he unemployment rate in Nevada was 13.6 % in February compared with the latest national unemployment rate of 8.8 %. Over the last three years, much of the local economic downturn can be tied to the gambling industry, which has seen sharply declining revenues.
The question must arise: just how much more can these gaming stocks rise without Las Vegas -- or the United States for that matter -- showing significant improvement in employment rates? The Bedford Report examines the outlook for companies in the Resorts and Casinos Industry and provides research reports on MGM Resorts International and Melco Crown Entertainment.
Last week Nevada's Gaming Control Board said that Las Vegas Strip gambling revenue fell 9.6 % in February, the fourth straight monthly decline as the city faces an uneven recovery after a record slump in the casino industry. The board added that revenue for all casinos in Nevada fell 6.8 % to $881.8 million in February, the board said.
Interestingly, studies from The Center for Business and Economic Research, a University of Nevada think tank, claim that Las Vegas is actually rebounding because of an increase in tourism. According to reports from the think tank, 3.1 million people visited Las Vegas in January, an 8.3 % jump from the month before.
Back in 2006 the tiny island of Macau surpassed the Las Vegas Strip as the world's gambling core after the government allowed overseas casino operators to enter the region. Revenues in Macau continue to surge, hitting record numbers in March. Strong demand from mainland China lifted Macau revenues to US$ 2.5 billion last month.
One hundred percent of Melco Crown's revenue is derived from Macau. The holding company operates the Mocha Club and Crown Macau gaming interests in Macau and is developing the City of Dreams casino and resort complex.