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Howard Stutz

Neither Strip nor Pacquiao can rescue state gaming figures in April

30 May 2014

The Strip and Manny Pacquiao couldn’t bail out Nevada in April.

Statewide gaming revenue fell less than 1 percent during the month, the third time in the first four months on 2014 that Nevada has reported a decline in results.

The Strip, however, saw revenue grow almost 3.2 percent, thanks in large part of high-end baccarat play. Much of the action was associated with customers attracted to Las Vegas for the April 12 championship fight between Pacquiao and Timothy Bradley at the MGM Grand Garden.

Nevada casinos collected $852 million in gaming revenue in April, down from $854.3 million in April 2013, the Gaming Control Board said Wednesday.

On the Strip, casinos collected $463 million in gaming revenue, compared to $448.6 million in the same month last year.

Baccarat play saved April in Las Vegas. Without the game, Strip gaming revenue would have declined 3 percent.

“By and large, we suspect evidence of strong baccarat play disproportionately benefited the operators with established Asian sourcing channels,” Stifel Nicolaus Capital Markets gaming analyst Steven Wieczynski told investors, mentioning MGM Resorts International, Wynn Resorts Ltd. and Las Vegas Sands Corp.

He didn’t think investors would hold the April results against gaming operators.

“We believe most investors are looking to developments occurring outside of the United States, such as Japan legislation, and Macau trends, when evaluating the merits of the U.S.-listed operators,” Wieczynski said.

During April, Strip casinos collected $90.4 million in revenue from baccarat, an increase of 40 percent. The amount wagered on baccarat was $645.3 million, an increase of 19.8 percent. Through the first four months of 2014, baccarat wagering is up 1.3 percent. The hold percentage on the game — what casinos kept versus what players won — was 14.01 percent.

Most analysts cited the Pacquiao-Bradley fight, which was won by Pacquiao, with driving up the baccarat results.

“Baccarat play, in particular, tends to be event-driven and marquee boxing fights tend to bring high rollers into town,” Union Gaming Group analyst Robert Shore told investors. “However, nonbaccarat tables and slots showed modest decreases.”

Without baccarat, Strip table game revenue was down 0.5 percent to $136.6 million, while table game wagering increased 1.1 percent to $1.1 billion. Slot machine revenue was down 4.4 percent to $235.9 million and wagering fell 2.6 percent to $3.2 billion.

April was the second straight positive gaming revenue month on the Strip.

Through April, gaming revenue is down 2.8 percent statewide compared to the first four months of 2013. Strip gaming revenue is down 3.6 percent from a year ago.

J.P. Morgan gaming analyst Joe Greff said the Strip figure is still better than where trends seemed to be headed after February.

“We maintain our positive outlook for the Las Vegas Strip and believe the overall recovery will continue as 2014 progresses,” Greff told investors.

In addition to the Strip, only two other statewide reporting areas showed gaming revenue increases in April. South Lake Tahoe’s casino market declined almost 42.3 percent in the month, the state’s steepest revenue drop.

Strip casinos were the only sector in Clark County that reported an increase in gaming revenue in April. As a whole, Clark County revenue grew less than 1 percent to $742.7 million, compared to $736.3 million in April 2013.

Revenue collected from Nevada’s three online poker websites was $792,000, down 14.5 percent compared with March. For the first 11 months of operation, the three poker websites have collected a total of $10.237 million in gaming revenue.

“In the future, multi-state poker compacts could be a more impactful revenue event given a larger base of players, and due to the liquidity dynamic,” Shore said.

Gaming taxes collected through May 27 based on April’s gaming revenue was $47.9 million, an increase of 1.43 percent over the same month a year ago. For the first 11 months of the fiscal year, gaming tax collections have increased less than 1 percent.