Las Vegas Strip Casinos Report Net Loss of $1.95 Billion in Fiscal 2021
Posted: January 14, 2022, 7:23 a.m.
Last update on: January 14, 2022, 11:37 a.m.
Casinos on the Las Vegas Strip have been battered by COVID-19. Figures released this week by the State Gaming Control Board (NGCB) reveal just how severe the impact of the pandemic has been.
While statewide gross gaming revenue increased 25% from fiscal 2020, Nevada casinos suffered a net operating loss of $206.4 million during the year. fiscal year 2021. The data period represents the 12 months ending June 30, 2021.
The NGCB’s annual Gaming Abstract reports on the operating performance of casinos that brought in at least $1 million in gaming revenue during the year in question. The state says 302 casinos did so and were included in the 2021 Nevada Gaming Abstract.
Total revenue — money spent by customers on games, rooms, food and drink, and entertainment — was more than $16.12 billion. However, FY21 revenue was down 12% from the prior year.
Gaming was the bright spot, with casino revenue hitting $8.45 billion. But revenues from other resort areas continued to be deeply affected by the coronavirus. The lack of conventions for much of the year resulted in slow non-gaming operations.
As expected, gambling winnings increased in all regions of the state, and this was the result of limited entertainment options and (consumer) stimulus,” said Michael Lawton, senior economic analyst at NGCB.
“Pandemic-related restrictions, which limited restaurants, bars, entertainment offerings including showrooms, concerts, special events and nightclubs, all played a significant role in the declines. recorded non-gaming revenue,” Lawton added. “Additionally, the lack of international travellers, convention attendees and the slow rise in leisure travel contributed to these results.”
Band responsible for the decline
As Las Vegas goes, so does Nevada’s gambling industry. And in fiscal 2021, the Strip’s struggles pushed the statewide gaming and hospitality sector into the red.
The statewide net income loss of $206.4 million was entirely due to the Las Vegas Strip, which suffered a net loss of more than $1.95 billion. Clark County made up for some of the massive losses by Downtown Las Vegas, Laughlin and the Boulder Strip, with all three areas posting net revenue gains. Clark County as a whole recorded a net income loss of $742.5 million.
Strip struggles were tied to high operating costs and expenses at casinos, while COVID-19 led state officials to ban or limit many forms of entertainment and hospitality. Ongoing pandemic-related mandates, such as indoor face masks and limited international travel, added to the woes.
The Strip is the only metered market that suffered a loss of net income during the year.
“As expected, due to the Las Vegas Strip‘s reliance on multiple market segments, including international travelers, convention attendees and long-haul domestic customers, the Strip has lagged in the pace and timing of its recovery from other parts of the state,” Lawton said.
Tape sharing remains removed
Gross gaming revenue on the Las Vegas Strip totaled $3.6 billion in FY21, a 5.7% year-over-year premium. But Lawton says revenue from casinos on the Strip, which made up 42.4% of the state’s total, is lower than generally expected.
The gambling analyst says the Strip accounted for nearly 54% of Nevada’s total statewide gambling revenue in the 10 years before the pandemic.