The biggest sector that creates jobs in the state of Nevada is the gambling industry. For the fiscal year 2018, the gambling scene contributed to around 38.9% of the total tax revenue of Nevada. Meanwhile, the same industry managed to secure 450,100 working positions during the same year. Even though other sectors try to diversify the economy of the state, as of now, the gambling industry remains the driving force for the economic development of Nevada.
In the years that followed the Great Recession, the gaming and tourism industries in Nevada have been steadily developing. There is a slight difference, however, in the size of the two sectors, with non-gaming facilities outnumbering the gambling amenities.
For the fiscal year that ended on November 30, 2019, the gaming revenue for the state of Nevada amounted to $11.9 billion. About $10.3 billion, which equals 86%, came from Clark County, with the Las Vegas Strip being the main contributor. With the introduction of the integrated resort model, gaming properties offer luxurious hotels and restaurants in addition to the casino venues. This attracts even more tourists in the gambling area of the state and helps grow both the gaming and non-gaming sectors of Nevada.
When you take a look at the Las Vegas Strip, you will notice that most casino resorts are owned by giant companies like MGM and Caesars. Meanwhile, another popular gambling area in Nevada is Reno, where most of the businesses are family-owned. Some resorts in the Reno region can be easily compared to some of the most luxurious Vegas Strip casinos and hotels, making Reno one of the popular gambling hubs in Nevada. Stateline is a city near Reno and it is also a popular destination for casino tourists. Since it is located on the southern part of Lake Tahoe, it combines the comfort of staying at luxury resorts with the opportunity to see a famous tourist attraction.
Unfortunately, the global COVID-19 pandemic had a devastating impact on businesses all over the world. The gambling industry is no exception, with Nevada taking a huge hit due to many casinos being forced to shut down earlier this year. While many casinos started to return to business in June, they had to meet certain conditions, with working at 50% capacity being one of them. This is why even major Las Vegas casinos continue to report huge losses this year, compared to the results from the previous fiscal year.
The Fiscal Performance of Nevada’s Gambling Sector in 2019
When compared to the numbers from 2019, we can see that the gaming industry in Nevada suffered a huge decline in revenue this year. This was a result of the COVID-19 pandemic causing many casinos and resorts in the state to shut down and resume their activities at half of their capacity during the following months.
We can take a look at the September Monthly Revenue Report for 2019, published by the Nevada Gaming Control Board. It provides information published by nonrestricted gaming licensees and covers the data in a one-month, three-month, and twelve-month format.
On a statewide level, all nonrestricted locations in Nevada have reported total wins on table, counter and card games of over $369 million for the month of September. This represents a 4.25% growth compared to the results of the previous year. Meanwhile, slot machines have accumulated revenue of more than $690 million during September, which is estimated to be an increase of 8.26% compared to the previous year. The total gaming revenue for all nonrestricted locations amounts to over $1 billion, accounting for an 8.26% year-over-year growth.
For the three months between 1st of July and 30th of September, 2019, the win amount of the reporting licensees is over $1 billion for table, counter and card games and more than $2 billion for slots. The total amount for the three-month period exceeds $3 billion, which is estimated to be about a 4.68% growth.
When we take a look at the estimates for the past 12 months, we see that the winnings accumulated from table, counter and card games were over $4 billion, while slots contributed with a win amount of more than $7 billion. The combined gaming wins of Nevada nonrestricted locations for 12 months amount to over $12 billion, which equals a 2.53% year-over-year increase.
| Statewide – All Nonrestricted Locations | |||
|---|---|---|---|
| Date | September 2019 | 1st July – 30th September 2019 | 1st September, 2018 – 30th September 2019 |
| – | Winnings*/Chg | Winnings*/Chg | Winnings*/Chg |
| Table, Counter, Card Games | 369,062/4.25% | 1,034,037/5.79% | 4,160,857/0.62% |
| Slots | 690,229/8.26% | 2,001,455/4.12% | 7,882,556/3.57% |
| Total Gaming | 1,059,291/6.83% | 3,035,491/4.68% | 12,043,413/2.53% |
* Wins are represented in thousands (‘000)
The locations in Nevada that have reported a 4.50% growth, with wins on table, counter, and card games surpassing $364 million for the month of September 2019. Meanwhile, slot wins for the same month amounted to over $687 million, showing an 8.26% growth. The total gaming wins for September 2019 amounting to over $1 billion, indicating a 6.93% increase compared to the results from the previous year.
