Black Gaming, which operates 3 casinos in Mesquite, Nevada, has declared bankruptcy. From the LVRJ:
In statements last year, Black said the company was generating cash flow but was unable to manage its high amount of debt. Black, a longtime Las Vegas real estate developer, said the challenging economy of the past 24 months hurt the casino operator.
via MESQUITE CASINOS: Black Gaming LLC files bankruptcy – Business – ReviewJournal.com.
How bad are things in Mesquite? Pretty bad.
In 2007, the four casinos there made almost $167 million. Last year, there were only three casinos active, and they made just over $120 million. That’s about a 28% drop in business for the area over two years. Even without the added debt expense, that’s a tough nut to crack.
For reference, in 2007 (before things went south), the Balance of Clark County casinos, which include Mesquite, had an average overall income of 3.8% of revenues. That’s not as good as the Strip casinos, but it’s still an indicator of a profitable business. In 2009, casinos in that reporting area showed a net loss of 53.9% of all revenue–clearly an epic fail. Of course, these aren’t just Mesquite (Primm is another area included here), but this is clearly not the best time to be running a casino outside of the tourist corridor.
Although, to be fair, Strip casinos were also unprofitable in 2009, with a combined net loss of 30.2% of revenue. About $3 billion of the $4 billion loss was due to interest and depreciation expenses. It’s hard to see how these sorts of losses can be sustained for much longer without more bankruptcies coming, even in Las Vegas.