Nevada casinos won $11.3 billion in 2016, which marks the second straight year Nevada casino revenues have increased. The uptick in revenues was 1.5% compared to the 2015 winnings.
Despite the boost in revenues, the $11.3 billion is not back to the level it was before the 2008 global recession. 2007 continues to hold the record for Nevada casino revenues with $12.85 billion.
Increases Since 2009
Since 2009, revenues have increased each year except for the 0.43% and 0.10% declines in 2013 and 2014. Revenues topped $10 billion a year in 2004 and have remained above that threshold since then, but they declined to $10.39 billion in 2009, at the height of the global recession.
Mike Lawton, senior analyst for the Nevada Gaming Control Board, said the boosted revenues are a healthy sign for the state’s casino industry. 64% of the increase came from slot machines, which many casinos feared were in decline.
Mr. Lawton said, “This is what we want to see. It’s growing again, and it’s widespread.”
Slot Machine Revenues Were Stronger
Over the past couple of years, slot machine revenues had shown signs of softening. The statistics convinced Nevada casino owners to approach the state’s legislature to make basic changes in the way gaming was conducted in the state. Skill-based slots were legalized, while other millennial-friendly gaming like eSports and virtual sports were included in the package of gambling products.
Baccarat Winnings down 5.3%
Las Vegas Strip casinos have installed more baccarat tables, hoping to attract more Asian gamblers. Direct flights from Beijing to Las Vegas became a reality, while Chinese-friendly casinos like Lucky Dragon were opened.
Despite that attention, baccarat winnings were down 5.3% from 2015. The total yield from baccarat was substantial, as the Nevada casinos collected $1.2 billion from baccarat in 2016. The downturn is concerning, because lose 5.3% over a full year of gambling is unlikely to reflect a pure luck.
While high roller winnings can affect the bottom line in a month or over a quarter, it is less likely to throw off an entire year of gaming revenues. It is more likely that the downturn in baccarat winnings reflect a downturn in visits by Asian gamblers. Some believe China’s economic slowdown and corruption crackdown might be reflected in an overall decline in foreign tourism.
Increases through Population Growth
The relatively slight increase on the Las Vegas Strip likely will leave some gaming analysts concerned. The Vegas Strip collected $6.3 billion in gaming revenues in 2016, which is less than a 1% increase in winnings. One-percent growth is seen by many economists as no growth at all, because such slight boosts are accounted by population growth alone — more adults come into the American economy each year.
Non-gaming revenues continue to drive most of the profits on the Las Vegas Strip, as tourists attend nightclubs, restaurants, Vegas shows, and other attractions.
Off-the-Strip and Reno Revenues
Off-the-Strip casinos and Reno gaming showed healthy results. Off-the-Strip casino gambling totalled $565 million, which was a 4.5% increase. Reno casinos collected $596 million in winnings, which is a 4.2% increase in gaming revenues from 2015.
Nevada’s Carson Valley region was the only area which recorded a decline in gaming revenues. Carson Valley had a loss of less than 1%, which is concerning for operators there.
Positive Overall Gaming Numbers
Despite certain soft numbers, the overall reaction from Nevada casino analysts has been positive. It is thought higher wages, more employment, and other economic factors point towards a strong year in 2017.
Economists have been optimistic about economic rejuvenation in the United States in the short term. Increases in infrastructure spending, tax cuts for corporations, and the resulting lower employment rate could mean higher revenues for the casino industry. Las Vegas Strip revenue increases might exceed 1%.
Speaking for Nevada’s gaming regulators, Mike Lawton said, “We are pretty optimistic.“