2008 NATIONAL COMMERCIAL CASINO AND RACINO GAMING REVENUE ANALYSIS

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The croupier holds a roulette ball in a casino in his hand. Gambling in a casino.

adjustment period

Oh! That gigantic hissing is a gaming balloon that has grown and slowly lost air over the years. However, not all vessels are lowering tides, as some emerging and expanding gaming jurisdictions showed strong growth in 2008.

Overall, the commercial and racetrack casino sector (excluding Indian games) saw a 3.5% decline in gaming revenue in 2008, generating a total of $36.2 billion, a decrease of approximately $800 million from 2007. It was the Racino sector that mitigated this decline. In 2008, it posted a profit of nearly $1 billion, and the commercial sector market was down $1.8 billion, or 6.7%. Nevada suffered the biggest losses in 2008, dropping nearly $1.3 billion, more than half of which came from the Las Vegas Strip sector.

hunkering down

For the most part, 바카라사이트 operators have been in a relatively flat state due to a decline in sales in 2008. It wasn’t until Q3 and Q4 that it actually plummeted. Market growth across the country and the availability of sufficient credit and equity funds, new construction and expansion have surged in recent years. Faced with the reality of declining or, at best, stagnant demand today, many of these projects are now considered over-borrowed and/or oversized. As a result, many gaming companies are attempting to reduce operating costs while renegotiating debt that has become more difficult due to low valuations. The latter has become a highly problematic conundrum when dealing with competition, especially in jurisdictions that are competing for market share with emerging casino projects in the neighbourhood. This is a topic we discuss in more detail in the Weekly Analysis section of this publication.

As a result of this situation, the gaming industry environment is now full of imminent deaths. Companies with more notable issues include Station Casino, Empire Resorts, Harrah’s Entertainment, Greektown Holdings, Legends Gaming, Tropicana Entertainment, Herbst Gaming. The list grows every week.

“How long will this economic situation last and are we still at the bottom?” It’s a question that no one seems to be answering yet. But what is clear is that most gaming jurisdictions will have to learn to deal with the smaller pies.

memo:

This analysis includes only gaming revenue from pari-mutuel outlets offering licensed casinos and casino games, not Indian gaming operations, card rooms or small non-casino type slot locations. The full article, including the revenue statement, is available on our web page.

I/O model

A major aspect that appears to have arisen from the ashes of this current trend is that many casino projects are too large to support on their own. In terms of investment dollars, inputs were not proportional to outputs in terms of net income after debt repayment compared to previously achieved results. More or bigger is not always better. Seeing an increase in non-game revenue at Las Vegas Strip resorts has spurred the development of more inclusive amenities in many other jurisdictions. However, the drawback of this strategy is that the costs associated with expanding market penetration and occasional use are much higher than the costs of attracting the primary market.

As the day-tripper market becomes more competitive, casino venues must increasingly rely on in-house hotel customers and scale their assets (and expectations) accordingly. Although Steve Wynn started the major trend of creating a high-end market, the strip didn’t have enough demand to warrant many other similar projects aimed at the same niche.

The trick is to create a happy medium in your project composition. This is of course a less ‘pants-like’ approach and a more studied approach. A shameless plug for development consultants like us.

Other game activities

There are no publicly available detailed data on Native American gaming revenue, but anecdotal evidence suggests that the sector has been hit as hard as the commercial sector. Two Connecticut Indian gaming installations reported 2008 slot revenues of $1.6 billion, which is more than double the 3.5% decline from the previous year, a decrease of approximately 7%, or nearly $114 million. The market is clearly still being shaken by the ripple effects of casino expansion in Rhode Island and slot operations in New York and Pennsylvania.

Arizona Department of Gaming reports that the state’s 23 Indian gaming casinos’ contributions, based on their gaming revenue formulas, declined for each quarter of 2008 compared to the prior year. It decreased by 0.8% in the first quarter, 7.5% in the second quarter, 9.5% in the third quarter, and 16.1% in the fourth quarter.

Some SEC-reported Indian gaming assets report similar declines. Seneca Gaming, which operates three Class III casinos in upstate New York, reports gaming revenues grew nearly 2% in 2008, while declined 8.7% in the third quarter and nearly 10% in the fourth quarter. 2008 quarter compared to 2007. Game revenue trends near Niagara Falls, Ontario declined 1.5% in 2008 compared to 2007.

It was a hybrid of the national lottery. According to the North American Association of State & Provincial Lotteries reports, US lottery revenues totaled $60.6 billion in fiscal 2008, an increase of about 3% from the previous year. However, declines have been reported in some jurisdictions, particularly in California, where it is down by 8%. The data does not appear to reflect the impact of Q3 and/or Q4 results, as some of these states are at various fiscal year-ends.

