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Best of Howard Stutz

Gaming Guru

Howard Stutz
 

Nevada gaming revenues increase 1.8 percent in October; Strip up 3.6 percent

10 December 2012

LAS VEGAS -- Going into October, analysts figured casinos statewide would have a tough time matching the gaming revenue results from a year ago.

In October 2011, baccarat totals broke all monthly records with revenues increasing 74.3 percent, sending the state to an 8 percent overall revenue increase.

"We were pretty much up against a very strong month," Gaming Control Board Senior Research Analyst Michael Lawton said Friday.

So imagine everyone's surprise when state gaming revenues grew a modest 1.8 percent in October, the state's second straight monthly increase.

Casinos statewide collected $978.8 million from customers in October, figures the control board released Friday show. A year ago, casinos collected $960.7 million.

Strip casinos collected $580.7 million in October, an increase of 3.6 percent compared with $560.3 million in the same month of 2011.

"We continue to believe Las Vegas is in a gradual recovery despite this year's unpredictable results," Wells Fargo Securities gaming analyst Dennis Farrell Jr. told investors.

"Volatility is likely going to continue for the rest of the year as cautiously optimistic management commentary encounters challenging gaming comparisons," Farrell added.

Although it wasn't the record-setting figures of a year ago, baccarat still produced solid results, Lawton said.

Casinos collected $129.5 million from the game, which was down 18.2 percent from a year ago. The amount wagered increased 4.9 percent to $883.8 million.

The difference was in the hold percentage. A year ago, casinos collected 18.8 percent of all wagers on baccarat; this year the hold percentage was 14.65 percent.

Roulette play, however, made up for baccarat.

Casinos collected $50.8 million from the game, which was 174.2 percent more than a year ago. The win percentage on roulette was 22.8 percent.

Lawton said the revenue figure from roulette was the highest single month total ever, breaking the previous record of $33.3 million collected in December 2007.

Stifel Nicolaus Capital Markets gaming analyst Steven Wieczynski said the lower baccarat hold had the largest effect on the overall numbers.

"After sorting through all of the noise, we found October's Strip results to be essentially in line with our expectations," Wieczynski said.

Lawton credited Madonna, who performed at the MGM Grand on Oct. 12 and Oct. 13, and baccarat tournaments with helping Strip results.

Following a stellar September, sports wagering fell 88 percent in September, largely because of a $6.2 million loss from football betting.

"While we would have liked to see more of an acceleration in gaming revenues in October, we think the results were fine given the negative calendar and the large sports book decline," Macquarie Securities gaming analyst Chad Beynon said. "We are heading into the busier convention and event season, so we expect November and December to finish the year stronger."

For the first 10 months of 2012, statewide gaming revenue totals are up 1.9 percent compared with the same time frame in 2011. On the Strip, gaming revenues are up 2.6 percent for the calendar year.

Clark County gaming revenues on a whole were up 2.8 percent in October with just three reporting areas, Laughlin, Mesquite and the balance of the county, reporting monthly gaming revenue declines.

Gaming revenues in Washoe County, which includes Reno, fell 7 percent in October.

Statewide results in October followed September's 3.3 percent gaming revenue increase.

The uptick didn't translate into increased gaming tax collections. The state collected $54.5 million in gaming taxes during November, based on the October revenue figures, which was a nearly 17 percent decline from the same period a year ago.

For the first five months of the fiscal year, gaming revenue collections are up 6 percent.