Gaming revenues fall again
By Paul Tash
Montana Tavern Times
Business folks who depend on gaming revenues for their livelihood have been looking desperately for signs that a recovery is coming. They will have to keep looking.
Video gaming tax revenues for second quarter of Fiscal Year 2011 that ended Dec. 31, 2010, dropped to $12,143,000, down about 2.3 percent from one year ago ($12,430,000), according to preliminary numbers provided by the Gambling Control Division. Last quarter was also down about 1.6 percent from first quarter FY11 totals of about $12,344,000.
The decline marks the seventh consecutive quarter that revenues have fallen year-over-year. (Note: Year-over-year is the term used to compare the current quarter with the same quarter in the previous fiscal year. Quarter-over-quarter is the term used to compare a quarter's results to those in the preceding quarter.)
“It's a struggle,” said Bill Stedman, of American Music Co., one of the state's largest gaming machine vendors.
He said for all his accounts, about 5 percent are up, about 5 percent are in bankruptcy, and the rest are down about 20 percent from two years ago.
“It's particularly tough on those folks who just entered the business within the past three or four years who have a bank payment to make,” he said.
Stedman said he's pulled at least 100 machines off his routes, trying to match the lower play in some places, in an effort to be more efficient. And, he said, “Even the ones who are surviving don't have money to buy new equipment, and that has a dangerous trickle-down effect to the manufactures and vendors.”
A few casinos have been sold, but no one's in a hurry to spend money, he said.
“They have plans to do so – they're just looking for some positive economic signs.”
Blaine Bowman of Spielo Gaming said he's “not surprised by the new numbers.”
“Nothing has changed to improve the situation,” he said. “The economy is still a big problem, discretionary income continues to be uncertain, and the non-smokers who were going to flock to the establishments when the smoking ban was implemented never materialized.”
Bowman added he expects revenues to remain flat for the immediate future.
“People need to feel better about their personal economic situation before revenues will significantly improve,” he said. “I think many of the same forces are at play with other segments of the economy that are also suffering. For all parties involved I wish the news were better.”
Of the state's largest counties, Silver Bow suffered the greatest decline year-over-year, with revenues down 11.4 percent to $700,000 from the previous year of $789,700. Lewis and Clark County survived the best, declining only 1.1 percent, from $905,800 to $895,600.
Cascade County fell 2.3 percent, from $1,304,500 to $1,274,800; Flathead dropped 5.3 percent, from $1,059,900 to $1,003,600; Gallatin declined 1.8 percent, from $725,500 to $712,200; Missoula County dropped 5.6 percent, from $1,257,700 to $1,187,000; and Yellowstone dropped 1.6 percent, from $2,428,800 to $2,389,200.
Examining cities specifically, Columbia Falls actually improved year-over-year second quarter, enjoying a 26.3 percent gain, from $106,208 to $134,100. But that city's gaming revenues were down 10 percent from the first quarter of this fiscal year.
Miles City also performed well year-over-year last quarter, gaining 23 percent from $195,900 to $236,000. It also enjoyed a 12 percent gain from the previous quarter (the largest quarter-over-quarter gain of any city).
Kalispell gained 11.3 percent year-over-year ($494,000 to $548,900), but suffered a 10 percent drop from the previous quarter. Its neighbor to the north, Whitefish, suffered a $13.1 percent drop year-over-year, as well as an 18 percent drop from the previous quarter (the largest quarter-over-quarter decline of any city).
Missoula fell 10.6 percent, from $1,062,700 to $950,400 year-over-year, but enjoyed a gain of about 4 percent from the previous quarter. Billings actually has been quite steady, showing a 1.4 percent gain year-over-year ($2,105,200 to $2,135,000) and a 2 percent gain from the previous quarter.