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Best of Howard Stutz

Gaming Guru

Howard Stutz
 

Control Board Report: State Casino Win Sets Record

12 December 2005

For the second time this year, Nevada casinos set a record for the most money ever won from customers in a single month, perplexing gaming analysts but fueling their bullish outlook on the Las Vegas economy.

Nevada casinos collected $1.06 billion from gamblers in October, according to totals released Friday by the State Gaming Control Board.

It was the fourth time in 2005 that the state's monthly casino win topped $1 billion. October's win was a 14.4 percent increase from the $925.3 million earned last October by casinos statewide.

The number also eclipsed the previous record of $1.03 billion won by casinos in March.

"It was the 15th straight month of positive earnings across the board," said Frank Streshley, senior research analyst for the Gaming Control Board. "You assume that March, May and January are going to be record months because of strong visitation and convention attendance, but not October."

Bear Stearns gaming analyst Joe Greff pointed out that October had nine weekend days, compared with 10 in 2004, calling the double-digit increase "impressive."

The gaming win was based on a record $2.8 billion wagered on table games statewide and a record $11.8 billion bet on slot machines during the month.

Strip casinos once again fueled the state's economic engine, winning $884.1 million from customers in October, a 15.2 percent increase compared with $767.2 million a year ago and a record for boulevard's casinos.

Wynn Las Vegas and hotel expansions at Bellagio and Caesars Palace were not open a year ago and added to the October customer mix. Streshley said two sold-out concerts at the MGM Grand helped bring crowds to the Strip.

"October doesn't have the convention traffic or the special events, such as Chinese New Year or the Super Bowl, that you see in the first part of the year," Streshley said. "So that's why it was an unusual month."

Streshley said that even with high gasoline prices, there was no apparent slowdown in drive-in traffic from California and other states.

Deutsche Bank gaming analyst Marc Falcone cited increases in baccarat and an unusually large 65 percent jump in win at Strip sports books, as other gaming win drivers on the Strip.

The gaming analyst said the trend could persist through the end of the year.

"We remain encouraged by strong volume trends across the Las Vegas Strip which have now continued into fourth quarter," Falcone said.

Casinos in Clark County outside of the Strip also reported gaming win increases.

Downtown Las Vegas had its first positive total in seven months, winning $60.7 million in October, a jump of 4.8 percent compared with $57.9 million a year ago.

Streshley said the takeover of the Golden Nugget by Landry's Restaurants may have sparked some interest in downtown visitation.

Overall, the Las Vegas locals market -- which includes casinos in North Las Vegas, on the Boulder Highway, and Henderson -- collectively won $197.2 million from gamblers, a 27.4 percent increase compared with $154.8 million a year ago.

Streshley said the timing of Nevada's tax rebate program, where $272 million was returned to state residents, may have been one reason casinos catering to local customers had large gaming win increases.

The rebate checks, which arrived in mailboxes during the first week of October and are growing to nearly $300 million with additional checks being mailed this month, were sought by Gov. Kenny Guinn and approved by the 2005 Legislature.

"Statewide, in markets that have strong local customer play, the gaming win was up," Streshley said.

"That's both in the north and the south, so we assume the rebate checks getting in the hands of consumers may have had something to do with this," he added.

Casino operators were hesitant to comment on whether or not the rebate checks found their way into casino cages, mainly because October falls under most company fourth-quarter earnings, which won't be discussed publicly until after January.

"I can't comment on the fourth quarter, but I'm sure there is some element to that," said Boyd Gaming spokesman Rob Stillwell. "But I don't know if I would attribute the entire increase to (the rebate checks)."

Station Casinos Chief Financial Officer Glenn Christenson said gaming companies account for their revenues over a three-month period rather than a month to month basis.

"It's really tough to quantify if the rebate checks played a significant role in October," Christenson said.

Laughlin was the only casino market to have a decrease, with casinos winning $50.1 million in October, down just under 0.2 percent compared with $50.2 million a year ago.

Washoe County, encompassing Reno, had its fifth consecutive positive month, winning $95.4 million for a 3.5 percent gain compared with $92.2 million a year ago.