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Rod Smith

Nevada Economy: Gaming Win Rises in August

12 October 2005

Nevada casinos continued their winning streak in August, reporting their third-best month ever and the 13th straight month of record-setting growth.

The Nevada Gaming Control Board on Tuesday reported August's statewide win was $989 million, up 9.3 percent from $905.1 million the previous August.

"The numbers were better than we expected," said Frank Streshley, senior research analyst for the state Gaming Control Board. "We knew we were comparing against a strong August last year, up 11.2 percent, and we knew having one less Saturday in the month would have an effect."

Deutsche Bank gaming analyst Marc Falcone called the total encouraging and said it proved summer trends remained strong despite much negative investor sentiment.

Brian Gordon, a partner in Applied Analysis, a Las Vegas-based financial consulting company, called the performance "healthy" and said it confirms the strength of travel and tourism in Southern Nevada.

"We have yet to see any evidence of a slowdown in any of the industry's fundamentals," he said.

Streshley said the bulk of the statewide $83.9 million increase, $57 million, came from the Strip in general and baccarat in particular.

Statewide, the baccarat win increased to $35.6 million, up 30.7 percent from the year before.

"Even more surprising was the amount (played on baccarat), $426 million, up 107 percent over last year," Streshley said.

"Historically, August is not strong for high-end play, and $400 million is more what you'd expect to see in January with the Super Bowl," he said.

Streshley said the continuing record-setting pace is a continuation of a trend that started with the April 28 opening of Wynn Las Vegas and the Augustus Tower at Caesars Palace earlier this year.

"Overall, we remain impressed with results from the high-end business and expect that the addition of Wynn Las Vegas will help maintain the strong momentum," Falcone said.

Bear Stearns gaming analyst Joe Greff agreed with Falcone. He said the results appear to support continued strength in the high-end, international table games segment.

On the Strip, the gaming win increased to $486.6 million in August, up 13.3 percent from $429.6 million a year earlier.

Greff called the Strip growth impressive. He added that August marked the fourth consecutive month of double-digit gains.

However, Steve Ruggiero, gaming analyst with Stamford, Conn.-based CRT Capital Group, sounded a word of warning about the data.

"On the surface of it, the 13.3 percent increase appears healthy," Ruggiero said, "but it's a notable slowdown as compared to the 22 percent growth on the Las Vegas Strip in July.

"It's likely that Wynn accounted for most of the year-over-year increase in Las Vegas Strip gaming revenues. Some of that increase was enjoyed by MGM (Mirage)'s properties, but that doesn't leave many gaming revenues for other operators that rely on the Las Vegas Strip, (such as The Venetian or Harrah's Entertainment)."

Off the Strip, Falcone estimated the Las Vegas locals market win increased 13.9 percent to $210.1 million, including the Boulder Strip (up 12.2 percent), North Las Vegas (up 19.9 percent) and the balance of the county (up 13.5 percent).

"For the quarter so far, the locals market is (up) 16 percent over last year, which we think indicates that energy prices are not impacting locals visitation," he said.

Ruggiero said the locals casinos' performance was in line with expectations. He expects enough growth in the overall market to meet Wall Street revenue projections.

Statewide, North Las Vegas showed the fastest growth, with a win of $30.3 million, up from $25.2 million a year earlier.

Downtown Las Vegas was Clark County's weakest area with a win of $53.5 million, down 2.6 percent from $54.9 million a year earlier. It was the fifth straight month of declines for the area, which Streshley attributed to the transition in ownership at the Golden Nugget, which recently sold to Tilman Fertitta, and weak table play.

Statewide, South Lake Tahoe had the poorest performance, with an August win of $37.3 million, down 8.7 percent from, $40.9 million the year before.

Clark County's gaming win was $808.4 million, up 11.3 percent from $726.3 million; the win in Washoe County was $97.2 million, up 2.5 percent from $94.9 million; the win in Elko County was $21.6 million, up 7.5 percent from $20.1 million; and the win in the Carson Valley area was $10.3 million, down 1 percent from $10.4 million a year earlier.

The control board also reported that the state collected $61.9 million in gaming taxes during September, based on taxable revenues generated in August. That was a 4 percent increase over $59.5 million in collections reported a year earlier.

For the quarter ended Sept. 30, the state collected $181.2 million, up 11 percent from $163.2 million in the third quarter of 2004.

Nevada Economy: Gaming Win Rises in August is republished from