Las Vegas has been the poster child for the recession’s toll on the gaming and tourism industry. No place has been hit harder than Sin City, and Las Vegas has the double-digit foreclosure rate and 20 percent unemployment to show it.
As the new year begins, however, there are signs of recovery, as recent gaming revenue numbers and a report from PricewaterhouseCoopers LLP show.
Throughout Nevada, gaming revenues increased 11 percent during October, marking Nevada’s third straight monthly increase.
On the Las Vegas Strip, gaming revenues rose 16 percent, the sixth time in the last 10 months that casinos along Las Vegas Boulevard increased revenues compared with 2009.
For the first 10 months of 2009, gaming revenues are up 1 percent statewide while Strip gaming revenues are up 5.4 percent.
The Gaming Control Board reported casinos statewide collected gaming revenues of almost $888.6 million, which compared with almost $800.4 million collected in October 2009. Strip casinos collected $494.8 million from gamblers during October, compared with almost $426.3 million in the same month a year ago.
Analysts remain cautiously optimistic.
“We get the sense the path to a broader Las Vegas recovery is well under way,” one analyst Steven Wieczynski of Stifel Nicolaus Capital Markets gaming analyst told investors in early December. “While we're encouraged by today's results, it remains too early to tell how long it will take for conditions to return to pre-recession levels.”
PricewaterhouseCoopers LLP released a report in December also pointed to signs of hope for Nevada’s gaming industry.
“Las Vegas is currently hunkered down for a relatively gradual recovery, since experience shows that an upturn in vacations to casino gaming centers tends to lag about 12-18 months behind a rebound in the economy,” the national accounting firm said in its “Playing to win” gaming industry outlook report.
It also noted that as the global economy recovers, and international visitors return alongside domestic visitors, “Nevada continues to be better placed to capitalize on the upturn than Atlantic City, since Nevada is less affected by competition from regional casinos.
“This means Nevada should be able to absorb the new capacity and start to rebound, once the economies and disposable income improves,” it continued.
PriceWaterhouseCoopers noted that the Nevada market is expected to grow at a 4.1 percent compound annual rate, from $10.2 billion in 2009 to $12.5 billion in 2014.
All of this bodes well for gaming manufacturers already encouraged by greater numbers of attendees as November’s Global Gaming Expo. While the game replacement cycle continues to lag, representatives told me they have seen positive signs that the industry will pick up in 2011.
Here’s hoping they’re right. That would be a happy new year indeed!