Casino gaming income grows

Let's not break out the party hats and self-congratulatory statements just yet.

Analysts see November's modest statewide gaming revenue increase, the state's first monthly rise in almost two years, as just a start to the casino industry's recovering from a recession that has curtailed consumer spending, especially discretionary entertainment dollars spent by gamblers.

Nevada casinos collected $873.2 million from customers in November, a nearly 4.4 percent increase compared with $836.8 million won from gamblers in November 2008.

The figures, which ended a streak of double-digit declines in monthly gaming revenues, were released Tuesday by the Gaming Control Board.

The gaming numbers came out the same day the Las Vegas Convention and Visitors Authority announced that visitor volume had risen for the third month in a row in November. Las Vegas visitor volume was up almost 3 percent in November, with 2.9 million visitors. That compares to 2.8 million a year ago. For the first 11 months of the year, visitor volume is at 33.5 million, down 3.4 percent from a year ago.

Convention attendance declined 13 percent in November. Convention attendance is down almost 25 percent for the year, but the number of conventions held in Las Vegas during November was up almost 4 percent from the prior year.

On the Strip, gaming revenues were up for the first time since December 2007. Casinos collected $473.8 million, an 8.3 percent rise from the $437.7 million in the same month the prior year.

Gaming revenues for the first 11 months of the year are down 11 percent statewide and 10.7 percent on the Strip.

November gaming revenues were up 19 percent on the Boulder Strip, grew almost 21 percent in North Las Vegas and were up 2.6 percent in the balance of the Clark County.

The numbers surprised analysts. Most expected Las Vegas would see a revenue bump from the December opening of MGM Mirage's $8.5 billion CityCenter development, but not until January figures were released.

"November was well above expectations," said Frank Streshley, chief of the control board's tax and license division. "We didn't think we would turn the corner until the first part of 2010, well after the opening of CityCenter."

CRT Capital Group gaming analyst Steve Ruggiero said because Oct. 31 fell on a Saturday, some slot machine revenues from the weekend fell into November's reporting period.

"This can partially explain the apparent surge in the month of November as compared to the prior year's period," Ruggiero told investors.

He said October and November gaming revenue totals were off 3.9 percent compared to the same two months of 2008. Still, he said, it was an improvement.

JP Morgan gaming analyst Joe Greff said gaming revenues earned by casinos in November 2008 were down almost 15 percent statewide from the prior year, which made for an easy comparison.

Table games, especially high-end baccarat play by international customers, continued to fuel the Strip's rebound.

Streshley said the Nov. 14 Manny Pacquiao vs. Miguel Cotto championship fight at the MGM Grand helped spur baccarat totals, but high-end play was up throughout the month.

Strip casinos won $92.7 million from baccarat, a 136.3 percent increase compared with a year ago. More than $690.8 million was wagered on baccarat, up 84 percent.

Susquehanna Financial Group gaming analyst Robert LaFleur said baccarat results were a positive sign for several casino operators.

"The strong baccarat numbers benefit properties such as Wynn, Venetian, Bellagio, along with to a lesser extent some of the other MGM Mirage properties, like the MGM Grand and Mirage," LaFleur said.

Streshley said any sort of recovery on the gaming front would come from table games, which usually attract more high-end players.

In November, table games accounted for gaming revenues of $312.8 million, an increase of 17.3 percent compared with a year ago, while the amount wagered was $2.4 billion, an increase of 13.6 percent.

Meanwhile, gamblers wagered $8.7 billion on slot machines, down 10.2 percent from a year ago, while the revenues produced by the games was $549.3 million, a decline of 1.6 percent.

Early indications are that New Year's Eve had strong numbers and the recently concluded Consumer Electronics Show grew attendance by about 6 percent.

"We're cautiously optimistic that we're seeing some stabilization, but it's too early to tell if we've turned the corner," Kris Tibbs, research manager for the convention authority, said about the visitor numbers. "We want to see a couple more months of positive numbers."

"We are more confident that 2010 will represent the positive inflection in Las Vegas," said Union Gaming Group principal Bill Lerner.

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