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Best of Howard Stutz

Gaming Guru

Howard Stutz
 

Nevada gaming revenues decline 6 percent in June; Strip down 4.5 percent

10 August 2012

LAS VEGAS -- For one month, Northern Nevada has bragging rights.

Casinos in Washoe County and Reno combined for large single-month gaming revenue increases during June as Clark County and Strip figures fell.

Results in the north weren't enough to push the month into the positive column. Gaming revenues statewide fell 6 percent during June, the state's second straight monthly decline and third time in four months the numbers were down.

According to figures released Thursday by the Gaming Control Board, Nevada casinos collected $832.5 million from gamblers in June, compared with $885.8 million collected in June 2011.

Washoe County's casinos had a 7 percent increase in gaming revenues, which were helped by several special events and a hold percentage that favored the house. Reno casinos recorded a 9.4 percent increase.

But Washoe's $66.8 million gaming revenue total was just 8 percent of the state's overall number.

Casinos in Clark County, which accounted for 85 percent of the state's gaming revenues in June, dragged down the state total. Gaming revenues in Clark County declined 7.9 percent to $707.3 million, including a 4.5 percent drop on the Strip and double-digit declines in four reporting areas. The Strip's poor month - $483.7 million in June, compared with $506.7 million in the same month a year ago - wasn't a surprise after depressed second-quarter earnings by Strip operators.

Baccarat revenues on the Strip fell almost 4 percent, to $103 million. The amount wagered rose 21.1 percent to $829.4 million, while the hold percentage was 12.1 percent. In June 2011, baccarat revenues rose 478 percent while casinos held 15.6 percent of the amount wagered.

The Strip results also reflect two vastly different events in June.

The Pacquiao-Bradley championship fight weekend at the MGM Grand helped fuel baccarat play. The 300,000 visitors attracted over three days of the Electronic Daisy Carnival, however, likely drove down gaming revenues because that event's prime demographic wasn't a typical casino customer.

"The strong baccarat play levels indicate that Asian high-rollers are still coming to the Strip, particularly when Manny Pacquiao is in town," Union Gaming Group managing director Bill Lerner told investors. "The mass market tables games play also showed growth in gaming play levels with divergent trends among craps, blackjack, and roulette."

In the second quarter of 2011, Strip gaming revenues rose 16.1 over the same three months of 2010. The 2012 second quarter Strip gaming revenues declined 6.4 percent from 2011.

"We knew going in this was going to be a very tough comparison," said Control Board senior research analyst Michael Lawton.

Through June, gaming revenues are down 0.1 percent statewide and 0.6 percent on the Strip.

One positive sign in June: The amount wagered by gamblers statewide during the month was $11.2 billion, a 3 percent increase over the same month last year.

"We were encouraged by the increase in Strip betting volumes, particularly when taking into account that it occurred during a traditionally seasonally soft summer month," Stifel Nicolaus Capital Markets gaming analyst Steven Wieczynski told investors. "Looking ahead, we believe the gradual return of North American rated play, coupled with continued strength in high-end international baccarat sourcing, should help accelerate the Strip operator recovery."

Double-digit declines were recorded in North Las Vegas (down 26 percent), the Boulder Strip (down 22.8 percent), Laughlin (down 20.3 percent) and downtown (down 12.7 percent).

In other markets of Northern Nevada, revenues increased significantly. North Lake Tahoe's gaming market increased 29.3 percent in June, the highest increase anywhere in the state, but gaming revenues exceeded just $2.4 million. South Lake Tahoe casinos experienced a 17.2 percent revenue increase.

Gaming tax collections in July, based on gaming revenues generated in June, fell almost 27.5 percent, to $38.3 million.