Whether or not 2009 will be just a speed bump or a major pot hole in the road ahead is the big question now in Las Vegas – even in the race and sports books.
The recently released Fitch Ratings predicted a recovery in the gaming industry will be unlikely in the coming year (GT, Dec. 23, Vol. 33, No. 52) and some major projects like Boyd Gaming’s Echelon have been put on hold while some others have been put off altogether.
There are, though, signs of continued growth, with Aliante Station and Encore opening up in 2008 and M Resort and Fontainebleau pushing forward with planned 2009 openings.
But where Sin City’s credo was once "Grow, grow, grow," the more appropriate sentiment in Southern Nevada is more like "Slow, slow, slow" these days. And you know things are tough when the most popular line in town is the one for the $1 hot dogs at The Orleans sports book.
Although race and sports gambling hold comprises an extremely minimal percentage (just 2.0 percent of total casino revenue for the fiscal year ended June 30) of a casino’s revenue stream, the recessionary conditions affect the books too with layoffs, closures, consolidations and lower odds for the bettors all being possibilities to try and cut costs from their side of the counter.
They say gambling is recession-proof, but that’s been proved wrong as 2008’s numbers and the somewhat empty casino floors reveal. But sports gamblers are a different breed and the books’ minuscule 1.85 hold percentage in October in football reveals that when times get tough, apparently pigskin prognostication becomes even more precise for the player.
Jay Kornegay, the main man over at the Las Vegas Hilton’s SuperBook – still the sports book of all sports books – gives major respect to his customers in terms of improving their game.
"Most of our players are pretty educated players," Kornegay said. "They’ve been around the block a couple of times. And [we’re] facing a general public that’s more educated than ever in the gambling world."
Kornegay knows 2009 will be a challenge but has seen the public continue to flock to the betting windows in his place.
"In the sports world, business is still good," he said. "America loves betting on sports and they will continue to do so through hard times."
But he also knows it’s a good idea to try and stay ahead of the curve in this new economic reality.
"We’re not going to rest on our laurels and we’re looking to be creative," Kornegay said of his sports books’ approach to 2009. "We are watching expenses and we’re going to have to do some looking forward."
And Kornegay says he and his team do indeed discuss the economy and the future in these troubled economic times.
"There are ongoing meetings and it’s anybody’s guess what to expect in 2009," he said. "You have estimations of anywhere from it’s going to be rebound in the first quarter to it’s not going to rebound until 2010. I think 2009 is going to be the biggest challenge we have faced since I’ve been in the business."