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Nevada gambling is still in recession

by [email protected]
nevada gambling market

The stock market is at record highs, unemployment is at record lows, we are now officially in the longest uninterrupted economic expansion in the history of the United States, and the Nevada gambling market continues to be in the longest recession in its history.

Economic statistics don’t mean much of anything on an individual level or sector level. It’s mostly just a statistic that investors use to guess everyone else’s next moves, and politicians use them to pat themselves on the back and justify taking a bigger share of it all. If you’re making less money this year, you’re in a personal recession regardless of what the aggregates say. If you’re making more but the stuff you buy is getting more expensive even faster, you’re still in recession and how the statistics are doing is irrelevant.

This is the case for the Nevada gambling industry, too. For 11 years now, Nevada has yet to break to new highs in gambling revenue, even as the consumer price index (CPI) has risen by 20% since then.

Over the next three years, gross gaming revenue in Nevada fell by 20.6% overall for the biggest sustained decline since statistics were recorded. Over the next 8 years, revenue has clawed back 17%. At this rate, it’ll be another 4 years until we hit the 2007 highs. My bet is we’re not going to make it back there before the next decline takes hold, and even if we do, adjusted for price inflation we’d have to clip off 20% from 2007 dollars to 2018 dollars. (CPI at the beginning of 2008 was 212.174, compared to 255.155 now). By the time we reach the nominal high in 4 years at the current rate, we’ll probably have to clip off another 10% at least. Like a hamster on a wheel running after a moving target (is that a thing?), full recovery for the Nevada gambling industry looks to be out of reach.

It is no surprise to anyone who understands the damages of currency devaluation. Since 2007, the vast majority of Americans have gotten poorer from a pure individual balance sheet perspective, while the wealthiest 1% have gotten richer.

This is not a new trend. It has been in place since 1971. From 1940 to 1970, income growth in the U.S. for the bottom 90% was over 200% inflation adjusted, and the dollar was still on a gold standard, barely.