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Nevada casinos report $3.4 billion loss in 2010

First the good news. Nevada’s highest-grossing casinos sliced in half their net loss generated during fiscal year 2010.

Now the bad news. The decrease, compared with fiscal year 2009, wasn’t due to a jump in revenues or spending by customers. Casino operators wrote down the value of their assets by about $3.5 billion less than they did in the previous fiscal year.

Nevada’s largest casinos lost $3.4 billion during fiscal year 2010, compared with the previous fiscal year net loss of almost $6.8 billion. The casinos combined for more than $20.8 billion in total revenue, a decline of 5.3 percent compared with more than $22 billion in revenue during fiscal 2009.

On the Strip, the 39 casinos covered in the abstract — one more than a year earlier — lost more than $2.5 billion in fiscal 2010, compared with a net loss of $4.1 billion in fiscal 2009. The Strip casinos reported net revenues of almost $13.3 billion, a decline of 3.8 percent, and almost $5.2 billion in gaming revenues, a drop of 3.1 percent.

Gaming revenue accounted for $9.9 billion, a 5.8 percent decline from fiscal year 2009 and 47.5 percent of the casinos’ overall total revenues.

The Nevada Gaming Control Board released the figures Monday as part of its Gaming Abstract Income Statement for the fiscal year ended June 30.

The abstract is a profitability measurement combining financial information from 256 casinos that grossed more than $1 million in gaming revenues during the fiscal year. The abstract takes into account money spent on hotel rooms, dining and entertainment, as well as gaming.

The number of casinos participating in the survey is notable because the figure is four fewer casinos than the 260 that participated in the fiscal 2009 abstract.

Gaming Control Board senior research analyst Mike Lawton said the second straight fiscal net loss marked the first time since the agency has been recording the abstract that casinos lost money two years in a row. The only other fiscal-year net loss came in 2002, which followed the Sept. 11, 2001, terrorist attacks.

"People are still coming to Nevada because we’ve seen monthly tourism numbers grow," Lawton said. "But the consumer spending levels remain challenged."

Lawton said the overall statewide revenues of $20.8 billion compared with figures generated in 2004 ($19.5 billion) and 2005 ($21.3 billion).

Clark County as a whole had 148 casinos taking part in the abstract, generating a combined net loss of $3.3 billion from total revenue of $18.2 billion. Downtown Las Vegas casinos reported a net loss of $73.7 million, compared with a net loss of $54 million in the prior fiscal year.

The 256 casinos in the abstract paid more than $777.6 million in gaming taxes during fiscal 2010, which equated to 7.8 percent of their gaming revenues. Public companies operated 68 casinos in the abstract, which accounted for 76.2 percent of state’s total gaming revenues in fiscal 2010.

Statewide, revenues from hotel rooms declined 7.7 percent, mainly due to falling average daily room rates. Throughout Nevada, room rates averaged $94.25 during fiscal 2010, down from an average of rate of $102.46 in fiscal 2009.

Strip room rates declined back to levels last seen in fiscal 2004. In fiscal 2010, rooms on the Strip averaged $112.20 a night, down from $124.75 in fiscal 2009.

The largest area in which casinos had a decline was in other general administrative expenses. In fiscal 2009, casino operators wrote down more than $5 billion in assets. That same figure decreased to $1.5 billion in the fiscal year that ended June 30.

Lawton said fiscal 2010 marked the sixth consecutive year that gaming revenues accounted for less than 50 percent of the abstract’s statewide net revenue figure. Fiscal 2010 marked the 12th straight year on the Strip in which gaming revenues accounted for less than 50 percent of the overall net revenue total.

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871.

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