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Best of Howard Stutz

Gaming Guru

Howard Stutz

State gaming win: Casinos bailed out by locals

12 December 2006

NEVADA -- For once, it wasn't all about the Strip.

Casinos along the famous boulevard saw October gaming revenues decrease for the second straight month in 2006, according to figures released Monday by the Gaming Control Board.

However, Nevada's statewide gaming win climbed slightly in October, thanks to double-digit gaming revenue increases in North Las Vegas, along the Boulder Highway, Henderson and in other segments of the locals casino market.

Nevada casinos won $1.062 billion in October, 0.37 percent better than October 2005, when they won $1.059 billion. The 2005 number was a 14.5 increase over the same month in 2004, a jump in revenues that gaming analysts said would be tough to compete against.

The October 2006 gaming win from 342 casinos, however, marked the seventh time in 10 months that statewide gambling revenues topped $1 billion.

Gaming Control Board Senior Research Analyst Frank Streshley said October's numbers were hurt by the calendar; the month had one fewer Saturday than it did in 2005.

"When there is one less Saturday, that tends to take down volume somewhat," Streshley said.

The amount of money wagered statewide in October, $14.1 billion, showed the impact. Gamblers wagered $11.5 billion in slot machines, down 2.6 percent from October 2005, and $2.6 billion on table games, off 6.6 percent.

Still, gamblers continued a lucky streak for the second straight month against the giant Strip casinos.

Revenues on the Strip were $532.2 million, down 5.6 percent from $563.7 million a year ago. Baccarat was an extremely unlucky game for the resorts in October. The win from gamblers playing the card game was $29.1 million in the month, a 54.2 percent decrease from 2005. The hold percentage -- the amount won against the amount wagered -- was 5.5 percent, down from 10.6 percent last year.

"We look for a hold percentage to average about 11.5 percent, so this was way off," Streshley said.

The amount wagered on baccarat $528.8 million in October, down from $598.2 million for the same month a year ago.

Statewide, the win from table games was $307.5 million, down 13.1 percent from a year ago. Slot machine revenues made up some of the shortfall, with casinos winning $743 million, up 7.2 percent from a year ago.

"On the Strip, weakness mostly came from lower table hold," Bear Stearns gaming analyst Joe Greff said in a note to investors. "Baccarat revenues contributed to the weakness."

Streshley factored out the baccarat numbers from the October figures and, without the game, statewide casinos would have been up almost 4 percent from a year ago; Strip casinos would have been up less than 1 percent.

"(Results from) the Strip usually drive the state," Streshley said. "This month, there was a big swing, but the locals market really saved the numbers."

The casinos listed under the Balance of the County category, which includes properties in unincorporated parts of Clark County, showed the largest month-over-month increase. The casinos, which include the new Red Rock Resort and South Point, won $111.1 million in October, an 18.2 percent increase compared with $94 million a year ago.

The Boulder Strip casinos, which include all of Henderson, won $88.4 million in October, a 13.6 percent increase compared with $77.8 million a year ago. Casinos in North Las Vegas saw their gaming win jump 12.4 percent.

Mesquite had the largest percentage gaming win increase anywhere in the state, with revenues jumping 20 percent. Laughlin casinos, which reported gaming win decreases the past four months, won $54.9 million in October, a 9.7 percent increase from $50.1 million a year ago.

Downtown Las Vegas continued its downward spiral for the fifth straight month, winning $59.7 million in October, down 1.7 percent compared with $60.7 million a year ago.