Casinos on the Las Vegas Strip collectively lost $1.7 billion during the latest fiscal year, primarily a result of costs associated with Caesars Entertainment’s bankruptcy reorganization.
The Nevada Gaming Control Board (NGCB) released its 2018 “Gaming Abstract” report this week revealing the financial losses. The document is a report combining financial information regarding the state’s gaming licensees that generated gross revenue of at least $1 million during the 12 months that ended June 30, 2018.
Total revenue was $18.3 billion for casinos on the Strip. Gaming accounted for $6.28 billion, or 34.3 percent of the income. It’s the 20th consecutive year where gambling floors generated less than 50 percent of Strip casinos’ overall revenue.
Rooms were responsible for more than $5.1 billion in revenue, food and beverage $4.2 billion, and “other” $2.7 billion. Downtown Las Vegas reported net income of $115.3 million, a 4.5 percent gain on 2017.
Statewide, casinos lost $1.2 billion despite a record $27.1 billion in revenues. There were 289 casinos in Nevada that grossed $1 million or more in gaming during the 12 months.
All Blame Caesars
Caesars Entertainment officially emerged from Chapter 11 bankruptcy protection in October of 2017. Dubbed the “most complex bankruptcy in a generation” by the company’s own lawyers, the costs of restructuring one of the largest casino empires on the planet pushed profits into the red.
The Abstract shows that statewide general and administrative expenses totaled $13.33 billion. That’s a more than 30 percent increase on 2017’s G&A expenses, which totaled $10.22 billion.
There was a large company this fiscal year which experienced a very large amount of reorganization expenses due to their exit from bankruptcy,” NGCB Senior Analyst Michael Lawton told the Las Vegas Review-Journal. “The good news is those are one-time charges, they are not recurring expenses.”
“If things keep going as they are, we shouldn’t see such a substantial net loss recorded next fiscal year,” Lawton concluded.
Caesars Entertainment operates 12 casino properties in Nevada, nine of which are on the Las Vegas Strip.
The 2018 Abstract includes the period of the October 2017 shooting that killed 58 people and left hundreds injured. The NGCB report reveals that visitation declined in the months after the Strip massacre, but quickly rebounded.
In the wake of the horror, the Las Vegas Convention and Visitors Authority pleaded with tourists, “We’ve been there for you during the good times. Thank you for being there for us now.”
The Las Vegas economy, of course, is primarily dependent on tourism.
Hotel occupancy was at more than 94 percent in September. After the shooting, it decreased to 88.1 percent in November, and 80 percent in December. GGR on the Strip suffered as a result. Gaming win declind for four consecutive months following the shooting.
However, visitors returned, and occupancy rates increased back to 87.5 percent in January, 88.6 percent in February, and 95.2 percent in March. Gaming revenue eventually returned, too.