On Thursday, the Nevada Gaming Control Board (NGCB) published its annual economic report of the state’s entertainment and hospitality industry for the 2021 financial year ending June 30th, 2021. The comprehensive 184-page report dubbed; ‘Nevada Gaming Abstract’ indicates just how much the coronavirus pandemic continued to affect the gaming mecca nearly two years after the first case was reported.
The Gaming Abstract captures a general decline in the number of staffers at some of Nevada’s most prominent casinos due to the COVID-19 pandemic. Further, over the 12 months that came after the 2020 statewide casino shutdown, the revenue generated was anemic, a far cry from the numbers recorded for the preceding financial year.
According to the NGCB report, a total of 302 licensed casinos in Nevada recorded over $1 million in gross gambling revenue during FY2021. Together, all these casinos ended up posting $206.4 million in net loss from $16.1 billion worth of income.
This FY2021 performance is a shadow of the $2.9 billion net income generated from a total revenue of $18.3 billion from the casinos over the 2020 financial year. Net income or loss represents the money retained or lost by the licensed casinos after paying up expenses but before accounting for extraordinary expenses and federal income tax deductions.
Nevada’s Economic Lifeblood Loses Employment Opportunities
As for the employment rate, the volume of staffers in Nevada dipped by 18%, from about 136,000 to around 11,500, over the course of the fiscal 2021 reporting period.
All casino facilities and a range of other businesses termed as ‘non-essential’ were forced to cease operations under Gov Steve Sisolak’s sweeping shutdown mandate from mid-March to early June 2020. However, after the Silver State started handling the coronavirus situation, the closed businesses started reopening gradually, first at limited capacities, before resuming normal operations.
Michael Lawton, the senior economic analyst of the NGCB who produced the Nevada Gaming Abstract, explained the performance saying in part:
“Pandemic related restrictions severely impacted revenues across all departments with the exception of the casino department. The Strip lagged behind the other submarkets across the state due to reliance on multiple market segments, including international travelers, convention attendees, and (domestic airline) customers.”
Virtually all casinos and businesses in the region have reopened and are operating at 100% capacity. Following the impact of the pandemic, gambling sprang back to life faster than other linked entertainment and hospitality services such as nightclubs, live entertainment, and conventions. As a result, of the 24,529 employment opportunities lost during the 2021 fiscal year, 20,578 were from the Silver State’s non-gaming segments.
As he continued to discuss the numbers from the report, Lawton added that:
“As expected, gaming win increased across all areas of the state, and this was the result of limited entertainment options and stimulus (for consumers). Additionally, a lack of international travelers, convention attendees and the sluggish ramp-up for leisure travel contributed to these results.”
Overall, the gaming revenue generated for the 2021 fiscal year sits at $8.4 billion, which is 52.4% of the $16.1 billion posted by all the 302 casinos. Gaming revenue comprises the amount of money spent by customers on gaming, food and beverage, rooms, and a range of other attractions in the casino venues.
The NGCB report also indicated that 9.5% of the gaming revenue or $802.3 million was paid to the state in gaming taxes and fees. In the previous fiscal year, $694 million, or 10.3% of gambling revenue from 267 licensed casinos, went to state coffers.
Non-Gaming Revenue Slide Pulls Down Nevada’s Overall Performance
Looking at the report from a county-by-county perspective, Clark County led the pack, with a total of 173 licensed casinos that saw revenue worth at least $1 million or more during the financial year. The county produced $13.6 billion in revenue and generated $742.5 million in a combined net loss.
With 36 licensed casinos grossing above $1 million, Washoe County’s GGR came in second after reporting a $1.3 billion in total revenue and $275 worth of net income. On the other hand, Elko Country produced a combined net income of $132.2 million from 18 licensed casino facilities. Meanwhile, the Carson Valley Area and South Shore Lake Tahoe in Douglas County posted a net income of $37.4 million from 15 casinos and $24.4 million from 7 licensees, respectively.
It’s worth mentioning that for the last ten years, the Las Vegas Strip has been generating an average of 54% of Nevada’s statewide gambling revenue in each consecutive financial year. However, for the just concluded 2021 fiscal year, the Strip’s contribution slid to 42.4%.
A lack of entertainment and hospitality amenities throughout the pandemic led to significant losses for casinos across the Silver State, even though gaming revenue jumped by about 25% in the 2021 financial year. The NGCB Abstract reported that the total revenue input from non-gambling segments such as food, beverage, and rooms dropped to 47.6% of statewide revenue. A year ago, the non-gambling segments accounted for 63.2% of Nevada’s entire revenue, a difference that resulted in a $3.9 billion dip of non-gaming income in the fiscal reporting period for 2021.