The city of Las Vegas was able to write off less uncollected gambling debts this year than in the past ten years.
Gambling is a fun past time that takes place across the globe. In the United States, Las Vegas is a popular spot for players to be able to try their luck at blackjack, roulette, slots and many other gambling games. For most gamblers, a certain amount of cash is set aside for gambling entertainment. Once that money is gone, the player finds something else to do or gets ready to go back to the hotel. However, for others, running out of money means asking for credit from the casino and this can sometimes get the casino as well as the gambler in trouble.
Casinos in Las Vegas offer lines of credit for individuals who want to borrow money for gambling. This is a common practice but one that can affect both the individual and the casino. If the gambler loses the money without earning a win, then they must pay it back to the gambling venue. Sometimes, these lines of credit are not paid back which means the casino experiences a loss.
In Las Vegas, uncollected gambling debts occur each and every year. For 2016, the casino industry of Sin City was able to write off less uncollected debt than years gone by, actually less than the past ten years.
Looking at the Numbers
A report was filed last month by David Schwartz which covers the credit that was issued by casinos in Nevada using information provided by the Nevada Gaming Abstract. Information was reviewed as far back as 1980 by Schwartz, who works at the University of Nevada Las Vegas Center for Gaming Research to see how the numbers add up.
Casinos in Nevada do not provide direct access to the full information of credit activity but a category of casino expenses found in the Abstract shows bad debt provisions. This information, according to Schwartz, provides insight as to how the casinos are working to manager their risk when providing lines of credit.
Casinos on the Las Vegas Strip reportedly wrote off almost $110.2 million in bad debts for the fiscal year of 2016. This seems like a large amount but this is actually the lowest amount seen by the Strip in the last decade. The 1990s were actually really bad years when it came to uncollected debts.
A Look Back
According to Schwartz’s report, there were years when the debt write offs were minimal and times when the debt had amassed large numbers. In 2014, the bad debt totaled $79 million which was the lowest number seen since 2005 when the area experienced just over $46 million in losses. 2009 was a really bad year for bad debt write offs as the city experienced $178 million in losses.
The figure from 2009 is a simple indicator as to how bad the global economy was at that time. Because the economy was bad, the casino industry suffered immensely. Bad debt figures seemed to increase during an economic downturn, according to Schwartz research.
The largest loss in recent years took place in 2000 when the casinos of Las Vegas saw close to $231 million in uncollected debts. This amount was a big blow to the area as the credit was given but not repaid.
It seems within the past few years that collectively the gambling industry is seeing a turn around. Casinos are seeing more visitors and money is being spent yet again on the gaming floor as well as in the dining, entertainment and hotel stays in major gambling areas of the US.