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Best of Howard Stutz

Gaming Guru

Howard Stutz

Casino revenue: Casinos not raking it in as readily

13 August 2007

NEVADA -- If the first half of the year is any indication, the revenue growth by Nevada's major casinos in 2007 won't match the increase in gaming win recorded in previous years.

Nevada casinos won $6.385 billion from gamblers through June, 2.1 percent more than they won during the first half of 2006, according to a report released Friday by the Gaming Control Board. In the first six months of 2006, Nevada casinos saw their revenues grow by more than 9 percent over the first half of 2005.

"What were seeing in the first half of the calendar year is that things have really slowed down, definitely on the slot side," said Frank Streshley, the control board's senior research analyst. "I think we'll see this trend continue over the next six months as well."

Nevada casinos won $12.62 billion for all of 2006, 8.3 percent more than 2005, when casinos collected $11.65 billion from gamblers. The 2005 figure was 10.3 percent higher than the $10.6 billion won in 2004. Streshley said 2007 was trending upward but not by much.

"There were no major new property openings in the fiscal year and we're not going to see another new opening until late this year," Streshley said, referring to the $1.6 billion Palazzo, scheduled to open Dec. 20.

For all of fiscal 2007, which ended June 30, Nevada casinos won $12.7 billion, 4.6 percent more than the $12.2 billion won in fiscal 2006. Nevada's state budget is based on a fiscal year, which is why the Gaming Control Board reports fiscal gaming revenues.

In June, Nevada casinos won $959.8 million from gamblers, 5.7 percent higher compared with $907.7 million won in June 2006. Streshley said gambling on the Strip helped boost the state's figures during the month, which saw marked decreases through much of Clark County.

Strip casinos had collective gaming revenues of $500 million during June, a 13.3 percent increase from $441.4 million in June 2006. Streshley said the figure was even more impressive considering the now-closed Stardust was still open in June of last year.

"With no major special events on the calendar and factor in the Stardust closing, this was an exceptionally strong month, " Streshley said.

Gaming analysts credited an increase on the amount of money gambled coupled with a high-than-average hold percentage as the reason Strip casinos had an exceptional month.

Statewide, gamblers wagered more than $13.6 billion, with almost $6 billion being wagered in Strip casinos, a 13 percent increase from a year ago. Gamblers wagered almost $1.8 billion on Strip gaming tables and dropped $4.2 billion into Strip slot machines in June.

The table game win on the Strip was up 38.4 percent, which helped make up for a decrease in slot machine win of 4.2 percent.

While Strip casinos had a productive June, local casinos around Clark County had a down month.

Every market in Clark County reported year-over-year decreases with the biggest decline coming from North Las Vegas, where June's gaming win was down 13.8 percent.

Bear Stearns gaming analyst Joe Greff said the locals market generated $190.1 million in revenues and experienced a 5 percent decrease. The Boulder Strip, which includes some of Henderson's casinos, was down 2.9 percent. Meanwhile, the balance of the county, which saw double-digit percent increases each month in 2006 following the April opening of the Red Rock Resort, reported a gaming win of $104.9 million, down 4.5 percent.

"Red Rock opened in late April, thus, the June 2007 results include the full month of Red Rock, making the comparison in the segment slightly more difficult as patrons flocked to the new property last year," Greff said.

Streshley said the locals market has had softer-than-expected numbers over the past few months.

Casinos in downtown Las Vegas, after two straight months of increased revenues, had an off month, reporting $43.8 million in gaming win in June, down 1.9 percent from a year ago.