The hot streak is over for Colorado’s casinos.
The gambling establishments, blaming a slumping economy and a smoking ban, have posted their worst year since the state introduced them in 1991 to resurrect the ailing economies of three former mining towns.
The casinos‘ total revenue dropped 12 percent to USD 716 million in 2008, the Colorado Division of Gaming reported Wednesday. The only other decline occurred in 2003, when revenue dipped 3 percent because of a crippling blizzard, state officials said.
As the companies and governments of Black Hawk, Central City and Cripple Creek reflect on a miserable 2008, they look forward to the summer of 2009.
Voters in the three towns have allowed the casinos to raise betting limits to USD 100 from USD 5, stay open all day and add craps and roulette. The moves, expected to take effect in July, could deliver a big revenue boost.
Ameristar, which operates a casino in Black Hawk, experienced a 10 percent decline in net revenue in the first nine months of last year, regulatory filings show. For many casinos, conditions deteriorated even further in the final three months of the year.
In December, state casino revenue tumbled nearly 17 percent to USD 48.6 million from a year earlier, the gaming division reported. That figure represents „adjusted gross proceeds,“ or the difference between total wagers and payouts to customers.
Industry observers have debated the impact of the smoking ban. One thing they all agree on is that a recession has hammered the casinos in recent months. High gas prices early in 2008 and a cold snap at the end of the year also contributed to the slump.
The downturn has forced the government of tiny Black Hawk to tighten its belt. Black Hawk recently cut 19 jobs in finance, police, fire and other areas. That is almost 20 percent of the city staff.
The casino companies may find themselves in a difficult spot today, but they have pulled in nearly USD 10 billion in revenue over roughly 17 years, generating a great deal of tax revenue for the state and towns.
And despite the slide, the businesses keep putting more money on the table. Ameristar, for example, is setting the final beam in place this week on its 33-story, 536-room hotel in Black Hawk. The company likes to boast that the resort will become the tallest structure between Denver and Salt Lake City.
Another company, American Gaming, plans a new casino in neighboring Central City, according to local officials.
Central City experienced the steepest drop in 2008, with revenue falling 16 percent, while Black Hawk and Cripple Creek sustained drops of almost 13 percent and 10 percent, respectively, according to the report.
Unlike Black Hawk, Central City has not been forced to carry out significant job cuts, although it has suspended paving projects and historic preservation grants for 2009. Now Central City hopes that the looser rules – made possible by a ballot measure approved by state voters in November – will reverse its fortunes.
Critics had worried about higher stakes, questioning whether they would lead to further expansion and fuel bankruptcies, crime and other problems.
The casinos, which spent more than USD 7 million to promote the ballot measure, and the vast majority of people in the towns disagree.
„It gives us another bite at the apple as far as revitalizing downtown,“ Central City’s new Mayor Ron Slinger, said by phone.