Troubling trend in Mississippi; Caesars pleads poverty

Evidence of casino saturation in the U.S. (and economic malaise) continues to mount. Following a 6% dropoff in Mississippi casino revenues for July, the Biloxi Sun-Herald‘s Mary Perez was moved to examine a larger trend. Here’s what she found in terms of July winnings at the Bayou State’s Gulf Coast casinos:

2008: $249 million

2009: $225 million

2010: $224 million

2011: $211 million

2012: $205 million

2013: $192 million

That’s a 22% fall if you’re keeping score at home. Yes, the latest numbers can be excused somewhat by a 7% increase in revenue in Louisiana, where the gambling product is getting newer and better. But, in a time of putative economic recovery, the casino industry posts month after depressing month of diminishing returns here, there and elsewhere. Gaming’s much-vaunted elasticity has turned into a droopy waistband. I don’t have any solutions (who does?) but casinos are inarguably fighting over a diminishing pot of money and that scenario shows no signs of abating.

Even if Gary Loveman tried to sell Harrah’s Reno, he’d have trouble finding takers. It’s priced to move: $9 million. Mind you, Washoe County values the property at $16 million, which provoked the unusual spectacle of Caesars Entertainment protesting that its casino-hotel wasn’t worth nearly as much. The kicker is that (according to Caesars), you’d have to sink another $19 million into bringing the place up to date. Such are the consequences of Loveman’s reign of malign neglect. The chances of anyone ponying up essentially $28 million for a tired casino in a challenged market look pretty darn slim … although Tilman Fertitta always likes a challenge. Maybe Loveman should give him a call, make an offer Tilman can’t refuse.