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Gaming revenue: State win for month roars back

Las Vegas Review Journal

LAS VEGAS, Nevada -- After a challenging February and an off March, Nevada gaming revenue rebounded in April.

Casinos statewide won more than $1.053 billion from gamblers during the month, a jump of 6.4 percent compared with $989.9 million in April 2006, according to a report released Friday by the Gaming Control Board.

Gaming analysts said the figures were significant on two fronts. The numbers marked the first time Nevada casinos cracked the $1 billion figure for casino win during the month of April, and the results came against a challenging comparison; a nearly 13 percent overall increase a year ago.

Also, April 2007 had one less weekend day than April 2006.

"These numbers were much stronger than we expected," said Frank Streshley, the control board's senior research analyst. "The month was facing a very unfavorable comparison. Usually, you have a tough time matching up when there is one less weekend day."

Streshley and other gaming analysts said a portion of the state's slot machine revenue that was earned in March was actually counted in April because the month ended on a Saturday. Many casinos don't collect revenues from slot machines on the weekend when they are busy. Instead, the slot win is left in the machine over the weekend and is counted on the following Monday.

Casinos reported gaming win of $1.054 billion in March, an overall decrease of less than 1 percent during the month.

In April, the statewide win from slot machines was $736.4 million, up 11.4 percent from a year ago. The money wagered on slot machines was $11.3 billion, which was down less than 1 percent. The win from table games statewide was $303.1 million, which was down 4.1 percent from April 2006.

"We believe slot win data is skewed due to the timing of when coin is pulled from the machines," Nollenberger Capital Partners gaming analyst Justin Sebastiano said in a note to investors. "As a result, we believe gaming win in March was underestimated and gaming win in April was overstated."

Wachovia Capital Markets gaming analyst Brian McGill thought the results could be misunderstood.

"While the numbers look good on the surface, after adjusting for the timing of gaming revenue collections and normalizing the hold percentage, we think the results were mixed throughout the state," McGill said.

On the Strip, casinos won $529.2 million in April, a 2.4 percent increase compared with $516.6 million collected by casinos a year ago, which had been a jump more than 15 percent from the previous year.

Baccarat win helped Strip casinos, analysts said. Overall, the state reported baccarat revenues of $60.4 million, an increase of 8.2 percent. The total amount wagered on baccarat was $445.1 million, up 11.3 percent.

"Baccarat was much stronger than we expected," Streshley said. He thought attendance at the WBC super welterweight championship fight between Floyd Mayweather Jr. and Oscar De La Hoya at the MGM Grand Garden on May 5 by high-end customers would have kept baccarat players away from tables during April.

Also, Easter fell in April, and Streshley noted that it is not traditionally a good gambling holiday.

Analysts thought the timing in counting the slot win also helped Strip casinos.

"These results are slightly higher for hold anomalies," McGill said. "Essentially, the reporting of the results is skewed positively this month. Therefore, after normalizing the results, the Las Vegas Strip posted somewhat weak numbers in April."

Sebastiano said that when the Strip slot win was normalized, the total gaming win actually fell 1.7 percent.

Gaming analysts said, however, casinos serving Las Vegas residents had a strong April.

In North Las Vegas, the gaming win was up 24.4 percent in April, Boulder Strip casinos were up 14.7 percent and casinos making up the area called balance of the county climbed 26.5 percent.

"As opposed to the Strip, the Las Vegas locals market put up relatively good results in April even after normalizing the numbers," McGill said.

The balance of the county includes the Red Rock Resort in Summerlin, which opened in April 2006. The gaming win of $119.1 million, up from $94.1 million last year, will begin to stabilize starting in May.

"Coming off a 3.6 percent decline in March, the locals market quickly snapped back with revenue growth of 21.7 percent in April," Bear Stearns gaming analyst Joe Greff said in an investors note. "The April 2007 results, while not getting the full benefit of Red Rock, are still somewhat overstated in the balance of Clark County segment."

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