VGM revenues fall, but worst over?
Video gaming tax revenues for first quarter FY11 that ended Sept. 30, totaled $12,338,197, a drop of about 18 percent over the first quarter FY10 and down about 2 percent from last quarter, which totaled about $12.6 million.
Gaming revenues have now suffered declines six quarters in a row: -4.3 percent, -5 percent, -18 percent, -21 percent, -18 percent and now -18 percent again. Those last four quarters coincide with the statewide smoking ban that took effect Oct. 1, 2009.
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However, total revenues have remained between $12.3 and $12.6 million in those four reported quarters since the smoking ban's inception, suggesting that the worse downturn in the 30-year history of regulated gambling in Montana has leveled off (see graph at right).
Gaming industry spokesmen agreed that the bottom likely has been reached (see related story), but unfortunately the licensed gaming business in Montana now must crawl out of a hole that today sits at 2004/5 levels.
“We are hopeful this is a sign that the effects of the economic downturn in Montana has stabilized and that we will see business start to rebound in future quarters,” said Neil Peterson, executive director of the state's Gaming Industry Association.
“The entertainment industry has experienced tough times for the past year due to a number of factors with the economic downturn playing a significant part,” he said. “Just as the economy has impacted our businesses, we also know that the economy is impacting our customers. We appreciate that our customers, just like us, have had to readjust their priorities.”
“We are hoping that economic conditions improve for all Montanans as a strong Montana economy is good for businesses and individuals alike.”
Next quarter's results will be much anticipated. They will show how the gaming industry has fared in the year since the smoking ban went into effect. If second quarter '11 gaming revenues can exceed the second quarter '10 total of $12.4 million, the industry will experience the first year-over-year increase in nearly two years.
Of the state's seven largest counties, Missoula County suffered the toughest quarter when compared to FY10, dropping 21 percent. Lewis and Clark County fared the best, falling about 15 percent.
Other results for larger counties are Silver Bow, down 16 percent, Yellowstone, down 18 percent; Cascade, down 18 percent; Flathead, down 19 percent; and Gallatin, down 19 percent.
In other counties with revenues at least $100,000 in first quarter FY10, faring the best were Custer, which fell 11 percent; Valley, down 15 percent, Mineral, down 16 percent; and Ravalli, down 17 percent.
Among the poorer performers were Big Horn, which fell 31 percent, and Beaverhead and Sanders falling 28 percent.