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Casinos Recovering, Experts Say Not For Long

Posted on December 12th, 2010

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Casinos in Nevada are seeing a rise in their winnings. Could this be the early stages of recovery? In October Nevada casinos won $888.6 million. This is about 11 percent higher than what they were able to get a year before. According to the Nevada Gaming Control Board over $60 million in taxes were raised from casino gambling revenues, this is a 22 percent increase. The winnings this October was the third consecutive month that saw an increase in casino earnings. Gaming Control Board analyst Mike Lawton thinks this could be a sign that the industry is moving back up. Another sign is that when computing revenues, even without figures for baccarat, winnings still went up by 8.5 percent. Baccarat is usually one of the high revenue games in casinos.

Gambling statistics wise, players wagered $11.7 billion on both table and slot machines. Table game winnings resulted in 1.3 percent while slot went up by 0.3 percent. Slot is a little low but at least it is going up. Ryan Sheltra, Bonanza General Manager said he was glad that winnings went up but was not totally satisfied by the results. “We’re very pleased with the numbers we’re seeing developing for September, October and November, but we are still down,” he said, and “This is still a tough, fighting it out recession atmosphere.” The high income of casinos could be a sign that people have money to spend again. There were no special occasions that occurred that would drive winnings and gambling high. So there must be a general increase in financial capability on the part of the gamblers.

A problem that casinos executives and owners are anticipating though is still the online poker bill. Even if they have been able to start recovering, somewhat, the bill might just bring their revenues down again. It is not the online poker that they are most worried about but rather the next step. According to John Farahi, CEO of the Atlantis “This issue is when it goes to the next stage, which is full fledge gaming and that will have tremendous impact on our operation.” It is bad enough that it took them so long to recover that now there just might be another problem that will reduce their revenues. This is even graver for smaller casinos as they might lose most of their customers to online gaming. Especially since none of the smaller casinos will benefit from this as the larger casinos are more likely to get the limited licenses. The requirement seems to be $2 billion on gaming revenues to become eligible for these licenses.

Casino managers and executives are also upset about the senator’s sudden change of heart. “Senator Reid got a lot of support from the Las Vegas strip in his current re-election campaign,” said Sheltra. “Just a couple of years ago, he was dead set against online gaming, and now he has flip flopped.” They don’t want the law because of the chance that it might eventually evolve to online gambling. Not only will this take their customers away, it will also make casinos useless. Online gaming sites don’t need a building and they need minimal people. It also doesn’t create jobs, and if its affect on local casinos is big enough more people will lose jobs as well.

Because of the many complaints addressed to him, senator Harry Reid wrote a statement concerning online gaming which reads “The online poker bill I am working on is good for the country and for Nevada. The legislation I am working on would get our collective heads out of the sand and create a strict regulatory environment to protect U.S. consumers, prevent underage gambling and respect the decisions of states that don’t allow gambling. I still have serious concerns about legalizing the broad range of casino-type gambling through the Internet.”In his statement, the senator is trying to make it clear that he is not allowing other forms of gambling other than online poker. He is even strengthening penalties for such. But it cannot be denied that the fears of the casino owners are not unfounded. It is only logical to presume that with the legalization of online poker, general gambling online will not be far behind.