Positive Forecast As Nevada Gaming Revenue Set To Recover By Late 2011December 7, 2010 10:22 am
According to a report released today by PricewaterhouseCoopers (PwC), the state of Nevada’s gaming revenue should begin to recover in late 2011, eventually returning to pre-recession levels by 2014.
In 2006, the Nevada gaming industry was still experiencing double-digit revenue growth and by 2007 its gambling revenue had peaked at $12.7 billion before the recession took hold.
Nevada’s gaming industry has been in the doldrums ever since, with even the Chinese enclave of Macau managing to usurp Las Vegas as the world’s biggest gambling resort.
However, PwC has now bucked trends by issuing a report which puts a positive spin on the competitiveness of Nevada’s gaming industry, which PwC believes will enable it to increase its gaming revenue from $10.2 billion in 2009 to $12.5 billion by 2014.
Despite Nevada’s gaming revenue increasing during the second half of 2010, PwC forecast that this year’s overall revenue will finish down by 2.9%, with single-digit gains not expected until 2012.
As the report states: “As the global economy recovers, and international visitors return alongside domestic visitors, Nevada continues to be better placed to capitalize on the upturn than Atlantic City,since Nevada is less affected by competition from regional casinos. This means Nevada should be able to absorb the new capacity and start to rebound, once the economies and disposable income improves.”
The PcW report also predicts that US gaming revenue will rise 3.6% annually to $68.3 billion in 2014, keeping it ahead of Asia Pacific gaming revenue which is expected to reach $62.9 billion by the same year, but via a 23.6% growth rate.
However, PcW also highlights the challenges facing the casino industry, not least from online non-gambling entertainments. The report concludes:
“In markets across the world, the proliferation of digital challenges and services is driving an explosion in the entertainment choices available to consumers, ranging from 3D movies to mobile TV to massively multi-player online games.”
“The single biggest challenge facing the (casino) industry will be staying close to its consumers — at all levels of spending — and ensuring the experience remains sufficiently compelling to override other potential choices.”