A new report from the Gaming Control Board shows Nevada’s major hotel-casinos posted their highest net income ever in fiscal 2006 — a combined $2.1 billion, based on overall revenues of $24 billion.
"We have record net income and record revenues," GCB analyst Frank Streshley said about the board’s annual Gaming Abstract. "There was substantial growth in all revenue areas, not just gaming."
Streshley said increased spending by both out-of-state tourists and by locals helped to fuel the record revenues. He added that another construction boom is starting, and that bodes well for the future.
Statewide, slots generated the most revenue, 67.2 percent of the total; table games (including bingo and keno) accounted for 29.3 percent; poker and card games, 1.4 percent; race books, 1 percent; and sports books, 1.1 percent.
In Southern Nevada, which includes the Las Vegas Strip, table games performed better, garnering 31.2 percent of revenue; slots accounted for 65.1 percent; poker and card games, 1.5 percent; race books, 1.1 percent; and sports books, 1.1 percent.
The annual Abstract reports profits after expenses and state taxes, but before federal taxes, for the state’s largest casinos. Unlike monthly revenue reports, the abstract also details where the casinos earned their revenue and spent their money.
In addition to record profits, last year marked the first time Nevada casinos earned more revenue — 51 percent — from non-gambling sources, such as restaurants, hotel rooms, spas and entertainment. (Casinos generated 49 percent of revenue.)
The trend toward non-gambling revenue sources is more advanced in Southern Nevada, where just 47.5 percent of revenues came from gambling. The balance of revenues came from rooms, 21.5 percent, food, 13.7 percent, beverage, 5.3 percent, and other sources (spas, entertainment, etc.), 12.1 percent.
The annual report shows some big expenses last fiscal year — including higher payroll totals for employees, and increases in interest expense and in a catchall "other" category that includes various legal expenses, insurance premiums, garbage bills and other items.
Casino departments at the big resorts reported a total of $1.96 billion in complimentary services to high-rolling gamblers.
The most comps — as a percentage of total revenue — were free drinks, which accounted for 46 percent of all beverages sold. Food freebies were next at 20 percent of total sales, while comped rooms accounted for 16.1 percent of all guest room revenue. Surprisingly, entertainment and other comps accounted for only 4.8 percent of the $2.6 billion in entertainment revenue.
On the expense side of the ledger, executives’ pay decreased 69 percent, to $52.9 million. The decrease was due mainly to big bonuses paid to some Strip executives in the prior year that weren’t repeated in fiscal 2006.
But most expenses increased across the board.
Payroll for administrative, non-departmental employees increased 8.7 percent to nearly $1.2 billion; interest expenses increased 35 percent to $1.6 billion; utility costs increased 5.4 percent to $423.2 million; advertising was up 5.5 percent to $430.8 million; and "other" expenses increased 16.5 percent to $1.6 billion.
The Annual Abstract is based on financial data from 274 hotel-casinos that each grossed more than $1 million during the year and account for virtually all of Nevada’s casino revenues.
In Southern Nevada, a breakdown shows resorts on the Las Vegas Strip had gross revenues of $14.9 billion and a net win of $1.25 billion, while downtown Las Vegas resorts reported total revenue of nearly $1.2 billion and net win of $140.6 million.