Using yesterday to guess at tomorrow


It is the end of a year, 2012; the end of any year always brings out two kind of pundits, those who summarize the preceding year and those who peek into the future.  Both are subject to error, the summarizer is never totally wrong because he has the data before him to compile his top ten list or to construct his narrative of the year or to recap the year’s biggest story.  But he is never completely right either, other observers have different things on their list and their narrative of important events is told from their own unique and subjective point of view.

The predictors on the other hand have very few facts, at best they have the trends of pervious year to use – fore example, housing sales, retail growth, consumer confidence or gaming revenues.  However, the new year is never like the previous, that makes it possible, even probable that those telling us what is going to happen next year will be wrong.  Still there is some benefit in both exercises.

If we look closely at the current year and its trends we can get a sense of what might happen and that can be useful in thinking about and planning for a new year.  Especially now after 5 years of the Great Recession, a handful of natural disasters and now we are standing on the edge of the “fiscal cliff”  – so we need a little guidance.  Common wisdom has it that many businesses and individuals have been unwilling to invest in an uncertain economy; they waited out the unemployment; they waited out the presidential election; they waited out the congressional debates over new taxes; they have just waited and waited.  But, they will invest, it is said, if they understand the conditions they face and if they have faith the economic and tax environment will be stable in 2013.

So, what will 2013 be like for the gaming industry? I can’t say that I have any clue, except to say that in Reno, the state of Nevada and California there are signs that the economy is improving.  There will be one more major casino built in California, but it will not open until 2014, so in 2013 the economy will be more important factor for the gaming industry in our region.

In the Northeast, the economy is further along in the recovery process than in the west, but there is more competition in the pipeline.  Not all of it will come in 2013, but competition will be a more important factor for the gaming industry in that region and the includes all of the states bordering on Ohio.

For the rest of the country, the south and the mountain west, the economy will be the most important fact and there too, the recovery is further along than on the west coast.  There you have it, gaming will improve slightly in some areas, but not in others.  The regions were it there is improvement in gaming revenues will be the ones that are not facing new competition, but are seeing slight improvements in the overall economy.  In other regions, gaming revenues will continue to decline.  The decline will happen in those regions with more competition; that is the states that get a significant amount of their gaming revenues from the citizens of Ohio, New York, Massachusetts, Rhode Island and Maryland – those people will be staying home to gamble more in the next couple of years than they did in the past.  And that is my prediction for 2013, the gaming industry will remain stable, decline or grow depending on the economy and the competition.  So, if you know to the answer to those two questions, you know what to expect in 2013 in gaming.

 Once again this year at coast casinos, there are empty parking spaces, and money is not flowing as freely as it once did. The proof is in the numbers. In 2007, casino revenue was a record $1.20 billion. In 2011, that was down to $1.01 billion. This year is down again to $1.0 billion, a drop of $200 million in five years…”Well, it certainly reflects the economic turndown we’ve seen since 2008 and I think that’s when we saw the numbers start dropping,” Kirkland explained. “We haven’t recovered from that and on top of that we had the BP oil spill.” …There are signs of recovery. Hard Rock is building a new hotel tower. The Isle will see a name change to the Golden Nugget and $120 million worth of improvements.  Chris Latil is the general manager.  Doug Walker, WLOX, 12-27-12

 Come midnight Monday, we will say goodbye to 2012. Most of us are happy to see this year end.  Between Hurricane Sandy and other storms that caused severe damage to various sections of the community, the misinformation broadcasted by national television and radio stations — as well as printed in newspapers about the condition of the Boardwalk and the city — the drop in business overall and with the increase in the number of murders, it was not a very good year. As this year draws to a close, we have much to look forward to in 2013…  Pinky Kravitz, Press of Atlantic City, 12-27-12

 After two years of modest reinvestment and upgrades of Strip properties, a group of gaming industry analysts and brokers believe more than $1.5 billion will be invested by companies and investors in the Las Vegas gaming real estate market over the next two years. Colliers International issued the upbeat forecast to introduce its new gaming division. Chris Sieroty, Las Vegas Review-Journal, 12-27-12

