Nongaming spending on the Strip drove resort revenue in Nevada to record levels in 2017, according to numbers released today by the Nevada Gaming Control Board.
Each January, the board release its Nevada Gaming Abstract, a review of the previous year’s financial results from resorts grossing $1 million or more in gaming revenue.
“After recording seven consecutive net loses, the state has recorded two consecutive years of income,” said Michael Lawton, senior research analyst with the Tax and License Division of the board.
“The results were driven by the Strip,” Lawton said. “The state’s net income increased by $578.4 million and the Strip’s net income increased by $534.6 million of that total, or 92.4 percent. And the total revenue for Nevada was up $939.8 million, and the Strip contributed $660 million or 70.2 percent of that increase.”
Overall revenue — gaming, rooms, food, beverage, attractions — throughout Nevada increased 3.7 percent in 2017 compared to fiscal 2016.
But net revenue, the cash casinos kept after paying regular expenses — not federal taxes or extraordinary expenses — grew by 59.1 percent.
Nevada has put the recession behind it largely thanks to nongaming spending on rooms, food and drinks, and other attractions, Lawton said.
“Gaming did not have a bad year. In fact, it had a good year and a nice increase, but definitely not record levels like nongaming spending,” Lawton said.
“Gaming revenue was $11.1 billion, a 3.3 percent increase or $349.2 million difference compared to 2016,” Lawton said. “But gaming revenue accounted for 42.4 percent of that, down from last year’s 42.6 percent. On the other hand, rooms, food and beverage accounted for 57.6 percent of revenue, the highest combined share recorded in the abstract’s history, up from last year’s number of 57.4 percent.”
Expenses at Strip resorts also decreased, also helping the numbers, Lawton said. “Decreases over last several years have gotten us to where we have record net income,” he said.
Specifically, interest expenses for Strip resorts have dropped significantly in the last several years. In fiscal 2012, interest expenses for Strip resorts rose to more than $2.5 billion. In 2017, they were less than $1.5 billion.
Another nongaming source of income is beginning to play an interesting role for gaming company finances, too, according to spreadsheets from the board. “Look for other income to grow, as several Strip properties are now charging for parking,” read a note on the spreadsheet entitled “LV Strip Other Revenue.”
Downtown Las Vegas also did well, Lawton said.
“The abstract paints a good picture for that area,” he said. “We had a new property (the Lucky Dragon, which has now suspended gaming operations), yes. But that’s not the only driver. Downtown Las Vegas did $1.2 billion in total revenue, an all-time record for them as well.”
Other facts from the 2017 abstract:
• Nevada’s 272 casinos grossing $1 million or more in gaming revenue earned $1,557,358,386 in net revenue from total revenues of $26,174,699,272.
• They paid $852,200,434 in gaming taxes and fees to the state, or 7.7 percent of their revenue from gaming.
• Clark County’s 161 casinos (also grossing $1 million or more in gaming revenue) generated combined net income of $1,326,821,660 from total revenues of $23,472,870,573.
• Washoe County’s 32 casinos reported net income of $126,416,011 from total revenues of $1,549,332,369.
• Elko County had 19 casinos with $49,151,104 in combined net income.
• South Shore Lake Tahoe in Douglas County had 5 licensees reporting net income of $27,238,718.
• Carson Valley Area’s 15 casinos generated net income of $11,420,606.
• The rest of Nevada’s 40 casinos earned $16,310,287 in combined net income.