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Times are hard – but it’s about time so-called ‘experts’ took the gaming industry seriously, says Sharon Harris
Happy New Year! Wow… another year gone by. Where does the time go? I attended the November G2E show in Las Vegas, and happily saw business being done, orders being written and old friends on the job. Show organizers, the American Gaming Association and Reed Exhibitions, reported an attendance of 26,500 professionals from 89 countries – a 12% drop from 2007. A record 335,480 square feet of space housed 724 exhibitors, including 117 from countries outside the US.
It was around the city that I sensed the tough economy. Even the “recession-resistant” gaming industry is facing crushing financial realities.
When I arrived on Monday at 6:30pm – hardly the middle of the night – the airport quiet was palpable, with light customer traffic at security, the baggage claim and the car rental center. I had the same impression in town throughout the week, reflecting a steady slide in revenues.
Not surprisingly, the Las Vegas statistics proved what I witnessed. The October 2008 figures were the largest monthly drop – 22.3% – in Nevada history. Ironically, the October 2007 data reported the largest monthly win in state history.
Like much of Nevada, Las Vegas is a prisoner of the airplane or auto gas tank. Although oil prices have plunged since summer, people are reluctant to spend to travel to Las Vegas. Those giant luxury hotels are built for tourists. Also, the Nevada home foreclosure rate is about the worst in the US, with more people leaving and fewer moving in to work.
This situation is not limited to Nevada. This pivotal year affected politics, plus gaming’s economic situation. 2008 began far better than how it ended.
Obviously, the biggest news is the November election of Barack Obama as the next American president. While much of the US and the world appear to be ecstatic, I guess I’ve been around or involved in the political process through business too long to swoon. In my world, I award accolades once promises are actually fulfilled. I am willing to let bridges or roads be renamed and holidays declared only after the achievements.
Truthfully, my original candidate did not make it to the final two. So, like dozens of people I know, my enthusiasm was somewhat muted as I made my choice in the voting booth. For the good of my country, I hope that Obama succeeds.
His challenges will be massive as the US faces unprecedented obstacles. Before the election, one political commentator said that when it was over, the “winner” may actually envy the “loser”.
We will have a complete rundown of how an Obama administration may impact the gaming industry in our February issue. It will address the political, legal, Native American, financial and labor issues as they affect gaming.
I recently watched a cable news panel of political pundits whose conversations during the campaign clearly demonstrated they knew virtually nothing. Why do these shows always utilize “expert” managers and strategists who have worked for losing campaigns?
They were discussing the possible collapse of the three big American auto makers – General Motors, Ford and Chrysler and its potential consequences. One commentator lamented that while cutbacks and layoffs at either a television network or a casino may be tough, the three million directly and indirectly affected by the fall of the auto industry will devastate the American economy.
Where has this guy been? The latest data from the American Gaming Association (AGA) states there are almost 361,000 employees working for commercial casino properties. That figure does not include Indian gaming and other peripheral gaming enterprises, which add tens of thousands more.
However, that is only part of the picture. Thousands of tangential jobs depend on a thriving gaming industry. These include state and federal regulators, enforcement personnel and technicians, the gaming equipment manufacturers, thousands of large and small business suppliers, professional accountants and attorneys, construction workers and designers, research and development teams, etc. The list goes on and on, but I suspect it comes very close to the statistics of those affected auto workers.
If those Washington power brokers – many lacking management backgrounds or experience in meeting a payroll – view gaming as a dispensable industry, then gaming will suffer. We must better educate the public. While gaming is not a necessity like driving a safe vehicle, its proliferation since 1978 ranks it as important as other giant industries. Many municipalities and tribal lands depend on gaming for their livelihoods.
We have our work cut out for us in 2009, but I believe the industry is up to the task.
