Nearby communities
Henderson, Nevada, incorporated
North Las Vegas, Nevada, incorporated
Paradise, Nevada, unincorporated
Enterprise, unincorporated
Sunrise Manor, Nevada, unincorporated
Spring Valley, Nevada, unincorporated
Boulder City, Nevada, incorporated
Culture
Downtown From the Stratosphere
Currently downtown Las Vegas is the only place in Las Vegas where the casinos are clustered around an outdoor pedestrian zone, providing an experience similar to a state fair with gambling. Harrah's entertainment has announced plans to build a similar venue with a giant ferris wheel around Flamingo, Harrah's and Imperial Palace. But right now the Strip is mostly oriented at giant indoor casinos.
While the gaming revenue of downtown Las Vegas has remained relatively stagnant over the last two decades, the Las Vegas Strip has boomed. In fiscal year 1988 that ratio of revenue for the Strip compared to downtown was less than 3:1. In FY2008 the ratio is over 10:1. However, downtown rode the massive increase in tourist spending from 2004 through 2007 that swelled the non-gaming revenue of the area. Non gaming revenue and income hit an all time high in FY2006.
The population of the city of Las Vegas has increased from 249,000 in 1990 to about 600,000 in 2010. In the interim only three major casinos have been constructed inside the city limits (Stratosphere, Suncoast and Rampart Casino). So the downtown casino district with over 1100 employees has remained important to the city. Since the majority of the casinos remain outside the city limit many people have been promoting the idea of a Consolidated city–county government as a more equitable way to share revenue.
Casinos in City of Las Vegas
This table includes all the casinos inside the city limits. The table, game, and slot count is valid on 31 December 2008. The category of over $1 million and under $12 million are re-evaluated every fiscal year. FSE means Fremont Street Experience. Games refers to table games. License numbers are issued by city of Las Vegas.
License Name Category Owner FSE Keno Bingo Sports Poker Games Slots
City of Las Vegas Downtown Casinos (as of 31 July 2009)
G08-00014 Golden Nugget >$72m Landry's Restaurants Yes Yes Yes 13 71 1358
G08-00032 Stratosphere Las Vegas >$12m ACEP Yes 8 56 1300
G08-00003 California >$12m Boyd Gaming Yes Yes 32 1100
G08-00023 Main Street Station >$12m Boyd Gaming 19 881
G08-00010 Fremont >$12m Boyd Gaming Yes Yes Yes 31 1092
G08-00009 Four Queens >$12m TLC Yes Yes Yes 31 1026
G08-00075 Binion's >$12m TLC Yes Yes 50 52 800
G08-00051 Fitzgeralds >$12m BDI Yes Yes 6 31 980
G08-00006 El Cortez >$12m Gaughan Yes Yes 3 21 1025
G08-00078 Plaza >$12m Tamares Yes Yes 3 23 800
G08-00060 Las Vegas Club >$12m Tamares Yes 15 700
Monthly executive summary
Downtown Gaming Revenue Change Since Beginning of Recession
Calendar Year and Fiscal Year: Red is negative
CY2006 FY07 Jul 5.3% Aug 14.3% Sep 8.4% Oct 1.7% Nov 1.7% Dec 1.8%
CY2007 FY07 Jan 5.8% Feb 6.2% Mar 7.0% Apr 8.0% May 0.3% Jun 1.9%
CY2007 FY08 Jul 9.6% Aug 5.1% Sep 12.5% Oct 0.7% Nov 9.3% Dec 0.8%
CY2008 FY08 Jan 6.7% Feb 0.3% Mar 2.5% Apr 6.6% May 17.2% Jun 10.2%
CY2008 FY09 Jul 16.2% Aug 9.4% Sep 8.1% Oct 19.6% Nov 1.6% Dec 17.4%
CY2009 FY09 Jan 22.7% Feb 11.3% Mar 2.7% Apr 14.0% May 10.7% Jun 5.6%
CY2009 FY10 Jul 11.5% Aug 3.9% Sep 8.7% Oct 16.4% Nov 1.3% Dec 12.3%
CY2010 FY10 Jan 2.1% Feb 5.8% Mar 10.5% Apr 9.1% May 0.7% Jun 11.7%
CY2010 FY11 Jul 19.2% Aug 1.1% Sep 3.9% Oct 10.3% Nov 8.3% Dec 4.4%
CY2011 FY11 Jan 8.3% Feb 6.2% Mar 0.3% Apr 5.7% May 7.9% Jun 4.0%
CY2011 FY12 Jul 10.2% Aug Sep Oct Nov Dec
In Nevada a monthly report of gaming revenue is released about five weeks after the end of the month. These statistics are posted in several locations on the Internet. The Las Vegas Convention and Visitors Authority (LVCVA) posts an executive summary for forty one categories. The number that gets the most attention is the percentage change of gaming revenue from the same month the previous year.
