Will oil price drop revive the U.S. casinos and gambling revenue?

Will oil price drop revive the U.S. casinos and gambling revenue? It's summertime, the hottest season for gambling tourism, but the U.S. casinos country-wide are feeling the customers' finance pinch. The casinos in the country, especially those on the Las Vegas Strip and in Atlantic City, consider the summer period their bread and butter, but the record oil prices took the blame this year for the ever declining gambling revenue throughout the U.S. gambling establishments. Most recently, the Las Vegas casinos alone reported a 16.4% revenue decline in May, compared to the same month last year, while statewide the drop in gambling revenue increased to 15.2%. The combined gambling revenue at the Atlantic City casinos also fell, the gambling venues in A.C. dropped down 11% in June, compared to the same month an year ago.

When asked for explanation, most casino managers cite the soaring gas prices as the major factor in the gambling revenue decline. But good news may be just around the corner. On Friday the price of U.S. crude oil dropped down to 7-week low, closing at $123.26. Of course the price on Friday was far away from what investors paid an year ago, but compared to the $147 on July 11th, a price break of almost $25 per barrel is certain to be felt by the consumers in the coming days. If the oil prices continue their downward trend, the casinos in the United States may have enough time to recover at least a small part of the summer season. But keep in mind that although the national average price for regular unleaded is at $3.97, down from $4.06 a month ago, it still has a long way ahead to match the $2.90 we paid at the pump an year ago. We can only wait for the July and August gambling revenue numbers.

Published on 07/27/2008