January Continues Recent Declines in Nevada Casino Revenue

Investors have seen the drop in revenue as a harbinger of what is to come, rather than abberation.

Revenues continued in a troubling pattern of decline for Nevada casinos in January, according to the Nevada Gaming Control Board. Casinos across the state took in $1.06 billion in gambling income for the month, a drop of 4.8% from the same month a year ago.

Casinos located on the Strip had gaming revenues totalling $597.3 million for the month, a decline over last January of 1.3%.

Investors have seen the drop in revenue as a harbinger of what is to come, rather than abberation. Stocks in the casino sector have recently plummeted. Las Vegas Sands is trading at slightly higher than 50% of its value per share only six months ago. Boyd Gaming, despite relatively benign numbers, has had its stock drop below $20 a share, by far the lowest in over a year and less than 40% of the stock's peak over $50, back in June and July.

Further worrying investors and analysts are the ongoing multibillion-dollar expansion projects. Credit worries and the withdrawal of financing have put some projects in danger of cancellation, and brought questions to the wisdom of pursuing others, whether it be Las Vegas, Atlantic City, or Macau.

Usually considered recession-proof, the gaming industry is taking a beating in light of the worrisome economic indicators in the U.S. and abroad. Perhaps the real trouble which lies ahead for the world economically is best heralded by the damage being done in a usually-impervious sector.