Friday, February 14, 2003
Copyright © Las Vegas Review-Journal

NEVADA ECONOMY: State gaming win drops in '02

Decline marks second straight annual slide

Colorado residents Bill Carey, left, and Scott Flores take time away from the National Finals Rodeo to play blackjack at Sam's Town in December. Nevada's statewide gaming revenue declined last year, a Thursday report by the Gaming Control Board shows. Photo by JERRY HENKEL/ REVIEW-JOURNAL Click on the image for an enlargement. Graphic by Mike Johnson.

Nevada casinos won a bit less money from gamblers last year, the second straight year statewide gaming revenue declined, a Thursday report by the Gaming Control Board shows.

The post-9-11 travel slump caused the 2001 decline, the first year the state's win dropped since regulators began keeping tabs in the early 1980s.

Gov. Kenny Guinn said the year-end numbers may not be the end of the casino business slowdown.

"Gaming win has now declined two straight calendar years, reflecting the downturn in the economy without any sign of a strong recovery in the near future," Guinn noted in a statement.

The state's 342 casinos won $9.4 billion in 2002, down 0.3 percent from 2001, but control board analyst Frank Streshley said the results suggest some improvement over the course of the year.

In the first half of the year casino win was down 3.5 percent, mainly because of tough pre-Sept. 11, 2001, comparisons, Streshley said.

But the final six months of 2002 were better, rising 3.2 percent.

"There are signs of a rebound," he said, although he noted that three-plus months were easier comparisons against post-Sept. 11 results.

Streshley said one of the most eye-opening results in the year-end report was the continuing drop in baccarat drop and win.

Baccarat gamblers lost $419.7 million in 2002, down 4.9 percent from 2001, which was down 18.6 percent from 2000.

Baccarat win has declined in four out of the past five years, and last year's win was the smallest in nine years, far below 1995's peak of $4.1 billion, Streshley added.

Casino industry analysts said the reason for the baccarat decline is clear.

"Domestic high rollers haven't come back," Jeffries & Co casino industry analyst Larry Klatzkin said. "The international high-end play has returned, the operators are saying, but the domestic (high-end) play's just not back."

Streshley said casino operators blame the stagnant economy and declining markets for the domestic downturn.

Casinos played luckier than normal in 2002, holding almost 22 percent of bettors' buy-ins, better than the 18 percent average expected hold, Streshley said.

The Strip's 42 casinos won $4.7 billion last year, down 1 percent. The Strip's haul represented 49.3 percent of the statewide win, down from 49.6 percent last year and 50 percent in 2000.

Slots won $6.3 billion statewide, up 1.2 percent; table games won $3.1 billion, down 2.9 percent. Slot win accounts for 66.4 percent of the statewide win, a record high, up from 65.5 percent last year and 58 percent in 1990.

The control board's release included December results, with the state's casinos recording a 6 percent increase in the money won from gamblers, $731.7 million.

January tax collections based on December results were $37.5 million, $2.8 million above the Economic Forum's state budget projections. Those results boosted lagging numbers earlier in the 2003 fiscal, contributing to an $18.2 million gaming tax collection deficit.

"We still remain well below the Economic Forum's forecast for fiscal year 2003," Guinn said.