According to data provided by Equibase, horse parry mutual revenues continue to decline, declining 7% from $14.7 billion in 2007 to $13.7 billion in 2008.

Planned and proposed new extensions

It has been the new gaming jurisdictions that have generated a lot of growth in Racino revenue, and the impact tends to continue for the foreseeable future.

Florida

Miami Dade voters approved a ballot allowing each of the three pari-mutuels to have casino facilities with up to 2,000 slot machines. The Flagler Dog Track and Miami Jai-Alai are expected to open in late 2009 or early 2010, with Calder installed in Miami Gardens yet to announce plans. Numerous other proposals to further expand casino development across the state are being considered.

Illinois

The state finally reissued its tenth license at the end of December 2008. Awarded to Midwest Gaming & Entertainment, LLC for over 1,200 gaming casinos located in Des Plaines, just east of O’Hare. The new facility will not open until 2010. Neither side appears to have any traction at this time, but there has been some discussion about allowing an increase in game locations and racetrack slots per location.

Kansas

The state’s expanded lottery program, which allows the development of slots on four casino gaming zones and existing racetracks and dog tracks, appears to be bogged down as only one facility is currently under construction and the other three offers have been withdrawn. The sole bidder for the Cherokee County contract argued that it could not compete with Oklahoma’s new Quapaw tribal casino. Dodge City’s Boot Hill Casino Resort is scheduled to open in December 2009 with 575 slots and 10 table games, with plans for a second phase to open in 2011 with 875 slots and 20 table games. The state has extended the application process for three other districts through April 2009.

Kentucky

There’s still a lot of ‘fighting’ going on, but the prospects for up to eight slot parlors and Lasino are again a front-burner, but most likely won’t be resolved in the current legislative session.

las vegas

About 14,000 rooms will be available online in 2009, the most recent being the 390 room M Resort in Henderson. Expansion is underway at Caesars Palace and Hard Rock. And the new hotel will include two components of the City Center project and the Fountainebeau.

louisiana

Pinnacle Entertainment’s new casino development project in Baton Rouge and Lake Charles has been delayed but is said to be due to open this year and/or early 2010.

main

A bill that could more than double Penn National’s slot machines to 3,000 and a proposal to remove the restriction that slots are within five miles of the track are under consideration. Failing to convince locals to allow slots, Scarborough Downs may consider moving to a friendlier city.

Maryland

A referendum was approved in November 2008 to allow the development of five casinos with a total of 15,000 slots, and a bidding war is currently underway. Although not as intense as the country expected.

Mississippi

The Grand Soleil Casino Resort in Natchez was due to open in 2008, but faced various financing problems. While the hotel section is open, the riverboat is reported to open in the spring of 2009. Harrah’s Margaritaville Casino in Biloxi is slated to open this year, although somewhat downsized.

new england

Massachusetts, a sleeping giant in terms of market potential, is still moving to open casino/lassino and/or Class III Indian gaming facilities, but is unable to convene political support. seems to be A recent study completed at Dartmouth University estimates that Massachusetts residents spent more than $920 million in Connecticut casinos and slot machine stores in Rhode Island and Maine last year. The New Hampshire Legislature recently rejected the casino development option, but this topic is likely to be revisited, especially if Massachusetts decides to go ahead. There are also attempts in Maine to reconsider options.

new jersey

Atlantic City’s casinos have recently shown their political will to stop adding slot machines to the racetrack by agreeing to continue increasing their wallets with additional taxes. However, the governor has appointed a new panel to study the state’s slack racing program. Ironically, it can only be preserved by allowing slot machines on the track. Especially in Meadowlands. (See section The Nor’easter Squeeze)

New York

When Aqueduct’s 4,500 VLT facility finally looked like it was going to be developed, the winning bidder cited the current lending environment and said it could not pay the $370 million fee needed to put the project back in the governor’s lap. While market demand in the region can be considered fairly strong, the prospect of further competition from nearby Belmont could affect the emphasis on Aqueduct’s economic viability. This is especially true given that less than 30% of net revenue is maintained by operators.

Plans to relocate the Monticello Raceway to the resort complex are being reviewed. Perhaps the NY metro area will likely start working on at least one or perhaps two racinos and is due to the re-emergence of an initiative to develop a Class III Indian gaming facility in the Catskills.

Ohio

Another game proposal is coming up in Ohio after last year’s version was rejected by voters. The plan calls for one casino each in the state’s largest cities: Cleveland, Columbus, Cincinnati, and Toledo. A minimum investment of $250 million is required, an initial license fee of $50 million is required, and a 33% tax on game revenue is required.

