The Las Vegas-Review Journal reported today that Nevada casinos posted a cumulative operating loss of $743.7 million in 2014. While that sounds terrible, it was about half of the loss from the previous year. The loss accounts for all segments of the business, including gaming, hotel, entertainment, and dining. It subtracts the costs of goods sold, including labor, as well as interest and other expenses related to assets used in the gaming business.
Most of this loss can be attributed to resorts on the Las Vegas Strip. Caesars Entertainment, which will likely file for bankruptcy protection this month, is a major cause of that loss. Gaming revenue on the Strip was just under $5.99 billion in 2014, up four percent from the previous year.
Caesars Entertainment has stated that 39 percent of its creditors support its $18.4 billion debt restructuring for its soon to be bankrupt operating unit. The debt would be slashed to about $8 billion while the company would be restructured to include an operating unit and a real estate investment trust. The bankruptcy filing is expected in the next few weeks.
Revel, an Atlantic City casino that closed in September, has finally been sold. The new buyer is Glen Straub. He plans to use the former resort as a community think tank that may later include a casino. The property cost $2.4 billion to construct. It sold in bankruptcy for $95 million.
Brookfield Asset Management walked away from a previous deal to buy the casino due to a contractual obligation with a power plant built specifically to power the Revel resort. The new buyer has shared these same concerns and may not honor the previous agreement that caused the first sale to fall through.
Indiana State Rep. Alan Morrison has introduced two sports betting related bills. One would allow the state’s racetracks to accept wagers on fantasy sports. The other would legalize full sports betting. Both would require approval by the Indian Gaming Commission that the activity is legal under federal law.
The state has been dealing with five years of declining gaming revenue. Some of this loss may be related to the economy, but new casinos in Ohio are thought to be the major contributor.
The casinos in Atlantic City are not the only gaming businesses struggling. The Atlantic City Race Course will close its doors permanently on January 16, 2015. Declining business conditions were cited as the reason for the closure. The racetrack has been in business since 1946.
Atlantic City lost four casinos in 2014. Trump Taj Mahal barely averted a closure, but its parent company remains in bankruptcy.