Strip vs Downtown Losses

Table of Revenue for Strip and Downtown in $millions

Year	Strip	Downtown
2000	$185	$29
2001	$388	$21
2002	$(224)	$1
2003	$514	$24
2004	$1,026	$42
2005	$1,152	$49
2006	$1,249	$141
2007	$1,661	$65
2008	$709	$32
2009	$(4,163)	$(54)
2010	$(2,571)	$(74)

Although the losses on the strip are bigger than those downtown both in absolute dollars and in percentage, I am more worried about downtown collapsing. I assume both regions losses are huge write downs, I just think you can't close the main strip casinos, but at some point it doesn't seem like you can keep on losing money on these poorly performing downtown properties.

Reno/Sparks looks like it's doing better financially since they closed some of the oldest properties. Losses were $21 million or a mere 1.6% for Reno vs 8.1% for Downtown Las Vegas.

However, it may not be a completely fair comparison since Reno/Sparks is 45% bigger than Downtown Las Vegas. Also Reno includes the two large resorts near the airport (Atlantis and Peppermill).

Is that really revenue or profit? Just not sure how you get a negative revenue.


The one bonus I can see for downtown is that the profits made in the previous 3 years far exceed the 2 years of losses. I'm sure it could still go down, but it is at least possible they have a little in reserve.

Quote: soulhunt79

Is that really revenue or profit? Just not sure how you get a negative revenue.


The one bonus I can see for downtown is that the profits made in the previous 3 years far exceed the 2 years of losses. I'm sure it could still go down, but it is at least possible they have a little in reserve.

My mistake. The table is not revenue. Precisely it is Net Income before Federal Income Taxes .

The 2006 revenue is the highest in the last 20 years for downtown Vegas. I doubt that it is in reserve since a big chunk is Stratosphere. Carl Icahn pocketed all the profits, and sold the Stratosphere at a fantastic sum to Goldman Sachs. It's not like it's in bank somewhere.

Here is the highest level breakdown of the revenue and costs for a select group of years. The bottom line is the income or loss for the year.

DOWNTOWN $millions FY	1990		2006	2007	2008	2009	2010
Gaming	$642		$642	$624	$590	$548	$508
Rooms	$107		$232	$185	$194	$152	$136
Food	$102		$158	$157	$156	$147	$138
Beverage	$48		$61	$64	$60	$65	$65
Other	$50		$99	$69	$60	$60	$59
Revenue Total	$949		$1,192	$1,100	$1,060	$972	$906
Cost of sale	$85		$85	$83	$81	$78	$72
Expense: Department	$487		$579	$569	$554	$525	$504
Expense: General & Admin	$354		$387	$384	$393	$423	$403
Expenses Total	$926		$1,051	$1,036	$1,028	$1,026	$979
Net income (loss)	$24		$141	$65	$32	$(54)	$(74)

STRIP $millions FY	1990		2006	2007	2008	2009	2010
Gaming	$2,279		$6,041	$6,491	$6,266	$5,330	$5,167
Rooms	$662		$3,849	$4,082	$4,070	$3,370	$3,106
Food	$441		$2,146	$2,179	$2,321	$2,066	$2,013
Beverage	$238		$823	$890	$826	$847	$910
Other	$319		$2,079	$2,181	$2,311	$2,170	$2,061
Revenue Total	$3,939		$14,937	$15,823	$15,794	$13,784	$13,258
Cost of sale	$286		$1,027	$1,089	$1,070	$971	$972
Expenses: Departments	$2,071		$7,410	$7,884	$7,865	$7,465	$7,284
Expenses: General & Admin	$1,224		$5,251	$5,189	$6,149	$9,510	$7,572
Expenses Total	$3,581		$13,688	$14,162	$15,085	$17,946	$15,828
Net income (loss)	$358		$1,249	$1,661	$709	$(4,163)	$(2,571)

The years are fiscal years, and not calendar years. So Fiscal Year 2008 ended 30 June 2008 well before the recession hit. But notice that even though revenue was down only slightly from FY2007, general and administrative costs were already going up cutting income in half. So in addition to plunging revenue, the Strip has a problem with increasing G&A costs.