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Howard Stutz

Nevada gaming revenues jump once again

12 November 2010

LAS VEGAS, Nevada -- Two months certainly do not make a trend.

But analysts expressed cautious optimism that a pattern was taking hold after state gaming revenues showed a modest increase in September, the first time since the fall of 2007 that Nevada casinos have recorded two straight monthly revenue bumps.

The increase of less than 1 percent wasn't the double-digit jump Nevada casinos and the Strip experienced in August. Analysts, however, said Wednesday indicators are trending far more positive than the state has seen in several years.

"Let's see what happens in October," Gaming Control Board senior research analyst Mike Lawton said after the agency released September's figures.

August's game totals were helped by a one-month shift of two large Las Vegas conventions that were held in September last year.

Still, even without the conventions, Strip gaming revenues saw a 2.8 percent increase in September. On the Strip, casino revenues have been either up or flat for three straight months. Strip casinos also reported monthly gaming revenue increases in February and March.

"The indications we're hearing about October are also positive," Lawton said.

The gaming numbers come on top of increases in the number of visitors coming to Las Vegas. The Las Vegas Convention and Visitors Authority reported Wednesday that visitation was up 2 percent in September.

Statewide, Nevada casinos collected almost $917.9 million in gaming revenues in September, an increase of 0.7 percent compared with $911.2 million collected the same month a year ago. The two straight positive months ended five consecutive months of declining revenues statewide.

Strip gaming revenues were almost $520.6 million in September, an increase of 2.8 percent compared with $506.4 in the same month of 2009.

In August, gaming revenues grew 11.5 percent statewide and 21.1 percent on the Strip.

Wall Street said the Strip's jump fueled several recent debt restructuring moves by MGM Resorts International and a planned initial public stock offering later this month by privately-held Harrah's Entertainment.

Analysts said investors already have accounted for September's Strip performance because most of the figures were reported in the third-quarter earnings, which ended Sept. 30.

"We view this historical data as a qualitative and directional indicator of trends throughout the Nevada market," Jefferies