Gamblers are holding onto their money in the face of a weakening economy — putting Kansas City-area casinos on track for their first year of decline since the first one opened in 1994.
In order to top record 2007 revenues of $720.7 million, local casinos must win nearly $61 million from gamblers this month — and that doesn’t appear likely.
November riverboat revenues were flat at $58.5 million, up less than half a percent over the same month last year.
Since September, monthly revenues at the area’s four riverboats have collectively averaged just $56.3 million. While December is normally a strong month for the casinos, no one is expecting a holiday bounce this year.
“It’s going to be extremely difficult,” said Troy Stremming, a vice president at Ameristar Kansas City Casino and Hotel. “Unemployment is at the highest levels I’ve seen in my adult life.
“We’re hopeful” of another market record year, he said, “but this is further evidence of how difficult these economic conditions are.”
The national malaise has hit the casino industry — once considered recession-proof — especially hard with layoffs and expansion cancellation announcements becoming commonplace.
Last week’s withdrawal of the proposed Hard Rock Hotel & Casino project at Kansas Speedway in Wyandotte County was only the latest U.S. project to go belly-up as national credit markets shut down. It was the sixth of seven proposed casino developments in Kansas to fold this year.
Even the Las Vegas Strip, the epicenter of global gaming, isn’t immune to the downturn. October revenues, the latest data available, were down a staggering 25.5 percent — with related declines of 12.8 percent in airline passenger traffic to Las Vegas and 6.4 percent in hotel occupancy rates.
“It is clear that the gaming industry is in more trouble than perhaps it has ever been before,” Deutsche Bank analyst Andrew Zarnett warned investors.
Zarnett said data nationwide shows not only that gamblers are visiting casinos less frequently, but appear to be losing less money per capita when they do show up.
That double whammy hasn’t hit the Kansas City market — yet.
While local turnstile admissions in November fell a combined 2.3 percent last month, the average gambler’s loss of $69.24 per casino visit was up 2.1 percent from a year ago.
But that modest increase might be the first visible impact of voters’ repeal last month of Missouri’s $500-loss limit that cleared the way for high-stakes gambling in the state.
“Clearly it has helped to stem the tide of what happened in September and October,” said Tom Cook, general manager of Harrah’s North Kansas City Casino & Hotel.
“Our employees feel they get to be a real casino now without monitoring people’s buy-ins and slowing down the deals.”
Stremming agreed. He said last weekend’s Big 12 football championship crowds appeared to take readily to his casino’s new high-stakes tables.
“All of those out-of-state people were here and they were gambling at a higher level …Creating obstacles was ridiculous,” he said of the limits.
“There’s no doubt (the repeal) will give us the tools we need to better market Missouri’s casinos as regional gambling resort destinations.”
Until then, local casinos have a recession to survive.
Kansas City area turnstile admissions in November were down 2.3 percent from a year ago, to 1.74 million. That was a slight improvement over September and October admissions that averaged around 1.6 million and were among the lowest monthly tallies in more than 10 years.
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