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Best of Howard Stutz

Gaming Guru

Howard Stutz
 

Nevada gaming revenue declines for second straight month

29 October 2014

LAS VEGAS -- Nevada’s casino industry suffered its second straight monthly gaming revenue decline in September with much of the blame leveled at an unlucky run by the Strip’s high-end baccarat rooms and a fortunate month for blackjack players.

Statewide, gaming revenue fell almost 6 percent in the month. Strip gaming revenue was off more than 12 percent.

The declines left Nevada casino revenue down less than 1 percent statewide compared to the first nine months of 2013. Strip casinos are up by just under 1 percent for the same time period.

The statewide and Strip declines in August and September followed five straight monthly increases, according to numbers released Tuesday by the Nevada State Gaming Control Board.

“The tough couple of months pushed back all the gains,” said Control Board Senior Research Analyst Michael Lawton.

In Nevada, casinos collected $901.7 million in gaming revenue in September, compared with $958.9 million in the same month a year ago. On the Strip, gaming revenue was $494.8 million, compared with $563.1 million in September 2013.

Baccarat revenue on the Strip declined 29.6 percent to $81.3 million, compared to the same month last year, which was a 50 percent increase in revenue over 2012. Gamblers wagered $643.3 million on baccarat, which was down 12.5 percent. The hold percentage of 12.64 percent was down from the 15.72 percent casinos held on all baccarat wagers in September 2013

“The baccarat comparison was too much to overcome,” said Deutsche Bank gaming analyst Carlo Santarelli.

Blackjack also wasn’t favorable to Strip casinos in September.

Revenue from the game fell 27.3 percent while volume was down 15.5 percent.

There were some bright spots.

Slot machine revenue was down 3.8 percent in September, but the amount wagered on the game grew 2.3 percent, a fifth consecutive month on increased wagering.

“We view slot (volume) as the most relevant indicator of the Strip’s overall health, as trends within the segment are predominantly driven by retail and casual mass-market players,” said Stifel Nicolaus Capital Markets gaming analyst Steven Wieczynski.

Revenue from sports wagering in Nevada was $44.6 million, an increase of 12.2 percent in September. The figure was the fourth highest single-month revenue total from sports wagering in Nevada history. The amount wagered on sports in September — $450.9 million — was an increase of 2.4 percent from a year ago and the highest figure ever recorded for the month.

Lawton credited the increase in mobile sports wagering applications and the new types of betting options offered by race and sports books with growing the gaming segment.

Meanwhile, the state’s three Internet poker websites reported gaming revenue of $693,000, a decline of 8.9 percent from a year ago. The figure was the lowest single-month total reported since the state began releasing online numbers this year.

Despite the declines in August and September, most analysts still see positive signs in the Las Vegas economic recovery.

Wells Fargo Securities gaming analyst Cameron McKnight said the non-gaming spending outlook by Strip visitors “remains positive.” He said higher revenue per available room spending — a non-traditional figure used by Wall Street — is on the rise, along with increased airline passenger counts into Las Vegas.

Downtown Las Vegas was the only other reporting area in Clark County to see gaming revenue fall in September.

Casinos along the Boulder Strip, which includes Henderson, reported a 14 percent gaming revenue increase. Clark County as a whole saw a 6.8 percent decline.

Nevada collected $65.8 million in gaming taxes during October, based on September’s gaming revenue, a 4.5 percent increase from a year ago. For the first months of the fiscal year, gaming tax collections are up 1.9 percent.