For the three-month mark between 1st of July and 30th September, 2019, the table, counter, and card games have accumulated wins of over $1 billion, while slot wins reached almost $2 billion. The total gaming wins for the three months is estimated to be over $3 billion, resulting in a 4.69% growth.
Lastly, the numbers for the twelve months that include the data from 1st of September, 2018 to 30th September, 2019 show table, counter, and card games wins of over $4 billion. The slot wins were almost $8 billion, with the total gaming wins reaching almost $12 billion, showing a 2.59% year-over-year growth.
| Statewide – Locations with a revenue range of $1,000,000 and over | |||
|---|---|---|---|
| Date | September 2019 | 1st July – 30th September 2019 | 1st September, 2018 – 30th September 2019 |
| – | Winnings*/Chg | Winnings*/Chg | Winnings*/Chg |
| Table, Counter, Card Games | 364,008/4.50% | 1,025,608/5.84% | 4,134,469/0.74% |
| Slots | 687,787/8.26% | 1,994,066/4.11% | 7,853,855/3.58% |
| Total Gaming | 1,051,795/6.93% | 3,019,674/4.69 | 11,988,323/2.59% |
* Wins are represented in thousands (‘000)
All nonrestricted locations in the Downtown Las Vegas area of Clark County have reported a win amount of over $20 million on table, counter and card games for the month of September 2019. This indicates a 5.90% growth compared to the numbers from the preceding year. The wins on slots during the same month reached over $45 million, indicating a 27.50% year-over-year growth. The total gaming wins for September 2019 amounted to more than $65 million, marking a 19.89% increase when compared to the same period in 2018.
The three-month results that include data from 1st of July to 30th of September show table, counter, and card games wins of over $50 million. Meanwhile, the slot wins amounted to more than $113 million. The total amount of gaming wins for this period reached more than $163 million, showing a 9.15% year-over-year growth.
The twelve-month results until September 2019 show table, counter, and card games wins of over $211 million, while slots accumulated wins of more than $468 million. The total amount of the yearly gaming wins for the nonrestricted locations in Downtown Las Vegas has surpassed $679 million, showing a 6.84% growth to the results of the preceding year.
| All Nonrestricted Locations in Downtown Las Vegas – Clark County | |||
|---|---|---|---|
| Date | September 2019 | 1st July – 30th September 2019 | 1st September, 2018 – 30th September 2019 |
| – | Winnings*/Chg | Winnings*/Chg | Winnings*/Chg |
| Table, Counter, Card Games | 20,512/5.90% | 50.591/12.82% | 211,672/7.41% |
| Slots | 45,417/27.50% | 113,171/7.59% | 468,005/6.59% |
| Total Gaming | 65,928/19.89% | 163,762/9.15% | 679,677/6.84% |
*Wins are represented in thousands (‘000)
All nonrestricted locations in the Las Vegas Strip area of Clark County have reported monthly table, counter, and card games wins of over $277 million for September 2019. Meanwhile, the slot wins for this period were over $306 million. The total gaming wins for the same period were estimated to be more than $584 million, which represents a 7% year-over-year growth.
The period between July and September of 2019 shows table, counter, and card games wins of over $785 million. The winnings on slots were more than $861 million, with the total gaming amount reaching over $1 billion. This represents about a 5.76% growth for 2019.