 The economy stirred in the past year across the greater Reno-Sparks region after a years-long, recession-induced slumber.  Consumers are spending more and the long-suffering housing market has come to life after prices hit bottom in early 2012. Plus, Washoe County’s job market has seen unemployment dip to a four-year low of 9.9 percent as of November after starting the year at 13 percent.  The picture, though, remains muddy for the gaming sector as it struggles to compete against ongoing recession, as well as tribal gaming in neighboring California, home to Northern Nevada’s main tourist market. But the improving housing market…is the key to recovery since it reflects rising confidence, said Mark Pingle, economist at the University of Nevada, Reno. “It still has a long ways to go before we see strong construction again like we once had,” he said of the pre-recession boom times that saw the median sales price of an existing home in Washoe County reach $350,000 in 2005. Bill O’Driscoll/ Yun Long, Reno Gazette-Journal, 12-27-12

Indiana state government could see a big drop in casino tax revenue over the next two years because of competition from new casinos in Ohio. The latest state revenue forecast …annual casino tax revenue to decline by about $42 million, or 9 percent….Senate Appropriations Committee Chairman Luke Kenley, R-Noblesville, said he didn’t believe Indiana’s casino revenue would ever return to the levels seen when there was little competition from neighboring states. He said state lawmakers should support measures that ensure Indiana’s casinos remain as competitive as possible…“You’ve created an industry you’ve said, ‘We’re willing to have,’ and you have to be viable,” Kenley told the newspaper. “So now I think it’s a question of whether we’re going to make changes that allow them to continue to be viable or whether we’re going to let the industry just die.”  Associated Press, South Bend Tribune, 12-27-12

International Game Technology… hosted a day with investors and analysts to discuss the company’s business prospects heading into 2013…has hit its share of speed bumps in 2012. Still, CEO Patti Hart and Chief Financial Officer John Vandemore were bullish on IGT’s efforts in the coming year. IGT’s No. 1 priority is to return cash to shareholders through stock dividends and the share repurchase program. The company also wants to build upon its core slot machine business, focusing on increased sales. IGT’s expansion into the interactive gaming market, both real money and free-to-play activity is also expected to increase. “With all the talk about smaller, more nimble competitors taking share, management highlighted that IGT’s global revenue share was stable at 31 percent in 2012 versus 31 percent in 2009,” Macquarie Securities gaming analyst Chad Beynon said after the event. “We came away incrementally more optimistic on the business going forward.” Howard Stutz, Las Vegas Review-Journal, 12-27-12

Advertisements

1 Response to “Using yesterday to guess at tomorrow”


  1. 1 rexdstock1 December 28, 2012 at 8:00 pm

    body {word-wrap: break-word; background-color:#ffffff;}Nice read.  Honored that a couple stories that caught my contrarian eye made it to your well-written piece, though I am not sure what you were trying to show by having these press releases in your piece without some sort of handicapping… It pretends that those articles were done with journalistic discipline, or, as I contend, the press being played by special interests.  Pinky Kravitz says that the affect Sandy had on the Boardwalk was somehow overblown by “national media”, and I have the carnage numbers from the water washing ashore from a guy who is assessing the damage from a mechanical (facilities) standpoint and those properties on the Boardwalk got their ass absolutely kicked.  Much of it not covered by insurance because the equipment was already way past its scheduled life.  My friend put in most of those systems (HVAC) and he is a key player in AC that no-one outside of AC knows…  He’s also a great, kind, human being who loves AC just like other very talented people in AC (Mike Pollock amongst them) who have fought so hard to make AC a true destination resort.  Kevin D is not in that group.  Gomes was.  Fuck Trump.   Sent from my Verizon Wireless Droid


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s




Disclaimer

This is a personal blog and the information in articles posted here represents my personal views. It does not necessarily represent the views of people, institutions or organizations that I may or may not be related with, and is not sponsored or endorsed by them unless stated explicitly. Comments and other public postings are the sole responsibility of their authors, and I shall not take any responsibility and liability for any libel or litigation that results from information written in or as a direct result of information written in a comment. All trademarks, copyrights, and registered names used or cited by this website are the property of their respective owners. I am not responsible for the contents or the reliability of any articles excerpted herein or linked websites and do not necessarily endorse the views expressed within them. I cannot guarantee that these links will work all of the time and have no control over the availability of the linked pages.

Pages

December 2012
M T W T F S S
« Nov   Jan »
 12
3456789
10111213141516
17181920212223
24252627282930
31  

%d bloggers like this: