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Gaming Guru

Chris Jones
 

Nevada Economy: State Gaming Win Up in January

12 March 2004

January's improved statewide casino winnings underscored a long-held canon of the gaming industry: Never underestimate the power of a high roller.

Nevada casinos claimed more than $882 million in revenue during the first month of 2004, up 4.4 percent compared with the $844.6 million reported for the same period a year ago, the state Gaming Control Board said Thursday.

Despite the Jan. 9 shutdown of downtown Las Vegas' Binion's Horseshoe and the subsequent closure of the nearby Castaways on Jan. 29, Control Board Statistical Analyst Frank Streshley said Thursday it was strong baccarat play that pushed the month's gaming win ahead of last year's pace.

The state's 349 casinos in January benefited from a calendar change that placed this year's Chinese New Year celebration in January, a month earlier than in 2003. Coupled with casino-sponsored Super Bowl parties and related events in the days leading up to the Feb. 1 football championship in Houston, Streshley said Nevada casinos parlayed the popularity of those attractions to bring plenty of big-time bettors to the tables.

"If you exclude baccarat revenue from this year and last year to look at how the rest of the games and slots did, the state would have actually been down 0.1 percent," Streshley said in reference to many high-rollers' game of choice.

The state's 23 casinos offering baccarat -- 19 of which are in Clark County -- reported $68.2 million in baccarat winnings, a 128.5 percent improvement from the same month in 2003. That came despite an 8 percentage point decline in hold percentage compared with the previous January, which meant casinos were less lucky this January but still benefited from a stronger volume of play.

In a research note issued Thursday, Merrill Lynch gaming analyst David Anders wrote nearly all of the state's baccarat play took place in Las Vegas, a factor he said suggested strong high-end demand for the city.

The Feb. 1 Super Bowl resulted in a nearly 65 percent decline in statewide sports book winnings compared with 2003, when that year's game was played Jan. 26 in nearby San Diego. Streshley said most sports books record their wagers on the day a contest occurs, a factor that would move this year's reported record $12.4 million Super Bowl win to February's statewide ledger.

Thanks to the calendar flip-flops involving both Chinese New Year and the Super Bowl, Streshley said the most accurate measure of the gaming industry's early-year health won't come until next month when a two-month comparison of January and February numbers can take place.

Until then "we're comparing apples to oranges with the shift in calendar," he said.

January's closure of Binion's Horseshoe and the Castaways contributed to a 10.4 percent dip in downtown gaming, the control board said. Casino winnings in the area topped $54.3 million for the month, down from $60.6 million a year ago.

Because the Castaways closed so late in the month, its loss should have a more-significant effect on February's ledger, Streshley added.

Overall, Clark County's January gaming was nearly $747.7 million, up 6.27 percent from a year ago. Strip casinos reported $482.5 million in winnings, up 12.3 percent from the previous year's $429.6 million total.

Since July and the start of the state's fiscal year, the statewide gaming win has totaled more than $5.71 billion, the control board said.

In a statement, Gov. Kenny Guinn described the month's performance as "solid" but added he's concerned that statewide gaming win has improved by just 1.76 percent during the current fiscal year.

"The good news is that sales tax activity is ahead of projections, but does not completely offset" a nearly $2 million shortfall in forecasted gaming fee totals, Guinn wrote. "I will be closely monitoring collections during the final four months of the fiscal year in order to assess their impacts on the overall revenue forecast upon which the budget was built."