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Local casinos hauled in a market record $705.5 million in pretax gross revenue for the 2006 fiscal year that ended June 30. That was up just 3.6 percent after a 4.8 percent bump in fiscal 2005.
“It started out as a great year but probably didn’t end that way with concerns about the economy and gas prices,” said Dave Albrecht, general manager of market leader Ameristar Kansas City Casino and Hotel.
“These lackluster last four or five months of the year may be just a time people are pulling back a little bit. But overall the market had a great year.”
So did state lotteries in Missouri and Kansas, with each posting double-digit growth and sales records.
The Woodlands pari-mutuel track in Kansas City, Kan., however, continued to struggle. Revenues for the first six months of 2006 are running nearly 4 percent behind their 2005 pace as the track appears to be getting little if any bounce from the nearby and booming Kansas Speedway and Village West retail and entertainment district.
Statewide, the Missouri Gaming Commission reported that Missouri’s 11 casinos won $1.57 billion from gamblers, up 4 percent and $61 million over the same 12-month period a year ago.
That is more than the $1.07 billion that Missourians spent last year on other entertainment like bowling, commercial sports, orchestra performances, movies and movie rentals combined, according to taxable sales figures reported annually by the Missouri Department of Revenue.
But it was less than the $10 billion they spent in department stores, $7 billion in eating and drinking places and $4.8 billion on furniture, leaving gambling a tiny but growing slice of the consumer spending pie.
The upside from a taxpayer’s point of view is that casinos pay around 27 percent in gaming taxes alone, and most of it — $421 million this year — is earmarked for public education.
For the year, Ameristar led Kansas City’s four casinos with a market record win of $259.9 million, up 6 percent.
Harrah’s North Kansas City Casino and Hotel was next at $201.7 million, up 9 percent. Neither was a property record.
Harrah’s had nice fall and winter bumps in admissions and revenues after opening a $126 million expansion, including a nongambling nightclub, new restaurants and a second hotel tower. Since April, however, those numbers have fallen off.
The Argosy Riverside C asino, in the midst of a second major expansion, posted a property record $151.4 million, up 1 percent.
The Isle of Capri Casino was the only Missouri casino to post a negative revenue year — down 8 percent to $92.4 million. Isle executives recently announced an $85 million upgrade, including parking, dining and other amenities. It will be the property’s first major expansion.
Harrah’s suburban St. Louis casino led all Missouri boats with $310.5 million, up 3 percent.
The St. Jo Frontier Casino, at 23 percent growth, and its sister Mark Twain Casino in La Grange, Mo., at 12 percent growth, topped the leader board in their first full year of Herbst Gaming ownership. The St. Joseph property recently unveiled newly remodeled restaurants and a modernized casino floor.
Meanwhile, June revenues statewide were up 6 percent compared with June 2005 — in line with other markets, including Atlantic City, N.J., up 5.9 percent; Illinois, up 5.5 percent; and Indiana, up 6.7 percent.
Kansas City was up 6.2 percent in June with a $57.5 million revenue month that ranked at No. 14 all time.
Per capita losses up
Other figures reported by the gaming commission this week suggest that Missouri’s riverboat revenues are rising not because more people are gambling but because the average gambler is losing more money.
The average loss per casino patron per typical three-hour casino outing in the Kansas City market now stands at $62.09 — up a whopping 41 percent from the June 2000 level of $43.77.
The effect is dramatically seen in the Kansas City market, which matured into its current four-casino configuration in 1998. Between 2000 and 2006, annual turnstile admissions have been absolutely flat at 24.7 million both years, with only shallow up and down moves in between.
During the same six-year period, however, Kansas City revenues ballooned 35 percent — from $535 million to $705 million this year.
At least some of that increase can be traced to inflation. During roughly the same six-year period, the U.S. Bureau of Economic Analysis reports, Americans’ after-tax personal income has grown 30.8 percent.
That supports CIBC World Markets analyst David Katz, who notes a trend in Missouri and elsewhere of rising casino revenues and flat turnstile growth that suggests consumers have more change jingling in their pockets these days.
“Gaming budgets remained robust in June,” Katz said this week in an advisory to investors. “The increase in spend per admission in Missouri and Indiana suggests that the concerns over tightening consumer budgets could be overdone as it relates to gaming.”
Still, not everyone gambles.
A new Harris Poll reports that 59 percent of Americans did not visit a casino in the past 12 months, and 51 percent said they were not likely to visit one in the coming year.
Those figures are in line with a recent survey for Harrah’s Entertainment Inc. that found that about 35 percent of Americans visited a casino in 2005 — the same as in 2004. And that suggests the casino gambling public may be stabilizing in the neighborhood of 40 percent.
The Harris poll found that only 6 percent of adults who identified themselves as gamblers were among the hard-core regulars who said they gambled 10 times or more a year. That group ranges from the 1 percent or 2 percent who are compulsive gamblers, to the rapidly growing population of baby boomer-retirees.
The poll found that retirees are the nation’s most frequent gamblers, with 29 percent of those who gamble reporting three or more casino visits a year. They were followed by middle-aged baby boomers at 23 percent and “Generation X” at 20 percent.
The Harris poll pegged the Gen X’ers — which it defined as age 30 to 41 — as the nation’s broadest group of gamblers. Only 4 percent who gamble said they had not been in a casino in the past year. Among virtually all other older and younger age groups, that figure was a uniform 14 percent.
Ameristar’s Albrecht had not seen the poll but said he was not ready to concede that Kansas City casinos had maxed out the marketplace. But he said the era of sharp annual growth in admissions was probably over in Missouri unless state lawmakers repeal the state’s $500 loss limit.
Missouri’s unique rule limits casino players to purchasing no more than $500 worth of slot machine credits or table game chips every two hours.
Missouri Lottery
Five $100 million-plus Powerball jackpots and the widespread popularity of $10 Missouri Lottery scratch-off ticket games introduced last fall fueled almost all of fiscal 2006’s 16.5 percent jump in sales.
From that record sum of $915 million, players claimed more than 60 percent in prize winnings, while 27 percent — $260 million — went to public education.
The numbers were not supposed to be that high. Lottery officials for years have been predicting a slowdown in sales as state lawmakers annually chipped away at the agency’s advertising budget, which has gone from $8.2 million in 2002 to $2.1 million in the just-ended fiscal year. This year the ad budget drops to $1.5 million.
State lawmakers argue that lottery products sell themselves at area convenience store check-out counters and that advertising dollars are better spent elsewhere, especially in tight budget times.
Lottery director Larry Jansen still does not buy that argument. He notes that Powerball and scratcher ticket sales command much of the agency’s advertising budget, and also represented 93 percent of this year’s sales growth.
Multistate Powerball was designed to deliver an average four $100 million-plus jackpots a year, but the game had five in fiscal 2006, including two record pots in excess of $300 million that hyped sales.
“Next year the pendulum could swing the other way,” he said. “It’s going to be really difficult to match what we did this year.”
Kansas Lottery
Powerball and several popular new scratcher games also drove record sales of $236.3 million in the Sunflower State.
Powerball sales represented almost one-third of the increase. Most of the rest came from novel “Made in Kansas” scratcher games tied to Kansas themes, and prizes like Chevrolet Malibus manufactured in Kansas City, Kan., along with special military-themed games with proceeds earmarked for Kansas veterans programs.
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