# Commercial Casino & Racino Gaming Revenue Analysis

A Amount of Adjustment
Oops! That giant hissing sound is the gaming balloon that had been growing through the years, slowly losing air. But, it has not been a tide that lowered all ships however, as some emerging and expanding gaming jurisdictions showed strong growth in 2008.
Overall, the commercial and racetrack casino sectors (excluding Indian gaming), experienced a 3.5 percent decline in gaming revenues for 2008, generating a complete of $36.2 billion, down some $800 million from 2007. It had been the Racino sector that has tempered this drop, while they showed a gain of almost $1 billion in 2008, thereby bringing the Commercial sector market decline to $1.8 billion, or 6.7 percent. Nevada was the greatest loser in 2008, dropping almost $1.3 billion, over fifty percent that stemmed from the Las Vegas Strip segment.

Hunkering Down
For probably the most part, casino operators were caught relatively flat-footed by the extent of the 2008 revenue downturn, as it was not before the third and fourth quarters when it really nosedived. Riding the crest of year over year market growth across the country and the option of ample credit and equity funds, new construction and expansion proliferated in recent years. Today, up against the realities of declining, or at best stagnant demand, several projects are now considered over-leveraged and/or over-sized. As a result many gaming companies are trying to renegotiate their debt - made more difficult by lower valuations - while also paring down operational costs. The latter has become a very problematic conundrum when working with your competitors, especially in those jurisdictions which are now vying for market shares with new emerging casino projects in neighboring areas. A topic we discuss more fully in the State by State analysis section with this publication.

As a result of these conditions the gaming industry landscape is currently strewn with impending fatalities. One of the more notable troubled firms are Station Casinos, Empire Resorts, Harrah's Entertainment, Greektown Holdings, Legends Gaming, Tropicana Entertainment, Herbst Gaming; and the list grows each week.

"How long will these economic conditions persist, and are we in the bottom yet?" are questions nobody is apparently answering yet. What's clear however is that most gaming jurisdictions must learn to deal with a smaller pie.

Note:
This analysis includes only gaming revenues of licensed casinos and pari-mutuel outlets that offer casino games, and not Indian gaming operations, card rooms, or small non-casino [gamehall casino](https://ufagame.info/gamehall/) type slot locations. The entire article, including revenue tables is available on our web page.

Input/Output Model
A key aspect that seems to have arisen from the ashes with this current trend is that many casino projects were just too big to support themselves. The input, with regards to investment dollars, was not proportional to the output, with regards to net profit after debt service, compared to previously achieved results. More and/or bigger is not at all times better. Seeing the rise in non-gaming revenue at the Las Vegas Strip resorts, gave impetus to the development of more comprehensive amenities in many other jurisdictions. The flaw in this strategy however is that the costs connected with widening market penetration and occasioned-use, are significantly greater than those incurred to attract the base market.

As daytripper markets be more competitive, casino venues must rely more and more on the in-house hotel patrons, and size their properties (and expectations) accordingly. While Steve Wynn started an important trend in creating up-market mega-destinations, there simply was not enough demand on the Strip to warrant the many other similar projects that followed that directed at the exact same niche.