Third installment of the "Inside the Numbers" series (see 2010 & 2012 for previous installments) examining the latest Nevada Gaming Abstract and highlighting 2013 developments and a comparison of the most recent year vs. years gone by. 1. Less gambing, more debt In 2013, casinos statewide lost a net $1.348 Billion dollars. In 2007, casinos statewide earned a net $2.297 Billion dollars. Why did an industry with an ownership structure basically unchanged over the past several years (19 publicly held corporations, of which 8 owned 2 or more casinos controlled just over 3/4 of all casino revenue) take such a hit ($3.645B swing) since 2007? Less Gambling: $1.6B Gambling revenue 2007: $12.4B Gross; $6.0B Net. Gambling revenue 2013: $10.4B Gross; $4.4B Net. More Debt: $1.2B Interest expense 2007: $1.7B Interest expense 2013: $2.9B That's a huge increase in the cost of debt during a period where revenues declined $2.0B. Then again, what do Loveman or Murran care, they haven't put a dime of their own money into the business. 2. If you build it, they won't come: Clark County Occupancy rates: 2007: 90.14% 2013: 85.22% Room rates actually decreased by $6 ($123.07 vs. $115.66; or a 16.1% decrease adjusted for inflation) over this period. 16% off for nicer rooms works for the guests, not so much for the shareholders. Casinos made up for this $7 loss, with a $7 increase in beverage income, but they weren't able to make up for the significant drop in average machine play ($178 vs. $146, $32 in dollars or a 27.2% inflation adjusted decrease) or table play ($87 vs. $80). Tighter machines, poorer pay tables and crapjack may churn gamblers faster, but they don't bring in more dollars or gamblers. Binion > Loveman. 3. Gambling remains king: Gambling experienced a significant drop off over the past six years, and club/non casino revenue has increased over the same period. However, Gambling is still the bread and butter in terms of profit, even on the Las Vegas Strip, home of clubs and 6/5 blackjack/video poker. Clark County Statistics: 2013 Gambling Profit: $3.661B (40.8% Profit Margin) 2013 Food Profit: $0.297B (9.6% PM) 2013 Beverage Profit: $0.557B (37.5% PM) 2013 Other Profit / Revenue:$1.187B (45.9% PM) Casinos make more on shows and other misc. revenue vs. food and beverage (at a better margin). If you backed out 100% of all comps [room ($0.882B), food ($0.568B), beverage ($0.541B) and misc ($0.116B)] comps from Gambling Profit, you'd be left with $1.554B in profit, larger than food/beverage/other combined, and not all comp dollars are spent to attract gambling. Rooms account for a large profit ($2.543B), and casinos on average comp 1 in every 5 rooms (down from 1 in 4 in 2010) to generate their bread and butter, gambling profits.