Summer doldrums be damned.
Nevada gaming revenues jumped 11.5 percent in August, reversing a five-month slide and giving Las Vegas’ largest casino operators a boost on Wall Street.
The statewide increase was fueled by a 21.1 percent jump on the Strip, the fourth time in eight months Strip casinos either had a gaming revenue increase or were flat in comparison to the same month a year ago.
Nevada casinos collected $944.5 million from customers in August, compared with almost $847 million in August 2009. On the Strip, casinos collected $544.3 million from customers in August, compared with almost $450 million a year ago.
The figures, reported Friday by the Gaming Control Board, were surprising in a sense because August is typically one of the slower months of the year on the gaming revenue calendar.
“It’s not a mirage, the Strip had a big August … in one of the slowest seasonal months,” said Wells Fargo Securities gaming analyst Carlo Santarelli.
Baccarat results, which had the second-highest revenue month in state history and an all-time monthly record for the amount wagered, continued to drive Strip gaming totals.
However, gaming analysts focused on the fact that without baccarat, the state’s gaming revenues still would have been up almost 6.3 percent. Mike Lawton, senior research analyst for the control board, said August’s nonbaccarat increase was the first time that happened since December 2007.
“The August data — and July’s — leads us to conclude that at least a few of the luxury properties on the Strip are off to a strong third quarter,” Jacob Oberman, the director of gaming research and analysis for CB Richard Ellis, told the firm’s clients. “We are not popping the champagne corks quite yet, however, for the nonluxury properties and for the Strip as a whole.”
Strip gamblers wagered $1.92 billion on baccarat, an 87.2 percent increase from a year ago. Casinos won $160 million on the game, an increase of 47.2 percent, which was second only the total collected in February.
Lawton said there were not any special events that drove the baccarat crowd, “just several players at a few casinos and the Strip beat them.”
Investors responded positively to the overall results in Nevada. Gaming stocks rose significantly on the news, including a 15.8 percent increase in MGM Resorts International and a 10 percent jump by Boyd Gaming Corp.
“While higher baccarat primarily drove August’s casino revenue growth along the Strip, we view the results as positive for MGM Resorts, Las Vegas Sands, and Wynn Resorts as it signals improving consumer spending trends,” said Jefferies & Co. gaming analyst David Katz.
Gaming revenues are down just 0.2 percent statewide through August, while on the Strip, gaming revenues are up 4.5 percent compared to the same eight months a year ago.
Baccarat wagering was included in the $3.4 billion gamblers bet on table games statewide in August, an increase of 22.8 percent from a year ago. The revenues from table games were $351.8 million. Gamblers fed $8.8 billion into state slot machines, a decline of 2.9 percent, which translated into revenues of $582.5 million.
Analysts said the figures might hint toward the beginning signs of turnaround.
“Consistent with what we heard from operators on our recent trip to Las Vegas, strong baccarat volumes continue to lead the way as conditions on the Strip begin to show signs of stabilization,” Stifel Nicolaus Capital Markets gaming analyst Steven Wieczynski told investors. “In the end, we believe today’s news stands to provide the most support to shares of MGM Resorts, the operator with the largest presence on the Strip. MGM continues to secure its fair share of high-end Asian baccarat play and is well-positioned to benefit from a return of convention business to the Strip.”
Santarelli said a “silver lining” in the numbers was “the 13.2 percent year-over-year growth in slot revenue.”
Despite the positive news from the Strip, the rest of Clark County was a mixed bag.
Revenues at North Las Vegas casinos were up 13.6 percent, but downtown, Laughlin and Mesquite casinos all showed declines. Gaming revenues in Clark County as a whole were up 13.6 percent.
“The mixed to slightly up results in the downtown and locals markets is a positive indicator for Boyd Gaming, which generates 39.6 percent of its (cash flow) from these markets,” Katz said.
Gaming tax collections based on the August revenues were almost $61.8 million, an increase of 24.4 percent compared with $49.7 million collected in the same period a year ago.
For the first three months of the fiscal year, gaming tax collections are up 1.3 percent.
Contact reporter Howard Stutz at firstname.lastname@example.org or 702-477-3871.