Although many companies have seen a serious uptick in their revenues from recent years, many of the budget resorts, locals casinos, and smalltime resorts have been struggling mightily during the third quarter of 2012. The third-quarter financials have come in, and show continued difficulties for two of the three main casino sectors. Most of the high-end and top resorts have seen the profits of the third-quarter rise when compared to profits over previous quarters. However, some of the smaller locations have struggled mightily to increase their revenue in the same way that some of their larger counterparts have.
Does properties that are working on a budget on the strip, faced an uphill battle attempting to get customers that are still recovering from a dangerous recession, to agree to spend money at some of the smaller casinos. It is thought that some of the larger casinos were able to profit by bringing individuals in from around the country who are looking to vacation in the area. However, many of the large casinos were not as frequented by locals throughout Nevada, which is where some of the smaller resorts and casinos were able to win their business. With many of the locals still weary about the recession, some of the smaller resorts have underperformed during the third quarter of this year.
The unemployment and foreclosure rates remain elevated in Nevada, when compared to the rest of the nation. This means that individuals from around the United States are much more likely to visit the larger casinos, then locals are to visit some of the smaller casinos throughout the Nevada area. The luxury resorts turned in a good performance, with both Wynn Resorts and the Las Vegas Sands handing out strong numbers overall.
Other companies, such as Station Casinos, have reported good numbers as well with a revenue of $295.7 million during the third quarter, which was up 4.7% over the previous year. The company reported a net profit of $11.2 million, which was also well. These numbers were a bit inflated, and were likely due to a number of small, one-time transactions that are not likely to be reflected during next year’s report.
Local smalltime company Cannery Casino Resorts reported that its to properties fell almost $2 million you over the previous year. The overall revenue of both properties fell a total of 4.4%, with a net revenue decline from $145.9 million, down to $138.8 million. This has raised concerns about the local market moving forward, and whether or not individuals throughout Nevada are ever going to begin gambling enough to support the number of casinos that the state currently has open for individuals in the local area.
“We remain wary of the locals market recovery,” Deutsche Bank analyst Andrew Zarnett wrote in a report on Station’s earnings, shortly after the numbers were made publicly available. “We continue to believe the locals market will continue to experience a period of slower growth through 2013 as consumer spending moderates and comparisons (to previous periods) get more difficult.”