Casino Gambling Surges Most Since Crisis to Approach Peak
Casino revenue in the U.S. climbed 4.8 percent in 2012, the industry’s biggest annual advance since the Great Recession hit four years earlier.
Consumer spending on casino gambling reached $37.3 billion last year, just below the $37.5 billion record haul in 2007, according to a report released today by the American Gaming Association, an industry trade group.
The group credits an improving U.S. economy and higher consumer spending for growth that was strongest in areas with new casinos, such as Maryland and Kansas. Some mature markets struggled, including New Jersey, which shrank 8 percent and lost its No. 2 ranking to neighboring Pennsylvania.
“After three years of increasing growth and positive signs in all sectors of the industry, it’s clear that we have weathered the recession,” said Frank Fahrenkopf Jr., chief executive officer of the American Gaming Association, in a statement.
Fifteen of 22 states with commercial casinos saw increases, according to the report. New Jersey, squeezed by competition from its neighbors and Hurricane Sandy, led declines while Pennsylvania climbed 4.6 percent to $3.16 billion.
Nevada, the biggest gambling market, registered a 1.5 percent increase in gambling revenue to $10.9 billion.
Casino operators expanded in the mid-2000s as industry revenue soared, rising 6.4 percent in 2007. Many large operators were left with too much capacity and burdened with debt when the industry contracted 8.6 percent over the next two years.
Large players including MGM Resorts International (MGM), Las Vegas Sands Corp. (LVS) and Caesars Entertainment Corp. (CZR), issued stock, restructured debt or both to weather the industry’s worst downturn on record.
MGM, the biggest player on the Las Vegas Strip, reported a surprise profit last week in part due to stronger domestic leisure travel to Nevada.
“We’ve been climbing back,” MGM CEO Jim Murren said in a telephone interview. “You have to put it in context. We’re so far away from where we were pre-recession.”
The figures released today exclude Indian casinos, a $27.4 billion business in 2011, the most recent year for which data is available, according to Casino City’s Indian Gaming Industry Report.
Commercial gambling revenue in Kansas soared sevenfold to $341.2 million in 2012, while in Maryland it more than doubled to $377.8 million. Maryland Live! Casino, among the largest in the country, opened in the Baltimore suburban of Hanover last year. New York saw a 43 percent increase to $1.8 billion thanks to new slot parlors at New York City racetracks.
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