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Gaming revenues continue slump

Luck, not the economy, sunk Nevada’s gaming industry in April.

Gamblers played lucky and the casinos “hold” percentage suffered, sending statewide revenues to their seventh straight month of double-digit declines. April was also the 16th straight month that gaming revenues fell from the prior year.

Statewide, gaming revenues were $859.4 million during the month, compared with $1 billion in April 2008. In the first four months of 2009, casino revenues statewide are down 14.6 percent.

“We were disappointed with the number because we were comparing with a 5 percent decline a year ago,” said Frank Streshley, chief of the Gaming Control Board’s tax and license division. The agency reported the April figures on Friday.

On the Strip, gaming revenues were $441.3 million in April, a decline of 15.8 percent compared with $524.1 million casinos earned a year ago. Revenues are down on the Strip 16.6 percent for the year.

The problem was hold percentages — the amount of money casinos collected based on the amount wagered.

Customers gambled $2.2 billion in April on table games, which was an increase of less than 1 percent from a year ago. However, casino revenues from table games was $251.6 million, a decline of 20.5 percent. The hold percentage for tables games was 11.45 percent compared with 14.47 percent a year ago.

Susquehanna gaming analyst Robert LaFleur said the economy might be impacting the habits of gamblers, which, in turn, has affected hold percentages.

“There has been a recent trend where players that are up have been more likely to walk away from the tables and cash out as opposed to playing longer, which can depress hold percentages,” LaFleur told investors.

Streshley estimated that if casinos held the same percent they did a year ago, gaming revenues would have been $66 million higher, slicing the monthly decline in half.

“Luck definitely played a factor and had a huge impact on gaming revenues,” Streshley said.

Revenues from slot machines were $596.2 million, a decline of 11.2 percent. Gamblers wagered $9.7 billion on slot machines in April, a decrease of 7.9 percent from a year ago, while the hold percentage on slot machines was 6.17 percent, compared with 6.4 percent in April 2008.

Wall Street wasn’t surprised by the continued decline in Nevada’s gaming revenues. The nationwide recession, which has led to reduced visitation, cutbacks in consumers’ discretionary spending and high unemployment, continues to hurt the casino industry.

During recent investment forums and in talks with analysts, casino company executives have said they have witnessed some market stabilization. Weekend business has begun to improve, but not to the levels the gaming industry experienced a few years ago.

“The tone in recent comments by casino executives has remained cautiously optimistic,” Wachovia gaming analyst Dennis Farrell Jr. told investors Friday. “(However), we think Las Vegas Strip operators will continue to face a challenging environment.”

Gaming taxes based on the April casino revenues fell 5.9 percent to $51.8 million, the smallest monthly decline of the current fiscal year. However, gaming tax collections in the fiscal year are down 14.6 percent.

Two areas of Clark County were the only reporting ones statewide to show revenue increases compared with a year ago, due in the most part to the openings of new hotel-casinos.

North Las Vegas gaming revenues were up 5.4 percent because of the opening last November of Aliante Station. Revenues from Boulder Strip area, which also covers casinos in Henderson, climbed 2.3 percent, due to the August opening of the Eastside Cannery and the March opening of M Resort.

However, the decline of 14.9 percent in the area known as the balance of Clark County pointed toward an overall decline in what locals are wagering, according to analysts.

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

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