UNLV Study: Nevada Casino Debt Soars to Unprecedented Height
The debt has piled high for Nevada casinos, sending the state's largest industry into a record deficit, according to a study released by the University of Nevada-Las Vegas (UNLV) Center for Gaming Research, reported the Associated Press.
Researchers found total liabilities for Nevada's gaming sites hit $51.2 billion during the fiscal year that ended in June 2011—an 18-fold increase since 1984. At $22 billion, revenue for the same period was just five times the earnings from 1984.
Since 2008, casinos have owed more in long-term debt than their collective revenue each year, said Dave Schwartz, the director for UNLV's Center for Gaming Research. “This says that the growth that we saw and the investment that we saw in the middle of the decade was quite different from what we saw in the middle of the 90s,” Schwartz told the AP.
The golden years for Las Vegas casinos proceeded the Great Recession. Developers eagerly fulfilled visions of grand megaresorts and casinos, financing construction payments and privatizing major gaming establishments like Caesars Entertainment Corp., then Harrah’s Entertainment, and Station Casinos Inc. Debt weighed on the companies after corporate buyouts.
Collectively, the state's casinos drowned $14.2 billion before taxes from July 2008 to June 2011, the AP reported. Since fiscal 2009, Schwartz told the AP, general and administrative costs for things like interest payments and write-downs have accounted for more than half of all casino revenues statewide.