Saturday, October 30, 2010

Arizona Tribal Gaming Revenue Stablizing

Unlike the continuing trouble with Nevada gaming, the tribal gaming properties in neighboring states are somewhat stable. Casino Gambling Web reports that current gambling revenue for the quarter will come in at around $22 million, about 1% higher than the same period last year, reversing the declining revenue trend of the last couple of years due to the economy.

The tribal properties in Arizona pay differing tax rates, depending on their compact with the state. The article states that there are 22 tribal gaming properties in Arizona, with each property paying a tax rate that varies between 1% and 8%, again depending on the compact.

Since Arizona stirred up controversy and a boycott due to its illegal immigration law, that seems to have not had a huge negative impact on gaming revenues.

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Wednesday, October 13, 2010

Atlantic City Gambling Revenue Takes Hit

Test Test Test

Bloomberg reports that Atlantic City gambling revenue fell 12% in September 2010 from September 2009 levels. Gambling revenue was $2.8 billion in the first 3 quarters of 2010, which was almost 9% less than the same period in 2009.

The economy is definitely a factor, but the impact of competition must be looked at as the primary factor for reduced gaming revenue. Surrounding states such as Delaware, New York and Pennsylvania have increased their gambling offerings for their local populations. No need to travel to Atlantic City if the gambler can play close to home.

Atlantic City needs to prevail in New Jersey's efforts to allow sports betting to provide the competitive differentiator to bring back this destination. Otherwise, the long term trend for Atlantic City may not look promising.

See previous posts on New Jersey sports betting here, here and here. The posts discuss New Jersey's efforts and surveys with regard to establishing sports betting and overturning PASPA.

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Wednesday, October 6, 2010

California Tribal Gaming Now Even More Competitive with Northern Nevada Casinos

This blog has discussed the threat to Reno and Tahoe casinos from California-based tribal gaming properties. The key advantage of the tribal casinos is that the tribal properties are much closer to the California population centers than Reno and Lake Tahoe. The New York Times has an article that highlights the proximity advantage as well as the upgrading of the tribal facilities to become more full-amenity hotel casinos.

I've posted a similar sentiment to the Times article a few months back. That post can be found here. The most controversial post on this blog regarding the topic can be found here. Specifically what do Reno and Lake Tahoe do to combat full-amenity tribal hotel casinos that are located much closer to California cities? In the last referenced post, I discussed that Nevada casinos may need to exploit the two things they can offer that California casinos can't - sports betting and legal brothels. Sports betting probably won't generate the level of revenue to make up for lost slot revenue, but legal brothels may be enough of a differentiator to pull sufficient traffic to the Reno and Lake Tahoe properties to hold their own. Right now, Reno and Lake Tahoe are hurting to the tune of a 25% decrease in gaming revenue since 2007.

The article describes that Reno properties are becoming more akin to the casinos that cater to the locals market, similar to how Stations Casinos operate their Las Vegas properties. The problem is that there may be too much casino capacity in Reno compared to the approximately 250,000 population base. In addition, the locations of the various Reno properties are not as well positioned as the suburban-located properties in the Las Vegas area.

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