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Land Gambling Industry Still Going Down
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11/18/09 - When Frank Fahrenkopf, chief of the American Gaming Association, speaks at the annual Global Gaming Expo in Las Vegas, both the online and land branches of the gambling industry look for indicators on the health of the business and the direction it is taking.
This year was no exception as Fahrenkopf addressed delegates to the 2009 event.
He told the audience that U.S. commercial casinos took in $7.94 billion in revenue during the third quarter, 5.5 percent less than a year earlier, and that while economists believe the country is moving beyond one of the worst recessions in history, that's not a practical reality for many casinos or their customers.
"Main Street is still feeling the heat, in fact, of the economic downturn," Fahrenkopf said. "The same has to be said very clearly for the gaming industry."
The Expo itself reflected this weakness, the gaming exec observed, noting that exhibitors signed on for roughly 20 percent less space than last year. Attendance figures were not immediately available, though Fahrenkopf said organisers hoped 25 000 people would come to the four-day gathering, compared with 26 500 last year.
The convention business, or rather the lack thereof, has particularly hurt casinos in Las Vegas, where revenues fell 27.1 percent for the first nine months of the year.
Associated Press quotes Fahrenkopf as saying that casinos will likely stay down until more people have jobs and more discretionary income. And he predicted that gambling's recovery will lag the general economic recovery by a few months.
Land casino operators were nevertheless generally optimistic. “The news is better,” said Fahrenkopf. "We’re seeing some signs of a recovery and some have said we hit bottom. It’s still challenging.”
He noted that in Pennsylvania new land casinos had opened, and said he expected the governor would soon sign a bill authorising table games. This has put pressure on neighbouring Atlantic City in New Jersey.
One of the interesting elements in Fahrenkopf's address concerned the results of a survey the AGA carried out among its subscribers.
Asked to assess the current business conditions, 44 percent said conditions were getting somewhat better; 31 percent thought conditions remained depressed, but were neither better nor worse; 44 percent thought it would be three to four years before the industry was back to the successful pre-2008 levels.
The survey also touched on Internet gambling, where 39 percent of respondents opined that the legalisation of Internet gaming would dominate the news in 2010.
The gaming chief said that the Internet gambling issue, on which the AGA has taken a neutral stance due to differences of opinion among its member companies, would probably again be discussed at the Association's December board meeting.
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