Gambling's Shrinking Piece of the Pie

The popular notion that Nevada tourists are placing more emphasis on entertainment and shopping and less on gaming certainly shows up in casino revenue numbers.

Gaming's share of overall casino revenue statewide fell from 61.2 percent in 1986 to 44.8 percent last year, according to the UNLV Center for Gaming Research.

Gambling used to generate well over half of all revenue in Las Vegas Strip resorts, but now that share is barely more than one-third. The balance sheets on the Strip now reflect noticeably higher percentages of revenue from rooms, food purchases and entertainment.

Gaming research center data shows that daily casino pit revenue per room in the average big Strip casino remained relatively flat from 1999 to 2012. But daily revenue per room from food and beverage sales roughly doubled during those years.

Casinos generated a record $277.28 in gaming revenue per Clark County visitor in 2007, according to data supplied by the Las Vegas Convention and Visitors Authority. Although Las Vegas hosted a record 39.7 million visitors last year and county gaming revenue increased each of the past four years, average gaming revenue per visitor has declined each year since 2007, down to $236.61 in 2012.

At least where casinos are concerned along the Las Vegas Strip and downtown, the drop in gaming's share of total revenue has been a gradual process decades in the making. The Strip hasn't derived a majority of its revenue from gaming since 1998.

While downtown casinos still recorded 54.2 percent of their revenue from gaming last year, that was considerably below the 69.3 percent logged in 1986.

It's a far different story along the Boulder Strip, where gaming accounted for 70 percent of the revenue last year. That was actually an increase from 67.4 percent in 1986. Since then the Boulder Strip has shown only a slight increase in the share of revenue taken by room stays, and slight decreases in the shares attributed to food and entertainment.

Other parts of Clark County, including North Las Vegas, Primm and Mesquite (but excluding Laughlin) also derive a majority of their casino revenue combined from gaming. But that share slipped from 70.3 percent in 1990 to 64.7 percent last year.

Despite the decline in the percentage of Nevada casino revenue derived from gaming, actual gaming revenue statewide had been climbing steadily from the $3.1 billion collected in 1986 to the record $12.8 billion accumulated in 2007. But after the recession hit toward the end of 2007, statewide gaming revenue tumbled to $10.4 billion in 2009.

Nevada gaming revenue went back on the upswing in 2010 and stood at nearly $10.9 billion as of last year, but that was still below the totals for 2005 through 2008.

A closer look at gaming revenue shows that the sources of that revenue differ sharply depending on where one gambles. For casinos statewide, slot machines generate close to two-thirds of that revenue.

On the Boulder Strip, slot revenue now accounts for close to seven times the revenue generated from table and card games, as well as race and sports books, keno and bingo. At downtown casinos, slot revenue is slightly more than triple table and game revenue.

But on the Strip, table and game revenue slightly outpaces slot revenue. While the Strip accounted for 81.5 percent of the state's table and game revenue in 2012, those resorts contributed only 42.9 percent of Nevada's slot revenue.

 


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