Nevada gaming revenue up less than 1 percent in 2015; Strip down slightly

Call 2015 a wash for the state's casino industry.

Statewide gaming revenue climbed less than 1 percent (0.9 percent to be exact) to $11.1 billion during the calendar year, according to figures released Friday by the Gaming Control Board.

On the Strip, gaming revenue was relatively flat (down 0.4 percent actually) at $6.348 billion, which compared with $6.372 billion in 2014. The slight dip was the Strip's second straight annual decrease following four consecutive annual increases.

The statewide gaming industry — Las Vegas in particular — earns most of its revenue from outside the casino floor. In the last fiscal year, gaming revenue accounted for 43.2 percent of the total revenue collected by casinos statewide.

On the Strip, gaming revenue was just 34.9 percent of the total revenue with the larger portion coming from, hotel rooms, restaurants, entertainment and other nongaming amenities.

"We encourage investors to keep in mind gross gaming revenue represents only one, and decreasing in relative importance, we might add, source of cash flow for Strip resort operators," said Stifel Nicolaus Capital Markets gaming analyst Steven Wieczynski.

During 2015, Clark County as a whole saw gaming revenue jump less than 1 percent to $9.6 billion, helped by single-digit increases in other Southern Nevada reporting areas, including a 6 percent jump in downtown gaming revenue. Downtown casinos had the largest year-over-year increase in any state reporting area.

Only three areas of the state — the Strip and the two Lake Tahoe markets — were down in 2015.

"It shows the growth was widespread across the state," said Control Board Senior Research Director Mike Lawton.

Baccarat results, he said, were the reason for the Strip's overall decline in 2015. Revenue from the game of $1.366 billion in 2015 was a decline of $203.7 million, or 12.5 percent, from 2014. The Strip's overall revenue was down just $24.5 million from a year ago, meaning baccarat was the key factor in the drop.

Brent Pirosch, director of gaming consulting for CBRE, said Strip casinos are becoming less reliant on baccarat. He said 2013's overall figure of $1.68 billion in baccarat revenue was a record year and "the comparables since then have been tough to meet."

Pirosch said baccarat represented 21.5 percent of the Strip's total gaming revenue in 2015, down from 24.5 percent in 2014. He said the game was just 14 percent of the Strip's overall total in 2000.

"Up until the last 18-24 months, baccarat had been propping up revenue growth for the past several years, becoming a greater portion of overall win," Piroch said.

Washoe County in Northern Nevada saw gaming revenue increase 3.2 percent in 2015.

Statewide in 2015, slot machine revenue was $7 billion, a 3.8 percent increase. Table game revenue of $4.1 billion was a 3.8 percent decline.

Lawton said 2015 marked the first time the state cracked the $7 billion mark for slot machine revenue since 2008.

In December, gaming revenue increased 3.3 percent statewide to $982 million and 8.2 percent on the Strip to $600.7 million to close out the year. The figures were just the third monthly increases in the last seven months for both markets.

December numbers on the Strip were actually helped by baccarat results. Revenue from the game of $177.3 million was a 19.8 percent increase from a year ago. Wagering of $1.2 billion was a decline of 10.7 percent. The hold percentage was 14.8 percent compared with 12.7 percent in December 2014.

"Overall, we continue to think that the Las Vegas Strip can generate mid-single revenue per available room and low single digit visitation growth, though we expect the market to continue experiencing volatility in baccarat play given a likely slowdown in Chinese players," said J.P. Morgan gaming analyst Joe Greff.

In January, Nevada collected $48.6 million gaming taxes based on the December casino revenue, an increase of 11.3 percent from a year ago. For the first seven months of the calendar year, gaming tax collections are up less than 1 percent.

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871. Find @howardstutz on Twitter.