The North American casino business just doesn’t seem to be able to catch a break lately, with gasoline averaging $3.50 a gallon around the country and reports of it quite likely heading north of $5 a gallon by spring. That type of thing has a direct effect on all the variables; the economy is dependent upon such as cost of transportation, home heating, producing and delivering goods and services, the cost of the food we eat and the creation of jobs. People aren’t thinking of entertainment; just how to get by. The new buzzword I hear bantered about on the talk radio airwaves is “staycation,” meaning vacations without travel. It’s an ugly word that sends shudders through even the most optimistic of casino operators. That type of sentiment could very well squelch any of the optimism that has found its way into the North American economy in recent months.
While we all know better days are ahead of us, it’s still very taxing to the spirit and patience to have to wait this economy out any longer. There are silver linings out there as a result of the 3 to 4 year long economic abyss we’ve been living in.
The difficult economy has acted as a catalyst to the expansion of gaming. Anti-gaming dogma has yielded to the economic necessities of the states. When true recovery comes, it will arrive to many new gaming jurisdictions that might not have existed, hadn’t the pain of recession fostered rational and pragmatic thinking on behalf of state legislators and voters where referendums paved the way. In the coming years, those states that have legalized casino gaming will begin to experience the many benefits responsibly managed and regulated gaming enterprise brings with it, such as jobs, economic expansion, increased tourism and increased tax revenues.
The American public’s appetite for travel, fine dining, luxurious hotel rooms, fabulous shows and gambling flatlined in late 2008. Casino patrons are just ordinary folks who enjoy the entertainment of a casino resort. Since the recession, some have lost their jobs. Some have had their retirement savings evaporate. Some have even lost homes. Many have become frightened watching the folly of the disastrous mishandling of the U.S. economy. Likes have had to take a back seat to necessity. The casino patrons we’ve lost didn’t lose interest in having fun, they were just made wary of spending money, and for good reason. My best guess is that they are just waiting on the sidelines with a lot of pent-up demand. So when the good times do come again, look out. It’s going to be one hell of a party! I don’t think it’s unrealistic to expect to see the North American casino business surpass 2007 revenues in 2013.
And on the down side or the upside, depending on how you want to look at it, 2013 will almost, without question, see a new U.S. administration come into power. Whoever gets elected will have to demonstrate they have growing the economy as their first priority and a solid track record of sound economic thought. Government will shrink, taxes will be lowered and simplified, and regulations eased. When that happens, we’ll experience growth like we did in the mid- to late 1980s. Right now, money is sidelined. Expanding business is just too risky in this political environment.
Peter Mead
Publisher,
Casino Enterprise Management
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