Nevada gaming revenues decline 11.6 percent in October


Visitor numbers in Las Vegas increased for the second straight month, but that wasn't reflected in the revenues produced by casinos on the Strip and statewide.

Nevada as a whole fell to its lowest single-month gaming revenue total in almost six years.

Statewide gaming revenues were $800.3 million, an 11.6 percent decline compared with $904.9 million reported in the same month a year ago.

October marked the 22nd straight month of declining gaming revenues and was the lowest single-month figure since December 2003, when casinos collected $767.4 million.

Frank Streshley, chief of the tax and license division for the Gaming Control Board, which released the figures Thursday, said the month was disappointing because a year ago, casino revenues fell 22 percent statewide.

"Up to this month, based on comments from operators, we thought we were seeing some improvement," Streshley said. "We didn't think we hit bottom, but we didn't think the decline would be as sharp. We've actually fallen much further back."

On the Strip, casino revenues were $426.3 million, a 10.3 percent decline compared with $475 million reported a year ago.

The Strip numbers were supported by high-end baccarat play. October marked the sixth consecutive month of year-over-year growth in baccarat revenues. Gamblers wagered $702.3 million on baccarat, up 43.2 percent from a year ago. Casinos won $64.8 million from the game, a 62.4 percent increase compared with October 2008.

Susquehanna Financial Group gaming analyst Robert LaFleur told investors baccarat results benefited Wynn Las Vegas, The Venetian, Bellagio and a handful of other MGM Mirage properties that cater to high-end play.

"The 10.3 percent decline (on the Strip ) this month is an improvement from the last 12 months average of a drop of 13.5 percent," LaFleur said. He said the Strip decrease in October was larger than the percentage drops in September and August.

Baccarat win was offset by declining revenues from other table games on the Strip. Blackjack revenue was $48.3 million, down 38.3 percent; craps win was $21.8 million, down 10.7 percent; and roulette win was $17 million, down 15.2 percent.

Streshley said the hold percentage — money won by casinos versus the amount wagered — for all table games on the Strip was 10.37 percent in October, far below the normal average of 11.5 to 12 percent.

"It was well below normal, the lowest I've seen in quite a while," Streshley said.

JP Morgan gaming analyst Joe Greff told investors that if Strip casinos had recorded the normal percentages, the gaming revenue decline would have been just 4 percent.

Meanwhile, more than 3.15 million tourists came to Las Vegas during October, a 3.7 percent increase compared with slightly more than 3 million tourists in October 2008.

The increase in visitor volume follows a 4.3 percent jump in September, which had been the first monthly increase since May 2008.

Kevin Bagger, senior director of marketing for the Las Vegas Convention and Visitors Authority, which released its numbers shortly after the control board released gaming revenues, said visitor volume had declined 10 percent a year ago.

The October 2009 numbers showed that visitors were coming but spending habits remained off.

"We're happy to see the increase in volume, but consumer spending is still impacted by the broader economy," Bagger said.

Strip room occupancy figures remained the highest of any city in the country, he said, despite a nearly 3 percent increase in the number of hotel rooms in Las Vegas from a year ago.

Room occupancy was 82.6 percent, off 1.2 percent, while Las Vegas has 141,489 rooms, which accounts for the opening of Encore, a new hotel tower at the Hard Rock, and some smaller room expansions.

The average daily room rate was down almost 14 percent in October.

For the first 10 months of 2009, gaming revenues are down 12.3 percent both statewide and on the Strip, while Las Vegas visitor volume is 30.6 million, down almost 4 percent from a year ago.

Convention attendance in Las Vegas declined 8.3 percent in October and is down almost 26 percent through the year.

In Clark County, gaming revenues fell 11.1 percent in October and double-digit declines were recorded in every reporting area accept the Boulder Strip, which was down 6.3 percent, and North Las Vegas, where gaming revenue increased 3.3 percent.

Streshley said the Las Vegas locals market would be the last area to recover because it is dependent on employment and a stable housing market. He didn't think either of which will return to normal levels until there is marked recovery on the Strip.

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871.

 

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