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Nevada land casinos report record $2.1 billion profit for 2006. $1.96 billion in complimentary services to high-rolling gamblers.
Associated Press carried a new report this week that shows Nevada's major hotel-casinos posted their highest net income ever in fiscal 2006 - a combined $2.1 billion.
The report released by the state Gaming Control Board also showed that the 274 Nevada resorts had $5.4 billion in earnings before taxes, interest, depreciation and amortisation, or EBITDA the indicator that analysts watch most closely.
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The EBITDA, 23 percent of the resorts' $24.08 billion in total revenue for the fiscal year that ended last June 30, compares with $4.5 billion in EBITDA in the previous fiscal year. The previous year's revenue total was $21.4 billion and its net was $1.8 billion.
"We have record net income and record revenues," GCB analyst Frank Streshley said in going over the board's annual Gaming Abstract. "There was substantial growth in all revenue areas, not just gaming."
Streshley said increased gambling by both out-of-state tourists and by locals helped to fuel the record revenues. He added that another construction boom is starting, and that bodes well for the future.
The net income of $2.1 billion in the unaudited report is the money left over after various expenses and state taxes but not federal taxes are deducted from gross revenues. The clubs paid $928.2 million in state gambling tax and license fees.
Depending on individual clubs, the federal taxes can take as much as a third to half of the net revenues. Post-federal tax figures aren't included in the report.
Casino departments at the big resorts reported a total of $91.1 million in bad debt expenses and $1.96 billion in complimentary services to high-rolling gamblers.
But while the combined expenses increased by 11.7% from year to year, total revenue increased by 12.8 percent and net revenue increased by 17 percent.
The $24.08 billion in statewide gross revenues in fiscal 2006 includes $11.8 billion from casino games, up $1.1 billion or 10.8 percent from the prior year.
As a percent of total revenues, casino games accounted for 49 percent of the total, down from 49.9 percent. Hotel rooms revenues increased 14 pecent to $4.89 billion, or about 20 percent of the total.
Restaurant food increased 12.8 percent to $3.3 billion, or 13.7 percent of the total; and liquor and other bar sales increased 12.2 percent to $1.3 billion. Other revenue, largely from leases of resort space to retail shops, restaurants or other businesses, increased nearly 20 percent to $2.77 billion.
On the expense side of the ledger, executives' pay decreased 69 percent, to $52.9 million. The decrease was due mainly to big bonuses paid to some Strip executives in the prior year that weren't repeated in fiscal 2006.
Payroll for administrative, non-departmental employees increased 8.7 percent to nearly $1.2 billion; interest expenses increased 35 percent to $1.6 billion; utility costs increased 5.4 percent to $423.2 million; advertising was up 5.5 percent to $430.8 million; and "other" expenses increased 16.5 percent to $1.6 billion.
All those costs are listed under general and administrative expense, which totaled $8.47 billion. That's up 11.7 percent from the previous year.
The report is based on financial data from 274 hotel-casinos that each grossed more than $1 million during the year and account for almost all of Nevada's casino revenues.
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