Flat Revenues And Tough Competition: The Tricky Hand Colorado Casinos Are Dealt
Colorado's casinos are playing the hand they’re dealt, but it's not a great one.
Through September, casinos brought in just $638 million in slot and table game proceeds. It sounds like a lot, but it equates to a 2018 revenue growth rate of 2.1 percent — one casino executive said that was “ho hum.”
It’s not the growth casinos expect in a state with such a fiery economy. David Farahi, chief operating officer at Monarch Casino and Hotel, lamented that “gaming revenue growth is certainly not keeping up with [Colorado’s] population and GDP growth.”
In the last fiscal year, Colorado casinos collected $125 million in tax revenue. The taxes pay for a variety of statewide initiatives, including historic preservation.
The drag on growth can partially be attributed to Sin City. It still frustrates the industry that Denver continues to be one of the largest feeder markets for Las Vegas.
“There are hundreds of millions of dollars from people in Colorado going to gamble outside the state of Colorado,” Farahi said. “And those gaming tax revenues are also going out of the state.”
So, to increase taxes and revenue, Colorado casinos are investing in themselves. One impediment to growth is a lack of hotel rooms, so in Blackhawk, Farahi is building a 500-room casino that will open the first phase in spring of 2019. Monarch isn’t alone. Tens of millions of dollars has poured into other casinos as they try to improve the customer experience.
But another challenge is image.
Many people in Colorado don’t know there are mini Vegas-style casinos in Blackhawk, Central City and Cripple Creek. Those that do know haven’t visited in so long that the cities might be unrecognizable to them. That’s despite years of aggressive advertising on billboards and commercials.
Farahi and others, however, are confident that as the improvements are finished, the customers will come. He’s less sure about the workers he’ll need to run the casino. As Farahi’s expansion gets closer to opening, he’s concerned there won’t be anyone to fill the positions.
“Today, as we sit in Blackhawk, there are hundreds, literally hundreds of hospitality jobs available between all the different casinos, and all of us, up here in the mountains are looking for talent and team members, and it's a struggle frankly,” Farahi said.
Colorado is at “full employment” and many employers, not just casinos or hotels, have said that employable talent is their chief concern. They are upping wages in response. Farahi said it will get even harder when the massive Gaylord Rockies Resort and Conference Center in Aurora opens in December. A job fair in November advertised 1,200 hospitality positions for the new resort.
That means the workers win, since casinos will have to up the ante in terms of wages and benefits to attract new employees.
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