The twelve-month estimates show that wins on table, counter, and card games have reached more than $3 billion, with slot wins also surpassing that amount. The total gaming wins for the 1-year period until September 2019 reached more than $6 billion, showing a 2.35% year-over-year growth.
| All Nonrestricted Locations in the Las Vegas Strip Area – Clark County | |||
|---|---|---|---|
| Date | September 2019 | 1st July – 30th September, 2019 | 1st September, 2018 – 30th September, 2019 |
| – | Winnings*/Chg | Winnings*/Chg | Winnings*/Chg |
| Table, Counter, Card Games | 227,295/ 6.41% | 785,278/6.28% | 3,220,951/(0.02)% |
| Games | |||
| Slots | 306,955/7.54% | 861,433/5329% | 3,411,561/4.69% |
| Total | 584,249/7% | 1,646,711/5.76% | 6,632,512/2.35% |
*Wins are represented in thousands (‘000)
All nonrestricted locations in the Laughlin area of Clark County have reported monthly wins on table, counter, and card games of over $4 million, which is a 3.12% decline compared to the results from September 2018. Wins from slots have surpassed $35 million during September 2019, indicating a 5.68% year-over-year growth. The total gamin wins for the same period was over $39 million, showing a 4,56% growth.
For the three months between July 1st and September 30th, the table, counter, and card wins for locations in Laughlin were over $13 million, while slot wins surpassed $108 million. The total gaming wins were more than $122 million, marking a 4.01% growth when compared to the data from 2018.
The twelve-month data shows a 2.52% growth in the total gaming revenue (more than $515 million), with table, counter, and card games wins exceeding $54 million, while slot wins were over $461 million.
| All Nonrestricted Location in Laughlin Area – Clark County | |||
|---|---|---|---|
| Date | September 2019 | 1st July – 30th September, 2019 | 1st September, 2018 – 30th September, 2019 |
| – | Winnings*/Chg | Winnings*/Chg | Winnings*/Chg |
| Table, Counter, Card Games | 4,703/(3.12%) | 13,739/0.59% | 54,196/1.47% |
| Slots | 35,175/5.68% | 108,698/4.46% | 461,211/2.65% |
| Total | 39,879/4.56% | 122,436/4.01% | 515,407/2.52% |
*Wins are represented in thousands (‘000)
All nonrestricted locations in the Reno area of Washoe County reported monthly wins on table, counter, and card games of over $12 million for September 2019, which represented a 12.54% decline. The slot wins during the same period were over $42 million, resulting in a 1.53% drop. The total gaming wins suffered a 4.24% year-over-year decrease, with winnings amounted to over $55 million.
The three-month mark showed table, counter, and card games wins of over $35 million (5.62% drop). The slot wins were estimated at more than $141 million, indicating a 2.48% increase. The total gaming wins for this period were over $177 million, showing a 0.73% growth from the previous year.
The twelve-month data expressed a 3.66% decline in table, counter, and card games wins, which were estimated to be over $127 million. For the same period, the slot wins were around $500 million (0.35% drop), with total gaming wins reaching about $627 million, indicating a 1.04% decline.
| All Nonrestricted Locations in the Reno Area – Washoe County | |||
|---|---|---|---|
| Date | September 2019 | 1st July – 30th September, 2019 | 1st September, 2018 – 30th September, 2019 |
| – | Winnings*/Chg | Winnings*/Chg | Winnings*/Chg |
| Table, Counter, Card Games | 12,460/(12.54%) | 35,834/(5.62%) | 127,176/3.66% |
| Slots | 42,880/(1.53%) | 141,439/2.48% | 500,724/(0.35%) |
| Total | 55,340/(4.24%) | 177,273/0.73% | 627,900/(1.04%) |
*Wins are represented in thousands (‘000)
The taxable revenue for the state of Nevada for the year that ended in September 2019 was estimated to be over $11.5 billion, showing a 2.30% year-over-year growth. The biggest contributors were the Las Vegas Downtown and Las Vegas Strip areas in Clark County.
By the end of December 2019, the yearly taxable revenue report of Nevada recorded a 3.21% increase, surpassing $11.6 billion. Again, the Las Vegas Downtown and Las Vegas Strip areas had the biggest contribution to the gaming revenue growth.
