Bill Harrah, Donald Trump and some depressing numbers

Numbers alone and by themselves are meaningless if they no context, comparison or accompanying narrative.  We need something more than the numbers themselves to give them meaning.   So, for example, to say that the casinos in Mississippi generated $192 million in July does not give one much insight into the casino industry in Mississippi.  To give any set of financial numbers context we normally compare them to a previous and comparable period.

Again, using Mississippi, in July the casinos in Mississippi generated 6 percent less revenue in 2013 than in 2012.  That helps a little, but it brings as many questions as it does answers. Why was revenue down this year?  Was July an anomaly or typical of 2013?  What does the comparison tell us about the economy in general?  Is there larger trend being revealed in those numbers?

In July, the Biloxi Sun-Herald gave us some additional comparisons – the Mary Perez compared July in each of the last five years.  And those numbers really put the $192 million the casinos reported this July in context – in the last five years, gaming revenues in Mississippi in July have dropped 22 percent.

At the Coast casinos, winnings fell 8 percent from July 2012, when the casinos had their best month in four years. River casinos were down 4 percent in July and the state gross casino revenue was down 6 percent….revenue fell at the 12 Coast casinos to $97.0 million this year from $105.4 million…The river casinos…saw revenues decline to $95.2 million from $99.1 million last July…The state’s $192 million total gross casino revenue for July compares to $205 million in July 2012, $211 million in 2011, $224 million in 2010, $225 million in 2009 and $249 million in 2008. Mary Perez, Biloxi Sun-Herald, 8-21-13

As of August 21st, all of the major casino jurisdictions, with all casinos open at least one year, have reported the gaming revenue for July.  Except for Louisiana which reported a 7 percent increase in gaming revenues and Detroit, which reported essentially flat revenues, all major jurisdictions reported a decline in revenues in 2013 as compared to 2012.

Each jurisdiction has its own narrative.  Atlantic City dates its decline from the beginning of casino gaming in Pennsylvania; Mississippi dates its revenue decline from Hurricane Katrina;Indiana’s narrative concerns the Ohio casinos; West Virginia cites Pennsylvania and Ohio; and Connecticut blames Maryland and New York and soon Massachusetts will be added to the list. Most of the other jurisdictions list both increased competition and the economy in their narratives.

Nevada’s narrative has several parts.  The Strip in Las Vegas Strip has its own narrative; the downtown and the regional casinos in Las Vegas, Laughlin, Lake Tahoe, the rural counties and Reno all have separate narratives.  The Reno narrative is close to my heart, it is personal for me.  Reno has been in decline since Indian casinos were introduced into California, Oregon and Washington; the impact of those casinos began to be felt Reno in the early 1990s and has continued. In fact, the next major casino in California will open this fall, located outside San Francisco, it will add to Reno’s woes.

And here is one more way to contextualize numbers – with an anecdote from the world of bricks, mortar, flesh and blood. Yesterday, Harrah’s Reno was granted a reduction in its valuation; but it was not enough according to the corporation.  Caesars says it could not sell the property for more than $8 million, half the value the state puts on the property. The comment will be startling for most in Reno – startling and maybe even frightening.

One could argue that the eight million dollar hotel is reason Caesars is the largest casino corporation in the world.  The multi-jurisdictional, 50-plus-casino corporation was launched from that hotel. It was once the crown jewel of Bill Harrah’s crown.  However, Harrah’s Reno has lost its luster; Caesars says it would take $19 million to bring it update and repair the damage caused by neglect.  Sadly for the people of Reno and Reno’s downtown casino core, Reno is not very high up on the Caesars list of priorities.

A state tax panel has ordered a $4 million reduction in the taxable value of Harrah’s hotel-casino in downtown Reno. But Harrah’s officials say that’s still about twice as much as the $8 million they think they could get if they tried to sell the aging property that also needs about $19 million in repairs… On Monday, the State Board of Equalization voted to put the property’s taxable value at $16.2 million, the Las Vegas Sun reported. Before the vote, the Washoe County Assessor’s Office had set hotel-casino’s value at $20.5 million compared with the $8.8 million Harrah’s claims the property, crowned by the 25-story, 928-room tower built in the late 1960s, is worth. Reno Gazette Journal, 8-21-13

However, one should not make too much of the July numbers.  July is only one month, 2013 is just one year.  The economy will get better and the increase in competition will level off.  Eventually even Atlantic City will have absorbed the competition, reached the bottom of the decline and begin to slowly improve.  But by the time that happens properties Trump in Atlantic City and Harrah’s in Reno may have disappeared.  Donald Trump doesn’t care.  Trump has moved on – at the moment he is in Florida building golf courses that he hopes will end up with a casino.  And Bill Harrah is dead.  Change is a natural and necessary part of life.  Atlantic City needs to move passed the Trump era and Reno, as painful as its for loyal Bill Harrah fans, is going to have to move passed the Bill Harrah era. This is after all the 21st century.



1 Response to “Bill Harrah, Donald Trump and some depressing numbers”

  1. 1 Lynne Rosner August 22, 2013 at 11:39 am

    21st century, another trifling number to be put in context. To whom. Happy Chanukah from Turkey we can say this year as long as we are not the bird in Istanbul.
    I am sorry to hear about Harrahs, they served a delightful brunch, I would attend with my mother and bring baggies to take home some of the pastries.. they were that tasty.

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