So how does the downturn today compare to 9/11?
On the Las Vegas Strip, gaming revenues were down 16.4 percent in May 2008 and down 5.4 percent for the first five months of 2008.
Clark County as a whole was far worse, including a 29 percent drop in North Las Vegas and a 30 percent drop in the Boulder Strip, which includes some casinos in Henderson.
This issue is causing gaming tax collections to plunge -- down 22.8 percent YoY -- the worst drop in at least 10 years -- exacerbating State budget woes.
"This is an incredibly difficult time for the state of Nevada, and it appears that we may need to prepare for an additional shortfall to our general fund for the fiscal year that just began," Gibbons said in a statement.
BUDGET BREAKER: Gaming tax collections sink
What's really hard to comprehend is: After 9/11, we saw thousands of hotel/casino layoffs -- yet, even though this downturn is much worse, we've seen very few to date. I therefore expect to see massive casino layoffs between now and Christmas 08 -- it's only a matter of time, as these highly leveraged institutions are taking a beating in the equity markets and will soon need to cut costs and improve bottom-lines.
For those of you who haven't already done so, take a look at these posts for more LV Downturn info:
Las Vegas Downturn Gathering Momentum
Economic Troubles Affect the Vegas Strip
Regards
Randy
4 comments:
This has to be the best indicator of how bad our economy is doing. As you already know, casino gaming is normally resilient to tough times. If Vegas is getting roughed up, then you know the s#!t has hit the fan.
24karat
It will be quite obvious in hindsight to see where all of this is leading. Hold onto your seats folks, we've broken the event horizon.
At my morning breakfast at Terrible's Town in Pahrump, I was talking to a man next to me, and his son works in the blackjack pit at Terrible's. He told me that last night his son only had one (1) player all night at the blackjack table. I have been going to breakfast there for years, and this period, they have closed the buffet except for friday night, saturday and sunday.
I expect that eventually they will close the resturant totally within a year as the business is soooo down, and many times I will be the only one eating breakfast (with much attention by the waitress). We were talking and felt that out of the 4 larger casino's in Pahrump that only one may end up with a buffet in a year (Saddlewest). As you say so goes the gaming industry so goes the nation. Yep we are in deep doo doo!
24K,
Agree, the dominoe's are falling.
Jon T, two outlooks:
1) Consumer hyperinflation coupled with asset deflation/high unemployment and deep recession
2) Unprecedented Economic Depression, and possible Total Economic Collapse/Social upheaval/Martial Law
Looks like the powers that be are valiantly working on option 1.
Gary,
Appreciate your view/observations from the inside. Please keep them coming
Randy
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