Nevada’s Results Compared to Other US States
In 2019, the total gross gaming revenue of all casinos based in the US reached about $43.61 billion. Unsurprisingly, the state of Nevada had the biggest contribution, followed by New Jersey, Pennsylvania, and New York. The gross gaming revenue of Nevada for 2019 was estimated at around $12 billion, while New Jersey took second place with a revenue of about $3.4 billion. The state of Pennsylvania reported a gross gaming revenue for 2019 of around $3.3 billion, while New York’s gaming revenue for the same year was about $2.7 billion.
Despite the December declines in Washoe Country, all of the areas located in Clark County helped the state of Nevada to rank first and contributed to the overall gaming revenue of the US. The sportsbooks located in Nevada also reported a record-high revenue of $329.1 million for 2019.
New Jersey is in second place in contribution to the gross gaming revenue of the country for 2019. For the year ended in December 2019, the Atlantic City Casino Industry reported net revenue of $3.16 billion which showed a 9.5% growth compared to $2,88 billion in 2018. The highest contributor to the revenue was Borgata.
Pennsylvania’s gambling revenue set a record high in 2019, with the revenue across all 12 state casinos rose 4.5% to $146 million. The slot market was the biggest contributor, with a revenue of nearly $2.4 billion. Meanwhile, the table games revenue reached more than $900 million.
Although New York still ranks among the biggest contributors to the gross gaming revenue of the US, it marked its lowest monthly revenue in December 2019. Ever since gambling activities have been legalized in the state earlier in 2019, this was the biggest drop in revenue for the gaming industry in the state.
Since Nevada used to have a monopoly on legal casinos in the US for a substantial period of time, that helped the state to reinforce its reputation of the mecca of gambling. Areas like the Las Vegas Strip, Downtown Las Vegas, and Reno have gained popularity as top destinations for casino tourists, which is why Nevada was still in the leading position for gross gaming revenue in the US for 2019.
America’s Gambling Hub Shuts Down
Despite the positive results in the gambling industry in Nevada by the end of 2019, the pandemic that took over the world in 2020 had a devastating impact on casinos, just like on many other businesses.
In mid-March, as the covid cases in the US reached a peak, the Governor of Nevada, Steve Sisolak, ordered the shutdown of all casino and gambling facilities in the state. The original ban would have the facilities stop operation for 30 days, helping to flatten the curve. This was a very tough decision as the gaming industry is the main force that powers the economy of the state of Nevada.
Nonessential businesses in Nevada like restaurants and bars were also ordered to close doors in late March. The reason for closing down businesses was the increased number of positive tests in Clark County. The Governor’s decision put on hold the gambling business, which was estimated to contribute about $6.6 billion to the revenue of the state.
Despite the original order was planning to have nonessential businesses to close down only for a month, the actual lockdown period continued a lot longer, putting on pause the casino industry for more than 10 weeks. Restaurants were still allowed to offer food for takeout or make deliveries, with most restaurants in the state being allowed to resume their normal service at the beginning of May. Bars were allowed to reopen in late May but those that did not offer food were forced to close down again in July.
Sisolak also allowed casinos in the state of Nevada to reopen on June 4 but only if they follow strict safety protocols. Some of the new rules for the operation of Nevada casinos include working at half of the capacity of the venues, sanitizing all areas, and wearing masks while being inside the gambling facilities.
As the pandemic is still ongoing in many parts in the world and cases of coronavirus in the US continue to rapidly increase, Gov. Solas is considering closing down gambling facilities yet again. Many experts are worried that this will further worsen the condition of the casino industry that suffered huge losses during the previous months. Although the government is looking for alternative solutions, there is no guarantee that casinos in Nevada will not shut down for a second time this year.
Revenues Continue to Plunge After Reopening
Compared to other casino locations, the Las Vegas area enjoyed a decent recovery after the lockdown period during the spring. Unfortunately, as some casinos have changed their operating hours and are even closing during weekdays, it may take even longer for the Las Vegas gambling industry to fully recover.
Las Vegas Sands and MGM Resorts have decided to have Park MGM closed every week between Monday at noon and Thursday at noon. The main reason for this decision is the low rate of casino visitors, postponing the recovery of this business even further into the future.
