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Rod Smith

Nevada Economy: State Gaming Win Up in July

12 September 2005

Nevada casinos continued their winning streak in July, reporting their 12th straight month of record-setting growth and the fastest growth rate in nearly five years.

The Nevada Gaming Control Board reported Friday the statewide win in July was $958.4 million, compared with $812.7 million the previous July.

"Wow, what a tremendous performance, particularly compared with the previous year," said Brian Gordon, a principal in Las Vegas-based financial consulting company Applied Analysis. "And it was really across the board, just tremendous growth

"High-end baccarat was off the charts, blackjack and table games were strong, as well as slots, with good hold percentages," he said.

Deutsche Bank analyst Marc Falcone said July was an outstanding month for Las Vegas overall.

"We were pretty sure the numbers would show the industry is stronger than the stock prices have suggested, but they were even better than we expected."

Frank Streshley, senior research analyst for the state Gaming Control Board, said the 17.9 percent increase over 2004 was the strongest growth for the industry in Nevada since November 1999, when gaming win grew 21.9 percent.

July's gaming win was $765.6 million in Clark County, up 18.2 percent from $646.4 million a year earlier, and $483.5 million on the Strip, up 22.7 percent from the previous June.

"The Strip paralleled the state as a whole, with the strongest growth since November 1999, when the win increased 35 percent. It was also the 12th straight month of growth since July 2004 when the win slipped seven-tenths of a percent," Streshley said.

Bear Stearns gaming analyst Joe Greff said the gaming win growth was particularly impressive on the Strip, noting that July marked the third consecutive month of double-digit gains.

The Boulder Strip showed the fastest growth in the state with a win of $64.7 million, up 29.2 percent from $50.1 million.

However, Streshley said that was largely because July 2004 was a weak month, with a drop of 16.9 percent in the gaming win.

Downtown Las Vegas, with a win of $51.8 million, down 2.4 percent from $53 million a year earlier, was the only area of the state in which gaming win dropped.

Streshley said having July 4 land on a Monday and having an added weekend fall in the month compared with 2004 gave the gaming companies a huge boost.

He said the strength in the performance showed up across the board geographically and in business segments with slot, table game and baccarat volumes all up.

The gaming win in South Lake Tahoe increased 36.2 percent, to $42.5 million from $31.2 million. Gaming win in Elko County was $24 million, up 19.7 percent from $20 million a year earlier. The win in the Carson Valley area was $11.7 million, up 17.9 percent from $9.9 million a year earlier.

Statewide, the baccarat win increased to $50.1 million, up 60 percent from the year before.

Greff said Wynn Las Vegas, which opened April 28, is helping drive the baccarat and other high-end game performance. He added that baccarat volume was up 75.7 percent even compared with an increase of 47.5 percent the previous July.

"The results appear to support continued strength in the high-end, international table games segment," he said.

Falcone said: "It's clear Wynn Las Vegas is growing the market across every segment, slots, table games and baccarat."

Statewide, slot machines accounted for $632.6 million of the total win, up 12 percent from a year earlier. Table games accounted for $312.2 million of the total win, up 30.5 percent from a year earlier.

Falcone said the growth is likely to continue.

"We expect the strength exhibited in the third quarter to keep Las Vegas cooking in the fourth, thanks to a strong entertainment and convention calendar and strong visitor trends," he said.

For the month of August, the state collected $64.7 million in gaming fees, up 31.4 percent from $49.2 million a year earlier.

Streshley said state revenues grew faster than gaming win because operators are still collecting on previously issued credit.