territory, but the most encouraging trend was the fact that the casinos were generating net income “in all areas across the board.”
The state’s fiscal 2016 income exceeded 2008’s $721.2m but is less than half of 2007’s pre-recession haul of $2.3b. On the flip side, it’s infinitely preferable to the carnage of those first few post-recession years, including 2009’s $6.8b net loss.
The positive report came hot on the heels of Las Vegas Convention and Visitors Authority data showing that Vegas enjoyed record visitation in calendar 2016, the third straight year that the number of arrivals has hit a fresh peak.