Las Vegas Casinos Look Forward to New YearOverall Revenue Declines During Difficult 2008 |
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Needless to say, it hasn’t been a great year for the Las Vegas economy. Of course, it hasn’t been a great financial year for many, but Sin City has been hit particularly hard.
With unemployment on the rise and discretionary spending in decline, there are fewer people trekking out to the desert to get their “gamble” on. The numbers released by the Gaming Control Board of Nevada show that casino revenue has decreased every single month of this year when compared to last year. Overall, casino revenue is down 8.3 percent in the state in 2008.
But it’d be premature to panic, according to the director of UNLV’s Center for Gaming Research (CGR), David G. Schwartz.
“It’s a business like any other business. The economy runs in cycles; obviously there will be ups and downs,” said Schwartz. “Sometimes, people make a little too much about [the negative statistics].”
The CGR offers academic analysis on gambling and gaming-related issues.
Schwartz says that while casinos shouldn’t ignore the fact that their revenue is declining, it would be risky to start cutting costs that would affect their customer base.
“The temptation for the operators is going to be to cut costs, and I don’t think in the long run that is going to be helpful, because if you do that, you’ll end up alienating a lot of your customers,” said Schwartz.
The CGR director pointed out that this is particularly relevant for poker players. He said that if casinos start downsizing their poker rooms and offering fewer games, since poker rooms generally don’t make the casino all that much revenue, anyway, they run the risk of agitating their poker-playing customers and perhaps losing them indefinitely.
“It’s not like when they economy picks back up, they are going to take out an ad and say, ‘We hired people back and we’re not bare-bones anymore,’” said Schwartz. “Casinos need to be wary of where they cut their costs…if they’re doing stuff that impacts the customer, that’s not the best idea, and I wouldn’t do it lightly.”
Schwartz said an ideal option would be to refinance their debt.
While it is true that poker rooms are not exactly the breadwinners for casinos — other table games and slots rake in much more money — they are the one department that has been stable in the economic recession.
Most cardrooms in Las Vegas report that their poker revenue is comparable to last year, with a number of casinos even saying that their poker revenue is up compared to 2007. The Venetian, Harrah’s, and the Flamingo all reported a more successful year than last year.
A number of new poker rooms have debuted in 2008, including a room at the new Aliante casino in North Las Vegas and three updated rooms at Planet Hollywood, Hard Rock, and Binion’s.
This year also marked the introduction of automated tables in Las Vegas, as Excalibur brought in PokerPro tables, which cut down on costs and provided a quicker and more efficient game to patrons.
Schwartz says that he believes that the fundamentals of the industry are strong, and that it’s just a matter of time until the downward trend reverses. For Las Vegas casinos, they’re gambling — or at least hoping — that that time will come sooner rather than later.
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