Pennsylvania

Sands in Bethlehem is expected to open in the spring of ’09 and the new Rivers project in Pittsburgh is due to be operational in August ’09. Philadelphia’s two slot facilities are still in a political bog, but construction is expected to begin this year.

south dakota

The Lodge at Deadwood is due to open in fall 2009 and features 300 games, 140 rooms and many amenities.

Texas

Lawmakers are proposing a voter vote to amend the state constitution to allow casino gambling in designated areas and to allow gambling on American Indian lands and existing racetracks in Texas.

West Virginia

Greenbriar, who has filed for bankruptcy, is said to have filed a proposal with a new suitor at the Marriott hotel. The state has proposed the concept of allowing resorts to offer casino games, but these efforts are too early to gain traction in any way.

indian game

A recent Supreme Court ruling limiting trusts on land on behalf of federally recognized Native American tribes has further hampered some new Class III game projects across the United States. Moreover, there were 11 Indian casino projects that were rejected by the DOI last year, which the DOI rejected because of new rules that casinos must be close enough to a sanctuary for tribal members to work. There have been suggestions that the new Obama administration could be more hospitable to the development of Indian game projects, but the issue has yet to be resolved.

Meanwhile, there are other Class III projects in various stages of development. The Seneca Casino project in Buffalo, New York is operating a small temporary facility, putting off a permanent facility already under construction until the market rebounds. They also expressed interest in developing a casino in Catskills. State gaming contracts with Florida’s Seminoles are being challenged and could affect plans for larger projects. There are new Indian gaming projects scheduled to take place this year in Michigan and Oklahoma, with the rest in the planning stages. Texas may allow the reopening of Indian gaming facilities and other venues. And Arizona’s Navajo are planning to build additional casinos. California plans to open two or three new Class III casinos in 2009/10.

noryster squeeze

Atlantic City’s total gaming revenue fell 7.6% from $4.9 billion in 2007 to $4.5 billion in 2008. The decline continued through 2009 as the city competed fiercely with the Pennsylvania Stadium. At one time, the only casino in the Northeast was in Atlantic City, which seemed to actually mask the Las Vegas Strip’s annual gaming revenue.

But slowly, however, market share was being eroded by developing a large Class III gaming business first in Connecticut and then another. Slot operations in Rhode Island, the video lottery terminals at New York Racecourse, racinos in West Virginia and Delaware, most recently Pennsylvania.

Now, as they plan to operate slots in Maryland, open a new casino in Bethlehem, Pennsylvania, and eventually launch two operations in Philadelphia, the noose is tightening around Atlantic City’s future prospects. The reliance on day-trippers has been quelled by a false sense of security, and the mission statement must now be redefined as a “destination resort”.

But the only problem with this strategy is that you are not prepared to do it. For all intents and purposes, Atlantic City is either under-spaced or over-played. The day-tripper market isn’t strong enough to explore, and the effective trading area is narrowed as the surrounding population is now moving north and has easier access to New York (Yonkers, soon Aqueduct and perhaps Belmont to expand supply). There is. ), west of Pennsylvania; and south to Delaware, West Virginia and Maryland.

Aside from 카지노 사이트 sea access, the city’s only real competitive advantage is hotel capacity and availability of table games, but the latter will likely end in Pennsylvania and possibly Delaware. To compete adequately as a destination resort, cities will need to develop additional rooms rather than gaming capacity. By comparison, real estate on the Las Vegas Strip is a true gaming venue with not much of a day trip market outside of the ‘local’, with an average of 0.87 gaming locations per room. Atlantic City averages 2.74 positions per room.

It’s no coincidence that Borgata and Harrah’s Marina have been the least affected by the recent recession. Borgata reported a 1.6% decline in gaming revenue, while Harrah’s Marina reported an increase of 4.9% compared to 2007. What’s more, the places hit hardest, AC Hilton, Resorts, and Trump Marina also have the fewest number of rooms. In the meantime, some places, including Trump estates and resorts, are jeopardizing their viability. With the hopes of selling Tropicana, it is getting delayed further and losing its appreciation.

A steady rise in gaming revenue through 2006 saw the city appear as a prime location for further development, which has sparked plans for four new resort projects, each of which has now been postponed indefinitely. The Revel Entertainment Group’s $2.5 billion project is still in place, Pinnacle Entertainment has announced it will seek sale of the destroyed Sands site, MGM Mirage has put its casino plans on hold, and Penn National has stopped tracking the Bader Field airport site. seems to be