When Nevada gaming revenue reports are released each month, all eyes are on the Strip and how much money its megaresorts won or lost. Hundreds of millions of dollars hang in the balance.
But when April's numbers came out last week, it was downtown's revenues that raised more than a few eyebrows. Downtown's casinos raked in more than $48 million, a nearly 25 percent jump over April 2011.
Gaming operators rejoiced the sudden turnabout of fortune, though seasoned analysts warned the numbers may not be as robust as they seem.
Downtown gaming revenues began picking up last year, reversing a decade of steep decline. But April's number is artificially high due to an almost 8 percent slot machine hold, the result of the "Friday effect," said David G. Schwartz, director of the University of Nevada, Las Vegas' Center for Gaming Research.
Slot machine handle is immediately reported to the Nevada Gaming Control Board, but win is tallied manually. When months end on a weekend, as did March, numbers are reported early to avoid disrupting the casino floor. The last few days of March were rolled into April, which caused a 12 percent drop in gaming revenues in March and April's 25 percent spike.
Downtown is seeing revenue increases - just not a 25 percent leap that might tempt casino operators to start thinking big, Schwartz said.
"I think (downtown operators) should still be cautious. They shouldn't build something huge. But it looks like what they're doing is paying off," Schwartz said.
The growth of gaming revenue downtown over the past four months is outpacing the Strip at 8.9 percent on average versus 5.7 percent.
Downtown casino owners say they are also seeing more visitors this year, though growth is difficult to gauge because the Las Vegas Convention and Visitors Authority doesn't track downtown visitation on a monthly basis.
Derek Stevens, co-owner of The D Las Vegas and the Golden Gate, said renovations and new investment in the area are sparking more interest from tourists and locals alike.
"We have to be realistic. We played a little lucky (in April)," Stevens said. "But 25 percent is still 25 percent. One data point doesn't make a trend, but we started to see this turn here about a year ago. I have high expectations that downtown's going to do very well."
Stevens and Golden Gate partner Mark Brandenburg will soon finish a remodeling that began earlier this year, and Stevens is in the process of renovating The D (formerly known as Fitzgeralds). The changes follow recent makeovers at the Golden Nugget, Gold Spike, El Cortez and the Plaza.
"Downtown has been overshadowed for two decades," Brandenburg said. "Now here we are in this last year with this burst of activity and people now seeing things that are going on downtown, investing in downtown. It's a remarkable change in image, energy and attention."
At the El Cortez, where much of the casino's business comes from a steady stream of regulars, executive manager Alex Epstein said the property is seeing a wider variety of clientele.
"The demographics are changing," she said. "Rather than seeing an increase in players we already have, we're seeing a widening in the demographic spectrum. We're seeing younger people - people from out of town ... A huge part of it is the renovations."
Appealing to both demographics makes for a strong business base: Tourists spend more money on any given weekend, while locals frequent the casino more often.
Boyd Gaming Corp. has a third of the downtown market share with its three properties, the California Hotel, Fremont and Main Street Station. It markets heavily to customers from Hawaii.
Steve Thompson, Boyd Gaming's senior vice president of Nevada operations, said downtown developments help Boyd better market to Hawaiian visitors who take the company's charter flights.
Like Stevens and Brandenburg, Thompson said he has noticed an upswing in visitation, though "spend per visitor remains down."
"The economy hasn't returned to pre-2007 levels," he added. "Visitation has returned. But at this point, we simply need more time."
Contact reporter Caitlin McGarry at email@example.com or 702-387-5273.