Historical data is released in various formats. The LVCVA maintains year to date and year end tables with on their site back to calendar year 2002. Data presented in graphic form covering several years is easier to visualize.
Nevada Gaming Control Board publications
The NGCB maintains a list of publications. Cumulative data is reported in fiscal years (FY) (1 July to 30 June) instead of calendar years.
Downtown Las Vegas currently has 16 nonrestricted gaming locations that earn more than $1 million per year in gaming revenue. Since fiscal year 1990 when the Mirage opened on the Las Vegas Strip gaming revenue downtown has been flat. Non-gaming revenue has increased, but income also remains relatively flat. Some of the smaller casinos have since closed, and one major casinos hotel, (The Stratosphere) has opened. On average, the casinos that have less than $12 million per year in gaming revenue have a negative income.
Based on numbers of hotel rooms, slot machines, and table games the three largest operations are (not in order of revenue) the Golden Nugget, the Stratosphere Las Vegas and Boyd Gaming downtown division which consists of the Main Street Casino, the California Casino, and the Fremont Casino.
In 1990 one of the 11 casinos in the over $12 million category was the Golden Gate Hotel and Casino, but revenue is now under $12 million. The Stratosphere Casino has taken its place.
The Lady Luck casino and hotel has been closed since Feb of 2006, but was formerly making over $12 million a year in gaming revenue.
Of the 5 current licenseholders in the under $12 million category, 3 of them currently offer slot machines only (no table games, poker, racing or sports), and only 2 of them have small attached hotels (100 rooms apiece).
The Downtown Las Vegas Nonrestricted locations have 9,636 rooms.
The number of gaming devices in comparison with other areas.
Locations with over $1M per year gaming
Area
December 2008 Locations Slot Machines Table Games Card Games Calendar Year 2008
Gaming ($m)
Downtown 16 12,034 395 50 $578
Strip Area 41 50,158 2,737 403 $6,126
Clark County 151 125,892 4,403 722 $9,768
Statewide 261 171,693 5,605 913 $11,543
9-11 crash and recovery
For Downtown Las Vegas the total revenue dropped after 9-11 as it did in most resort areas including the Strip. Total revenue includes all sources of revenue for the property (food, drinks, attractions, etc.). Unlike the strip, income remained slightly positive, but revenue did not recover for three years. Profitability was restored during this period solely through cost cutting measures. An analysis of the data could reveal how much of the cost cutting was payroll, cost of goods (food and beverage), and number of employees.
Beginning with December 2001, all of the properties changed ownership, at least once, with the exception of the 3 properties in the Boyd Gaming downtown division. Most ownership changes are accompanied by attempts to upgrade the properties with new restaurants, clubs, renovations, and games.
Post 9-11 Revenue and Income for Downtown Las Vegas
(gaming over $1m per year)
FY Fiscal Year Income % Total Revenue $m Gaming Revenue $m
01 Jul 2000-Jun 2001 1.89% $1,102.63 $671.9
02 Jul 2001-Jun 2002 0.05% $1,085.73 $661.4
03 Jul 2002-Jun 2003 2.20% $1,085.72 $655.2
04 Jul 2003-Jun 2004 3.88% $1,085.73 $653.4
05 Jul 2004-Jun 2005 4.42% $1,112.60 $658.6
Margin for Casinos in Downtown Las Vegas vs Strip. In fiscal year 2006, downtown hit a record high surpassing the Strip.
Tom Breitling and Tim Poster were the highest profile successful entrepreneurs who profited in the downtown market during the last crisis. As recounted in Tom Breitling's book, Double or Nothing, the partners agreed to buy the Golden Nugget and had an agreement to sell the property after operating it for only one year.[10] The partners made $113 million in profit called the highest rate of return in such a short time in the gaming industry.
By FY2006 total revenue for downtown exceeded that of FY2004 by $106 million. Margins (income over revenue), income, and revenue all reach record highs for downtown. Margins even surpass the Strip according to NGCB Data. Although the sale of the Golden Nugget is completed after six months needed to earn gaming license, no casino purchases are negotiated this fiscal year. Heartened by the improving economic conditions, the Lady Luck is closed for complete renovations.
