In Nevada, casinos brought in a record $29.86 billion during the fiscal year 2023. However, the amount of net revenue decreased due to rising interest rates, inflation, and administrative expenses.
The 2023 Gaming Abstract for the 12-month period ending June 30, 2023, was released by the Nevada Gaming Control Board (NGCB) on Friday.
On their gaming floors, 300 casinos made at least $1 million in revenue throughout the fiscal year. A financial study of the state's nonrestricted gaming licenses is provided annually, however only casinos with gross gaming revenue (GGR) of $1 million or more are included.
Gaming winnings, hotel room sales, food and beverage sales, entertainment, spa services, and other resort attractions make up the almost $30 billion in revenue. Roughly $37% of the total revenue, or $10.92 billion, came from gaming.
With sales of $29.86 billion, which is 8.9% more than the 2022 fiscal year, the 300 casinos declared $3.44 billion in net income. Higher borrowing rates, labor expenses, and the cost of materials and commodities were the reasons given for the more than 21% reduction in net income.
The amount of money that casinos keep after expenses are met but before federal income taxes and special costs are subtracted is referred to as net income.
2023 Remains Firm
2023 was the second-best fiscal year for Nevada casinos, following a stellar 2022.
The county with the highest revenue, Clark County, which is home to Las Vegas, brought in $26.86 billion, up 9.5% over the previous year. While net income for Southern Nevada casinos decreased by 21% to $3 billion, it was still the second-best year for the region.
Twenty.48 billion of the total revenue and $1.37 billion of the net profitability came from strip casinos. Casinos in the downtown area recorded $1.55 billion in revenue and $259.17 million in net income. Downtown resorts reported a 4% decline in net income, while Strip casinos suffered a nearly 34% decline.
The state report shows a decrease in net income for each metered area compared to the fiscal year 2022. All markets, with the exception of Lake Tahoe's South Shore, nevertheless reported positive net income.
Notwithstanding rises in interest expenses of 23% to about $449 million, rent increases of 70% to $248 million, and general expenses of 17% to $613 million, the net income was positive.
2024 Outlook
Revenue growth is imperative for Nevada casino executives, who do not see a reduction in costs anytime soon. Bill Hornbuckle, the president and CEO of MGM Resorts International, is among the many who anticipate that happening.
"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.
New labor agreements were reached between the Culinary Union, which represents resort employees along the Strip, and a number of casino companies, including MGM, Caesars Entertainment, and Wynn Resorts, last autumn. The new, five-year union contracts are increasing wages for almost 50,000 workers at Las Vegas casinos.
For Nevada casinos, the first half of 2023 was a record year, with GGR reaching a new peak of $15.5 billion. Union officials were successful in their drive to convince members that they should receive a larger financial share in the form of higher wages and better benefits.