For the month of April 2020, the nonrestricted gaming licensees in Nevada reported a total gaming win amount of $3.6 million. This marked a devastating 99.61% year-over-year decline, when compared to the gaming win of $936 million for April 2019. For the fiscal year between July 1, 2019 and April 30, 2020, the gaming win of the state of Nevada suffered an 11.43% drop.
The percentage fees that were collected by the state of Nevada during May 2020 amounted to $19,107. Those fees are based on the casino’s profits generated during the previous month. This number marks a 99.96% decline when compared to the reports of the previous year for the month of May.
The state’s nonrestricted locations reported a total gaming win for May 2020 of $5,8 million. This represented a 99.41% decline compared to the gaming win of $981 million for May 2019. For the fiscal year that ended May 31, 2020, the gaming win dropped 19.38%. The percentage fee collected for June 2020 was estimated to be $56,003, marking a 99.91% year-over-year decline.
After the Governor of Nevada allowed state casinos to reopen at the beginning of June, this led to a small recovery but the total gaming win amount for June 2020 still marked a 45.55% decline to $566 million. The gaming win for the fiscal year ended June 30, 2020, marked a 21.67% decline. The percentage fees collected in July 2020 amounted to $344,027, marking a 99.39% year-over-year drop.
Even though casinos in Nevada continued to operate under the new restrictions imposed by the state government, there was still an improvement in the gaming revenue. For the month of July 2020, nonrestricted gaming operators reported a total gaming win of $756 million. This still marked, however, a 26.16% decline compared to results from the previous year. The percentage fees that were collected during August 2020 were $32 million, which was a 56.33% decline compared to the percentage fees for August 2019.
For the month of Augusts 2020, the nonrestricted gaming locations in Nevada further managed to improve their total gaming wins to $743 million. Despite that, since not all casinos in Las Vegas and other state areas have reopened, this number still represents a 22.08% year-over-year drop. For the fiscal year that ended August 31, 2020, the gaming win amount declined 24.20%. The percentage fees that were collected during September 2020 were $78 million, showing a 56.38% increase compared to September 2019.
As big Las Vegas casinos continued reopening, the results for September were even better, with nonrestricted gaming locations reporting total gaming wins of $67.7 million. Of course, the gaming industry in Nevada has a long way to go until it recovers, which is why these numbers still represent a 22.38% year-over-year decrease. The gaming wins for the fiscal year that ended September 30, 2020, dropped 23.56%. The percentage fees that the state of Nevada collected during October 2020 amounted to $67.7 million, representing a 2.17% increase compared to October 2019.
Who Took the Biggest Hit?
The impact of the COVID-19 was and continues to be devastating for numerous businesses. The gambling industry in Nevada is no exception, with resorts and casinos enduring major losses in 2020.
One of the companies that were heavily affected by the lockdown period and the decreased number of tourists is MGM Resorts. Despite the lifting of the lockdown ban, casinos located on the Las Vegas Strip endured major losses, with MGM Resorts reporting operating losses of $495 million for the third quarter of the fiscal year.
The company with 10 resorts located in the Las Vegas Strip area reported third-quarter net revenue of $1.1 billion. This number represented a 66% year-over-year decrease. As casino facilities were allowed to reopen on June 4, 2020, MGM Resorts had all of its Vegas Strip casinos gradually resume work. The 10 different locations managed to earn $481 million in net revenue, which represents a 68% decline compared to last year. Despite that, these results show a slow recovery from the losses from the second quarter, as the complete shutdown caused MGM Resorts an operating loss of $1 billion.
Las Vegas Sands Corp. also reported huge third-quarter losses of $565 million. The company stated a revenue of $586 million, which did not meet experts’ expectations for $633.4 million. During the second quarter, the casino operator also reported a loss of $1 billion, which results in a 97.1% year-over-year decrease.
Another major casino company that also reported huge third-quarter losses is Caesars Entertainment. While the net profit of the casino giant amounted to $37 million for the third quarter of 2019, this year, the reports show a net loss of $926 million. While Las Vegas casinos are slowing gearing up after several months of lockdown, they still suffered huge losses during the COVID-19 pandemic.
