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Howard Stutz

State Economy: Gaming Win Tops $1 Billion

10 May 2006

LAS VEGAS, Nevada -- Another month, another $1 billion won by Nevada casinos.

And it doesn't appear there will be any slowdown.

For the third straight month in 2006 and the seventh time in the past 12 months, Nevada casinos topped the $1 billion mark in monthly gaming win, according to figures released for March by the state Gaming Control Board on Tuesday.

The $1.06 billion collected during March was the second- highest total ever, topped only by the $1.14 billion won in January.

The figure was a 3 percent increase from the $1.03 billion casinos won from customers in March 2005, the first time casinos ever won more than $1 billion from gamblers.

Frank Streshley, senior research analyst for the Gaming Control Board, said the March 2005 total was a 10 percent increase from the year before, making the 2006 gaming win even more impressive based on the tough comparison.

March 2006 saw its win boosted by strong visitation in Las Vegas from gamblers interested in wagering on the NCAA basketball tournament and NASCAR's racing weekend.

Streshley said the amount could have been even higher.

Winter storms throughout the month in Northern Nevada dampened tourism in that part of the state, sending gaming revenue plummeting 3.2 percent in Washoe County and more than 40 percent in South Lake Tahoe.

"We saw a record snowfall in March in the northern part of the state," Streshley said. "Numerous times, the snow hit just before the weekend or during the weekend, which cut off automobile traffic from California into Reno and Lake Tahoe."

Also, table game hold percentages at Strip casinos -- the money won from customers versus the actual amount gambled -- was less than a year ago.

"The casinos played unlucky compared to last year and the customers played lucky," Streshley said.

On the Strip, where casinos took in $546.1 million, a 6.2 percent increase from $514.4 million won in March 2005, fortune shined on baccarat players. Even though baccarat players gambled $350.5 million in March, 27 percent more than a year ago, the win by casinos was $36.1 million, down almost 10 percent from last year.

"Soft baccarat results partially offset the other revenue gains," Morgan Joseph gaming analyst Adam Steinberg said in a note to investors. "Had the hold percent been consistent with last year, we estimate total gaming revenue on the Las Vegas Strip would have gained 9 percent. Volumes remained strong for the month, as the consumer has shown no signs of being affected by high energy prices, rising interest rates, and a slowdown in the housing sector."

NASCAR fans, flocked to Las Vegas for the multievent UAW-DaimlerChrysler 400 racing weekend and did more than just head off to the racetrack. Streshley said visitation was better than a normal weekend because most NASCAR fans arrived on Thursday and stayed through Monday.

College basketball fans interested in wagering on their favorite teams in the 64-school NCAA Tournament, dubbed "March Madness," wagered on more than just sports.

"Both events are getting stronger turnouts every year," Streshley said.

Streshley said the casinos statewide could still easily report monthly gaming win of more $1 billion through June, which is traditionally a slow month. Easter weekend, he said, could slow revenues in April.

Clark County gaming revenue was $908.7 million, a 5 percent increase compared with $865 million in March 2005. All areas of the county showed increases in gaming win except one -- downtown Las Vegas casinos won $59.5 million in March, off 5.8 percent from $63.1 million a year ago. It was the ninth time in the past 11 months the downtown casinos collectively lost money.

Brian Gordon, a partner in Applied Analysis, a Las Vegas financial consulting firm, said the growth in gaming revenue has slowed, which was to be expected. While 5 to 6 percent year-over-year increases are "respectable," Gordon said the Strip has experienced double digit increases, including 19 percent in February.

"We have another major player (Wynn Las Vegas) in the market and the market has also recently expanded (the opening of South Coast and Red Rock Resort)," Gordon said. "It's just one month, so I don't know if it's a trend."

Streshley said it's not inconceivable that Clark County casinos could surpass the $1 billion monthly gaming win mark before the end of the year, especially with South Coast and Red Rock adding more capacity to the market. In January, Clark County casinos won $987.7 million, a monthly record.