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Nevada Casinos Smash Revenue Records for the FY 2023 With $3.44B Net Income
By Jeff Osienya Feb 18, 2024 IndustryThe gambling sector in the Silver State is experiencing record growth, at least according to the latest report published by the Nevada Gaming Control Board. Here’s a deeper dive into the numbers and what industry analysts say about the stellar showing.Nevada has reported yet another phenomenal net revenue since it began setting all-time-high monthly numbers back in 2021. The 2023 Gaming Abstract released by the Nevada Gaming Control Board (NGCB) on Friday reveals that about 300 top casinos from the Silver State collectively recorded a net income of $3.44 billion. These figures were published for the fiscal year ending June 30, 2023. This financial analysis report included only the casinos that brought in over $1 million in gross gaming revenue (GGR).
Thus, the total amount generated from casinos, hotel room occupancies, food and beverage sales, spa services, and other nongaming entertainment activities was $29.86 billion, 37% of which came from gaming revenue. This is 8.9% higher than the total the state raked in in the 2022 fiscal year, making 2023 the best financial year so far in sales volume. However, the FY 2023 net income is lower than the $4.4 billion generated in the 2022 fiscal year.
2023 Successful Despite 21% Drop in Net Gaming Income
Although the Silver State reported a year-over-year rise in total revenue from the hotels and resorts hosting several casinos, the net income was down over 21.4%. This is reportedly due to inflation, higher borrowing rates, and administrative costs like rent and employee wages.
As expected, Clark County took the lead at $26.86 billion in total revenue, with Vegas Strip casinos accounting for $20.48 billion. The net income for both Strip and Downtown casinos tanked by 34% and 4%, respectively, explaining the overall net performance for the year. Despite the apparent decline in the net annual revenue, 2023 experts still consider it robust as it is the second highest ever recorded in the Silver State’s history.
Giving details on how each county performed, the report noted that 174 casinos in Clark County saw a gaming revenue of at least $1 million over the 2023 FY. This performance, in turn, generated a combined net income of $3.03 million from a gross revenue of $26.86 million.
Meanwhile, in Washoe County, 31 casinos raked in $227.52 million combined net income from $1.7 million in total revenues. As for Elko County, 21 casinos produced a combined net income that was just shy of $100 million. Down in the Carson Valley Area, 15 casinos brought in $29.87 million worth of net income. Finally, South Shore Lake Tahoe in Douglas County was the only region that reported a net loss of -$3.81 million from 5 licensees. The balance of the state had 54 casinos earning $57.77 in combined net income.
B Global gaming analyst Brendan Bussmann pointed out the factors affecting the revenues over the year, saying:
Quote“You have rising costs of some of those things are starting to play out as factors into the overall global scheme of things when it comes to revenue and the tax structure.”
Regardless of the numbers, Bussmann chooses to look on the positive side of things, stating that the generated income benefits the state in the form of tax revenue. He added:
Quote“Because all those things have a direct impact whether it relates to the room tax, the live entertainment tax, sales tax, and all those other things that are contributing factors and shows what a great sector gaming continues to be, not just for Las Vegas... All those factors drive the economy and support our government resources.”
Nongaming Activities Gaining Traction in Nevada
The portfolio of the Nevada gaming scene during the year defines a new outlook on the enjoyment of casino resort amenities. In fact, of the total revenue generated over the period, nongaming revenues were 73.4% of the total, an increase from FY 2022, where 69.6% came from nongaming-related activities.
One of the key drivers behind this remarkable achievement is the renewed interest in travel and entertainment post-pandemic. With COVID-19 restrictions easing worldwide, Nevada’s iconic casinos have witnessed a surge in visitors, both domestic and international. The influx of tourists eager to experience the excitement of the Las Vegas Strip and other gaming destinations across the state has undoubtedly contributed to the overall record-breaking revenue.
NGCB Senior Research Analyst Michael Lawton commented on the array of resort activities in Nevada, stating:
Quote“It shows that Nevada’s gaming industry is extremely diversified with its product offerings, which draw visitors from all over the globe, not to just gamble, but to experience other world-class amenities.”
By the same token, Bussmann observed that:
Quote“Nongaming has continued to be a driver for more than 25 years. With what is evolving on the Strip that continues to be an exceptional and diverse entertainment option, whether it’s show, food and beverage, retail, or hotels, all of that is helping to drive the Vegas economy and attracting more and more people to come to the destination… You see significant input that has finally come to fruition after decades of investment in sports coming off the Super Bowl and Formula One. Those foundations were laid by the rodeo, a college football bowl game, and NASCAR.”
According to the two analysts, nongaming revenue will continue growing, a trend that other gaming markets may emulate.
Great Expectations for 2024
As the fiscal year 2024 draws to a close, industry stakeholders are optimistic about Nevada’s casino sector’s continued growth and resilience. Nevada casinos have expressed optimism for the new fiscal year, observing that given the year so far, the revenue will continue to increase.
MGM Resorts International President Bill Hornbuckle indicated that 2024 may mark yet another high revenue, possibly surpassing previous records. He said in part:
Quote“2023 was an amazing year. We’ve got some headwinds, particularly with labor costs, but there’s enough programming and enough momentum that we think we surpass.”
The Culinary Union, which represents hospitality workers in Las Vegas, has recently reached tentative agreements with several casino resorts and hotels along the Strip. Consequently, this move avoided an imminent workers’ strike that would have affected business in the area.
The first pact to be signed was late last year when the Union struck new wage terms with operators on the Strip, including MGM, Caesars, and Wynn Resorts, covering over 50,000 workers. As a result, wage increments accompanied by lucrative benefits are already being implemented under the new contracts.
Some of the most recent casino resorts/hotels to be brought on board are Binion’s, Golden Nugget, Four Queens, Main Street, Downtown Grand, and Fremont. Other hotel-casinos that have signed contracts with the Culinary Union include Circus Circus, Circa Resort, Sahara Las Vegas, the Strat, and El Cortez. The Union is still negotiating with more resorts, some off the Strip, for more hospitality workers. More casino operators are expected to sign agreements with the Union in the coming weeks and months.
Continued Record-Breaking Success
Nevada’s casinos have not only weathered the storm but have emerged more robust than ever, setting new benchmarks for the gaming industry. As the world gradually recovers from the impact of the pandemic, the success of Nevada’s casinos brings hope for the broader hospitality and entertainment sectors. The industry is undoubtedly the most lucrative nationwide, with most visitors seeking more than just gaming as far as fun activities go. The figures are most likely set to rise or remain high at the end of the current fiscal year.
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