Wynn Resorts will also have a difficult time reaching its pre-pandemic revenue records. The huge company also suffered huge losses, with the report for the third quarter showing a 53.3% decline in revenue this year. The operating revenue amounted to $186.7 million, which is a huge drop from the revenue of $399.5 for 2019.
The Prospects for the Nevada Gaming Industry
The driving force for Nevada’s economy is tourism, which is another sector that has been seriously affected by the coronavirus. As state casinos were forced to close down for a few months to slow down the spread of the virus, Las Vegas and other major gambling hubs in Nevada endured big losses.
Even though casinos in Nevada were allowed to reopen at the beginning of June, they had to operate at a lower capacity, complying to the strict new rules of the casino reopening protocols. Due to the ongoing pandemic and record-high numbers of COVID-19 cases in the US, casino hubs like the Las Vegas Strip, Reno, and Laughlin do not enjoy that many visitors as the months before the pandemic.
With restaurants and bars also having to close or operating under certain restrictions, the gaming industry of Nevada will have a difficult time to recover. As the consumer income dropped on a nationwide level due to the numerous job losses during the pandemic, many doubt that the tourism-driven business of Nevada will be able to recover any time soon. As of now, rating agencies like Moody and Fitch Ratings respectively give the state of Nevada a rating of Aa1 and AA+. This means that the rating for the state’s recovery has changed from Stable to Negative.
One factor that can improve the state’s rating is the diversification of Nevada’s economy. Instead of relying heavily on the gaming industry, if the state manages to further develop other businesses, it is possible that its post-pandemic recovery may come sooner. Unfortunately, as the cases of COVID19 continue to grow both in Nevada and in the US, there is a definite uncertainty about the upcoming months and the revenue of the state of Nevada.
| Gross Gaming Revenue of US Casinos for 2019 (by state)** | |
|---|---|
| Nevada | 12 031.5 |
| New Jersey | 3 468.63 |
| Pennsylvania | 3 384.39 |
| New York | 2 730.98 |
| Louisiana | 2 459.82 |
| Indiana | 2 247.04 |
| Mississippi | 2 201.33 |
| Ohio | 1 941.49 |
| Maryland | 1 757.06 |
| Missouri | 1 729.49 |
| Iowa | 1 486.79 |
| Michigan | 1 454.27 |
| Maine | 1 451.89 |
| Illinois | 1 354.4 |
| Colorado | 833.67 |
| Massachusetts | 718.53 |
| Rhode Island | 668.43 |
| West Virginia | 630.04 |
| Florida | 574.65 |
| Delaware | 450.81 |
| Arkansas | 426.49 |
| Kansas | 416.17 |
| New Mexico | 244.08 |
| Oklahoma | 140.85 |
| South Dakota | 110.28 |
| Total | 43 606.41 |
**Revenue in the table is expressed in million US dollars
| Nevada’s Gaming Revenue During the Pandemic | ||
|---|---|---|
| Months | Amount | Chg |
| April 2020 Total Gaming Win May 2020 Percentage Fees | $3,646, 658 $19,107 | (99.61%) (99.96%) |
| May Total Gaming Win June 2020 Percentage Fees | $5,808,507 $56,003 | (99.41%) (99.91%) |
| June 2020 Total Gaming Win July 2020 Percentage Fees | $566,806,791 $344,027 | (45.55%) (99.39%) |
| July 2020 Total Gaming Win August 2020 Percentage Fees | $756,793,269 $32,282,165 | (26.16%) (56.33%) |
| August 2020 Total Gaming Win September 2020 Percentage Fees | $743,038,562 $78,294,941 | (22.08%) 56.38% |
| August 2020 Total Gaming Win September 2020 Percentage Fees | $743,038,562 $78,294,941 | (22.08%) 56.38% |
| September 2020 Total Gaming Win October 2020 Percentage Fees | $821,132,375 $67,793,039 | (22.38%) 2.17% |
