Posted on: February 17, 2024, 11:34h.
Last updated on: February 17, 2024, 11:34h.
Nevada casinos generated record revenue of $29.86 billion during the state’s 2023 fiscal year, but net income slid because of billowing inflation, interest, and overall administrative costs.
The Nevada Gaming Control Board (NGCB) on Friday unveiled the 2023 Gaming Abstract for the 12 months ending June 30, 2023.
During the fiscal year, 300 casinos grossed at least $1 million on their gaming floors. Only casinos that generated over $1 million in gross gaming revenue (GGR) are included in the annual report that provides a financial analysis of the state’s nonrestricted gaming licenses.
The nearly $30 billion in revenue includes gaming win and sales from hotel rooms, food and beverage, entertainment, spa services, and other resort attractions. Gaming represented about 37% of the revenue, or $10.92 billion.
On the $29.86 billion in sales — 8.9% higher than the 2022 fiscal year — the 300 casinos reported net income of $3.44 billion. Net income dropped over 21%, with higher borrowing rates, labor, and materials and goods costs blamed for the decline.
Net income refers to the amount of revenue retained by the casinos after expenses have been paid but before federal income taxes are deducted and extraordinary expenses are covered.
2023 Still Solid
Nevada casinos experienced their second-best financial year in 2023, as 2022 was a banner performance.
Clark County, home to Las Vegas, accounted for the most revenue at $26.86 billion, which was a 9.5% year-over-year increase. Net income for Southern Nevada casinos was $3 billion, a 21% drop but the market’s second-best year.
Strip casinos generated $20.48 billion of the revenue and $1.37 billion of the net income. Downtown casinos reported revenue of $1.55 billion and net income of $259.17 million. While Strip casinos saw net income slide almost 34%, downtown resorts said net income fell 4%.
Every metered area in the state report incurred a net income decline from the 2022 fiscal year. But each market still reported positive net income aside from Lake Tahoe’s South Shore.
The positive net income came despite interest expenses surging 23% to nearly $449 million, rent increases of 70%, or $248 million, and general expenses climbing 17% to $613 million.
2024 Outlook
Nevada casino execs aren’t expecting costs to subside anytime soon, so revenue must continue to increase. Many expect that to happen, including MGM Resorts International President and CEO Bill Hornbuckle.
2023 was an amazing year. We’ve got some headwinds, particularly with labor costs, but there’s enough programming and enough momentum that we think we surpass,” Hornbuckle said on the company’s earnings call last week.
Last fall, the Culinary Union that represents resort workers up and down the Strip struck new labor terms with several casino operators, including MGM, Caesars Entertainment, and Wynn Resorts. Some 50,000 Las Vegas casino employees are receiving wage increases as a result of the new five-year union contracts.
The 12 months in 2023 were a record year for Nevada casinos, as GGR climbed to a new high of $15.5 billion. Union leaders successfully campaigned that their members deserved a bigger piece of the financial pie by way of increased pay and more robust benefits.
