Major gamers: $1.6 billion turnaround seen in 2016
Nevada’s major non-restricted gaming properties reported income of $978.9 million for Fiscal year 2016.
That’s their net before federal income tax and extraordinary items for the 273 properties that made $1 million in gaming revenue or more.
Gaming Control Board Analyst Mike Lawton said that’s a $1.6 billion swing compared to the $661.8 million net loss those same properties reported in 2015 and the first time those casinos have reported a positive net income since fiscal 2008.
Total revenue for all departments in those resorts came in at $25.2 billion, up $643.5 million from the previous year. That’s the sixth consecutive increase in total revenue, now just a percent under the record reported in 2007.
A significant part of the overall equation is the decrease in General and Administrative expenses — primarily the resorts’ ability to renegotiate loans and debts to lower interest rates. Statewide, G-and-A expenses decreased by more than $830 million to $9.9 billion.
Gaming revenue totaled $10.8 billion for the year but that amounts to just 42.6 percent of the total. Although gaming revenue has increased in five of the last six years, it continues to account for a smaller and smaller percentage of total revenue.
Room, food and beverage revenues continue to rise much faster, setting all time records for the third consecutive year. Altogether, non-gaming revenues accounted for 57.4 percent of the total. That includes $5.8 billion in room revenues, up nearly 8 percent, $3.9 billion from food, a 3.1 percent increase, and $1.7 billion from beverages, a 3 percent increase and that category’s sixth consecutive record. The catch-all “other” category makes up the remaining $3 billion in total revenue.
“Overall it’s just a really positive report that’s kind of tying in to what we’ve been seeing with widespread recovery driven more by non-gaming than gaming,” said Lawton.
The Carson Valley Area, which includes valley portions of Douglas County, reported net income of $8.4 million in 2016, a 44 percent increase over the $5.8 million net in 2015. Carson Valley casinos have now recorded six consecutive years of positive income. General and Administrative expenses helped the bottom line by decreasing $834,000.
The most dramatic turnaround was by the South Shore casinos at Lake Tahoe where 2015’s $150.8 million net loss turned into a $14.1 million net income in 2016. That change had little to do with gaming where revenues were actually down a percent or $2.1 million. Room revenues rose 22.3 percent helping total revenue for the area to hit $375 million. One reason for the improvement was a full year of operation by the Hard Rock Casino. But another key factor at Tahoe, as it was across the state, was the decreases in General and Administrative expenses. At South Shore, G-and-A expenses decreased $149.4 million.
Washoe County locations reported net income of $143.7 million for the year, a huge swing from the $7.4 million net loss last year. Total revenue for Washoe casinos was $1.5 billion, a 4.8 percent increase even though the number of locations in the non-restricted $1 million plus gaming category decreased by four to 33. Two of those operations — Bourbon Square and the Siena — closed their doors. The other two just fell below the $1 million mark and, thus, aren’t counted in the abstract.
While the abstract breaks out data for Clark County, South Shore, Elko, Carson Valley and Washoe County, it lumps all the rural counties into one category so detailed statistics for those locations aren’t available. Outside those categories, the balance of the state had just 40 casinos earning more than $1 million from gaming and a total net income in 2016 of $17.2 million.
Heather Ashbridge, who started with Nevada State Development Corporation in 2008, previously served in several roles with the organization, including assistant vice president and loan officer. She is based in NSDC’s Reno office.