Gaming revenue dips in Nevada during August

LAS VEGAS, Nevada -- Two days after the state teachers union floated a ballot initiative proposal calling for a 3 percent increase in Nevada's gaming tax, casino regulators said revenues earned by the state's gambling halls in August took a significant tumble.

The Gaming Control Board on Wednesday said Nevada casinos reported a gaming win of $1.016 billion in August, a 4.4 percent decrease compared with $1.063 billion a year ago. The decrease also comes on the heels of July's figures, where state casinos recorded an all-time one-month gaming win total of $1.146 billion.

Strip casinos mirrored the statewide results. The gaming win in August was $531.6 million, a 4.5 percent drop compared with $556.3 million in August 2006.

Frank Streshley, senior research analyst for the Gaming Control Board, said several factors played a part in the down month. The gaming win statewide for August 2006 was a 7.5 percent increase over the same month in 2005, while the Strip a year ago recorded a 14.3 percent increase.

High-end baccarat players were absent from casinos for much of the month, which drove down table game play considerably. Statewide, gamblers wagered $11.4 billion in slot machines, a less that 1 percent decrease from a year ago, while the $2.4 billion bet on table games was off almost 10 percent from August 2006.

"The calendar didn't show any special events during the month, such as a major boxing matches or concerts, which tend to attract high-end customers," Streshley said.

The gaming revenues produced by baccarat was $70.3 million, down more than 12 percent from a year ago. The amount wagered on baccarat was $484.8 million, down 37.5 percent, or $290 million, from a year ago.

"We had above-average hold percentages in baccarat, or else the revenue figures could have been an even larger decline," Streshley said.

With the Nevada State Education Association promoting a move to increase the tax on gross gaming revenues from 6.75 percent to 9.75 percent on casinos with revenues of more than $1 million a month, gaming activists want to be clear that revenues are not the same as profits.

Gross gaming revenues reflect money collected before any expenses a deducted, including gaming taxes, payroll, expenses and operational costs.

Bear Stearns gaming analyst Joe Greff said the calendar also hurt the numbers in August. Because Aug. 31 fell on a Friday, some slot machine revenues will be recorded with September's numbers. Still, he wasn't surprised by the overall totals.

"Strip trends appeared weak on the surface but actually were in line with our thinking," Greff said in a note to investors, adding that both the Stardust and New Frontier casinos, since closed, were operating last August.

"On the surface, the calendar in August was favorable with nine weekend days in 2007 versus eight in 2006," Greff said. "That said, the absence of slot revenues on Aug. 31 made for a tough comparison regardless of the favorable calendar."

The Las Vegas locals also market took a hit in August. Casinos along the Boulder Highway and in Henderson showed revenue declines of more than 15 percent, while North Las Vegas casinos fell 24 percent. The area considered balance of the county, which includes Red Rock Resort and South Point, had its revenues decline almost 6 percent.

Downtown casinos, however, reported their second straight month of gaming revenue increases. Downtown revenues were $48.2 million in August, up more than 5 percent compared with $45.9 million a year ago. Streshley said he didn't have a reason why the figures were up downtown.

"New ownership and some of the properties have been in place for a while and maybe their promotional efforts are starting to pay off," Streshley said.