Nevada casinos post first loss in decades

Nevada casinos posted their first net loss -- $33.5 million -- in at least 19 years in fiscal 2002.

That compares to a net win of $554.4 million in fiscal 2001.

Most of the state -- including the Carson Valley area -- did fairly well, despite the slumping economy and business lost following the Sept. 11, 2001, terrorist attacks. But the 39 major casinos on the Las Vegas Strip reported net losses totaling $245 million for the fiscal year, dragging the industry overall into the red.

Net income is the money retained by casinos after expenses have been paid, but before deducting federal income taxes and extraordinary expenses.

Gaming Control Board Analyst Frank Streshley said total revenue for Nevada's gaming industry fell from $18.1 billion to $17.3 billion -- a decline of $801.6 million from the previous year. Gaming revenue dropped from $9.3 billion to $8.9 billion.

Even so, the 249 casinos which make more than $1 million in annual revenue would have finished with a positive net income, except for asset reductions claimed by Strip casinos.

A provision in the law allows them to "write down" the value of their assets, if they can show their overall value has dropped. The 29 major resorts on the Strip used that provision to deduct $339 million from their net income in fiscal 2002. Had they not done so, the Strip would have reported a net income of about $94 million for fiscal 2002 and the state would have ended the year with a net income of $305 million instead of a loss.

The rest of Clark County helped bail out the Strip, erasing all but $105 million of what the Strip claimed as a loss.

The nine casinos in the Carson Valley area, which includes the valley portions of Douglas County and the capital, reported a total net income of $7.8 million on total revenues of $139.3 million during fiscal 2002. That is 7.5 percent less than the net reported in fiscal 2001, but Streshley said it still represents the highest rate of return of any reporting area in the state: 5.6 percent of total revenue. That compares to a 0.5 percent net return on revenue in Washoe County and a negative 0.2 percent return for the state as a whole this past year. Only Elko and South Lake Tahoe casinos were close in rate of return at 5.5 percent and 4.8 percent, respectively.

South Lake Tahoe casinos were down 40.5 percent for fiscal 2002, but finished still solidly in the black with $25.6 million net income out of $536.9 million.

Net income for Washoe County casinos also dropped dramatically -- by 87.3 percent. Even so, the 38 $1 million-plus casinos there finished the year with a net income totaling $9.35 million.

In the end, the net income reported by state casinos for year was $33.5 million.

While fiscal 2002 was the first net loss reported in decades, figures from the Gaming Control Board show the net has declined since 1998.

From 1993 through 1998, the state's casinos reported net income totaling more than $1 billion. The peak was $1.35 billion in 1996. But the net dropped to $876.6 million in 1999, $496.8 million in 2000 and $554.4 million in 2001.

Associated Press

Here are area-by-area details from the state Gaming Control Board's report on fiscal 2002 gross, statewide EBITDA, and net pretax profits for 249 major Nevada casinos:

-- Statewide -- Grossed $18.3 billion, had EBITDA of $2.9 billion and $33.5 million net loss.

-- Carson-Gardnerville -- Grossed $139.3 million and netted $7.8 million.

-- North Tahoe and other Washoe County clubs -- Grossed $227 million and netted $17.4 million.

-- Stateline -- Grossed $536.9 million and netted $25.6 million.

-- Las Vegas -- Grossed $9.88 billion and had net loss of $245 million.

-- Downtown Las Vegas -- Grossed $1.09 billion and reported net profits of $581,756.

-- Laughlin -- Grossed $844.1 million and netted $25.8 million.

-- Boulder Strip -- Grossed $892.7 million and reported a net income of $40.1 million.

-- Other Clark County clubs -- Grossed $1.59 billion and reported a net profit of $72.9 million.

-- Reno-Sparks -- Grossed $1.62 billion and reported net loss of $8 million.

-- Elko County -- Grossed $324.1 million and netted $17.7 million.