Nevada Casino Industry Net Income Exceeds $2 Billion Despite Lower Revenue

2019 seems to be the year of the turning point for the casino industry, at least for the state of Nevada, as the report released by the regulatory body of the state, the Gaming Control Board, shows a net profit of $2.055 billion, reversing the reported $1.168 billion loss from the previous year.

The Report

The Gaming Abstract is a financial report that takes into consideration all gaming and non-gaming related revenues, aggregated from a pool of 290 casinos that have reached or exceeded $1 million from gaming revenue during the 12 month period preceding June 30 of the current year and it includes all money spent by customers on gaming, rooms, food, beverage, and other attractions, with the net income or loss being the money retained by casinos after expenses but prior to federal income taxes and accounting for extraordinary expenses deductions.

The comprehensive 179-page report takes into account number of employees, room occupancy rates, revenue per available room /RevPar/, and the gaming revenue earned per-square-foot of casino floor space, as well as other measurements.

Lower Revenue

All the casinos in focus account for $24.546 billion in total revenue, more than 10% lower than the $27.107 billion in 2018, something the regulator considers as a result of a change in the way revenues are being recognized by the Financial Accounting Standards Board/FASB/, with the gaming revenue accounting for 35.7% of the total revenue figure, generating $892.3 million in gaming taxes and fees, 10.2% of the gaming revenue.

Southern Nevada

Out of the 290 casinos, 169 are the casinos in southern Nevada’s Clark County, including the Las Vegas casinos, and they have reported a total revenue figure of $21.9 billion, resulting into a net income of $1.88 billion, with the Las Vegas Strip casinos net income of $1.045 billion on total revenue of $16.5 billion, 27% of which is the income from gaming, while Downtown Las Vegas casinos report net income of $179.2 million on total revenues of $1.22 billion, 46.5% of which came from gaming.

Northern Nevada

The northern part of the state, Washoe County including Reno, the 34 casinos included in the report account for $128.3 million in net income generated from a total revenue figure of $1.45 billion, with 42% of the total revenue coming from gaming.

2018 Loss Related to Bankruptcy Reorganization Charges

The general and administrative expenses category of the report, the only reason for the 2018 net loss, represents other general and administrative expenses, including charges for bankruptcy reorganizations, with 2019 having no company expenses accounted in this section of the category, while in 2018 Caesars Entertainment was the only one that had these charges.