On February 21, 2008 corporate raider Carl Icahn sold his four Southern Nevada casinos, comprising American Casino & Entertainment Properties anchored by the Stratosphere Las Vegas and realized a gain of $1 billion after a decade of investing in the market. The price for the properties was agreed on the previous April, and was based on an appraised value of $718.443 million for the land. Although revenue drop has been comparatively benign in the recession, the interest on the long term notes for this land speculation has made the company unprofitable.
Revenue since 1 July 2006
Data through 31 Jan 2010
Fiscal year 2006 (1 July 2005 through 30 June 2006) set all time records for downtown Las Vegas in terms of total revenue gaming and non-gaming. Revenue in FY2007 and FY2008 dropped. But like the rest of Nevada FY2009 was the most severe fiscal year since downtown gaming peaked in the early 1990s.
Boyd Gaming reported their year end revenue on February 26, 2009.[13] The downtown properties are one of the relatively brightest properties in their portfolio. The total revenue for the calendar year 2009 was $229 million vs $240 million for the year 2008 and $255 million for 2007. Collectively the Boyd Downtown Division is the currently the largest operation inside the downtown region.
Landry's Restaurants, the owner of the Golden Nugget is listed as one of 15 companies that may not survive the calendar year. Total revenue for CY2008 for Golden Nugget group is $253 million. Moody's downgraded the Golden Nugget debt covering $545 million worth of upgrades and the addition of a yet-to-open hotel tower, incurred since Landry's took over in 2005. This is due to the company's persistently weak operating performance and increasing debt levels, which have resulted in deterioration in liquidity and debt protection measures. The severe downturn in the Las Vegas market continues to negatively impact the company's earnings, margins, and cash flow. At the same time, the company is funding a major expansion at its Las Vegas property with additional debt. As a result, we believe that Golden Nugget's capital structure is unsustainable at its current level of operating performance, stated Bill Fahy, Senior Analyst.
In an article in the Las Vegas Review Journal analyst Frank Martin said the downtown market as a whole made about $30 million in profit in the last fiscal year. Martin predicted a $70 million drop in gambling revenue, but the drop was $72.7 milion (1 July '08 - 30 June '09). "If room rates drop $5, you are at the point where sales just cover expenses and comps," Martin said. "At this point the rooms department is no longer a profit center, but just a promotion for the casino."
Future prospects
The FY2006 gaming abstract showed that the casino-hotels became extremely profitable when the average room rate for downtown went from $50 to $70 a night. It takes a lot less revenue to make a downtown casino profitable compared to one on the Strip. The average room rate for the Strip hasn't been $70 since 1995. The Lou Ruvo Brain Institute is currently finished construction. The Smith Center for the Performing Arts will be completed in the year 2012. Certainly, the Golden Nugget is gambling on hundreds of millions of dollars in improvements to the property.
At the abandoned site of the former Holy Cow! casino and brewery which closed on May 2002(across the street from the Stratosphere and The Sahara Casinos a developer received preliminary approval to build a 98-foot (30 m)-tall video screen and a new casino. Aspen Highlands Holdings hope that the eye-catching attraction at the entrance to the city of Las Vegas will attract gamblers to the casino without an attached hotel.
Profitability had the potential to increase after March 28, 2010 when the ACE bus rapid transit project comes on line. The ACE rapid transit system will have the appearance and feel of a light rail transit network. Traffic lights will be controlled by a system similar to the one that emergency vehicles use. This modern transit system made travel from Fremont Street to the Convention Center virtually the same as the Las Vegas Monorail transit time from in front of the MGM-Grand, making thousands of low cost rooms within easy reach of the convention center. Unfortunately the first four months have shown no increase, and a new low of $32,134,417 was reached for July, 2010.
However, this current crisis is so severe, the revenue decreases are greater than all recent cost cutting or payroll reduction efforts. Some downtown casinos may come on the market in the near future, as an investor will be eager to try and repeat the success of Breitling, Poster and Icahn. In an article by journalist Ben Spillman, he describes a report that looks at historical costs and provides accurate estimates of revenues of the individual downtown casinos.
All about Las Vegas:
Las Vegas
History of Las Vegas
Climate of Las Vegas
Demographics of Las Vegas
Economy of Las Vegas
Tourism of Las Vegas
Downtown Las Vegas
Culture of Las Vegas
Sports in the Las Vegas
Government of Las Vegas
Education in Las Vegas
Transportation in Las Vegas
McCarran International Airport
No comments:
Post a Comment