A Recession? Not for the Casinos in Nevada

The rest of the nation may be sunk in a recession, but Nevada casinos, bolstered by the opening of several big gambling venues last year, are riding high and may even be drawing more business during the recent hard times.

Gambling revenue for 1990 as well as the fourth quarter ended on Dec. 31 rose in virtually every area of the state, except snow-deprived Tahoe, whose fortunes ride on attracting business from the area’s ski resorts, officials said.

Nevada’s 339 casinos and 1,857 sites with slot machines produced a 14.1% increase in revenue to $5.2 billion in 1990 and 15.2% to $1.3 billion for the quarter, according to Nevada’s Gaming Control Board.

“Overall we were very pleased with the percentage increases. It was a prosperous year for the industry,” said William A. Bible, chairman of the Gaming Control Board. “They did better than our expectations.”

Although Gulf War jitters dampened business somewhat during January, “Nevada seems to be a little bit more resilient than other regions of the country,” said Thomas F. Cargill, an economics professor at the University of Nevada-Reno. “When the economy does have an effect, it shows up as slower growth rather than actual declines in revenue.”

Last year’s record growth was fueled by the openings of the Mirage Hotel/Casino and the casino at the Excalibur Hotel in Las Vegas as well as the Flamingo Hilton Hotel/Casino in Laughlin, experts say.

Some experts even speculate that Nevada, bolstered by high-visibility events such as Monday’s heavyweight boxing bout between Mike Tyson and Donovan Ruddock in Las Vegas, may be siphoning some high rollers away from Atlantic City, N.J.

But William Fellows, an analyst with the San Francisco investment house Montgomery Securities, said the increase in Nevada gambling “came at the expense of some smaller places that aren’t quite as attractive as the new hotel casinos.”

For calendar year 1990, revenues rose a huge 17.5% in Clark County, home to 175 casinos including those in Las Vegas and Laughlin. Revenues in Washoe County, which has 66 casinos including those in Reno and Tahoe, rose 7.5%. Elko County had a 5.1% increase in 1990, while revenue in the remaining areas of Nevada increased less than 5%.

Most experts don’t expect Nevada casinos to sustain their recent growth surge.

Cargill forecasts a 10.3% revenue increase this year and 9.3% in 1991 as the red hot Nevada economy cools somewhat. What’s more, a study by Cargill and University of Nevada-Reno Prof. Kambiz Raffie last year found that gambling volume has also been affected by the California Lottery. Gambling revenue has averaged 3.7% less each quarter following the launch of the lottery in 1985.

The pair speculate that Californians may not come to Nevada as often because they can play the lottery in-state, and the professors believe that Nevadans are also traveling to California to buy lottery tickets.

Nevada’s Gaming Take Taxable Gross Revenue 1. Clark County: Las Vegas, Laughlin 1990: $3.87 billion 1989: $3.30 billion 2. Douglas County: Minden, Incline Village, Lake Tahoe 1990: 350.5 million 1989: 343.7 million 3. Elko County: Elko 1990: 111.6 million 1989: 106.1 million 4. Carson County: Carson City 1990: 40.0 million 1989: 38.6 million 5. Washoe County: Reno 1990: 810.0 million 1989: 753.9 million Other 1990: 54.6 million 1989: 52.3 million Statewide Totals 1990: 5.2 billion 1989: 4.59 billion Gambling Revenue Taxable gaming revenue in Nevada, in billions of dollars 1990: $5.24 billion Source: Nevada Gaming Commission