Hey! What passes for good news on the casino revenue front: the decrease in revenue isn’t as bad as it’s been. Who would have thought we’d be saying that back in 2007? From the LV Sun:
Casinos along the Las Vegas Strip won $480.8 million in May, making it the 17th straight month of a fall in revenues.
The state Gaming Control Board said the win, before taxes and business expenses, dropped by 6.3 percent at the 41 casinos on the Strip compared to May 2008. But it ended a seven-month string of double-digit declines.
Positive signs were the wins in baccarat, up 38.5 percent, roulette increased 24.1 percent and the penny slot machines inched up 4.1 percent.
The board reported the win statewide dropped to $889 million, down 8.34 percent from the same month of a year ago. And that compares to May 2008, when gross win was down 15.2 percent.
And the past fiscal year the state has collected $655.4 million in taxes from the casinos, a decrease of 15 percent.
via Strip casinos see 6.3 percent drop in winnings – Las Vegas Sun.
Looking at the statewide numbers, table win actually improved by 1.1%, thanks to that robust growth in baccarat. Part of this was because of more play, but part was because the casinos got luckier. I’ll break that down in the Strip section below. Statewide, slot win was down almost 13 percent. That’s a major dropoff by any standard. The total number of slots in Nevada casinos has, since May 2007, fallen by about 5,000, to 170,316, which fits into my previous assertion that Nevada casinos have to do more with less. The unheralded shrinkage of Nevada’s casino industry continues. This has major budget implications. Even if we magically returned to 2007 levels of gambling, the state would be bringing in less in taxes since the casinos collectively have fewer machines. Aria opening later this year will reverse the decline, but if other casinos close, it won’t do much good.
I’m going to take some time to lay this trend out. These are statewide slot and table number from the Nevada Gaming Revenue Reports, May 2005-2009:
May 2005: Tables: 5,936 | Slots: 179,144
May 2006: Tables: 5,965 | Slots: 178,701
May 2007: Tables: 5,857 | Slots: 175,077
May 2008: Tables: 5,851 | Slots: 168,497
May 2009: Tables: 5,714 | Slots: 170,316
In the past five years, we’ve had a 3.7% decline in the number of table games and a 4.9% decline in the number of slots. So even if people were gambling as much as they did a few years ago, the state would still be earning less in gaming taxes because revenues would be proportionally lower. Those who argue that the state needs to re-examine its tax structure should consider that point: it seems to be logical to assume that, with a smaller industry, the state will have to ease its reliance on gaming revenue taxes.
Now…on to those Strip baccarat numbers. Here how they compare with last year’s:
May 2008 bacc win percentage: 11.29% | win: $69,723,000 | total play: $617,643,000
May 2009 bacc win percentage: 13.35% | win: $96,519,000 | total play: $722,988,000
Strip bacc gamblers were about 2% more unlucky this May than last. If the house had maintained its 11.29% win percentage, the total bacc win would have been about $81.6 million for the month. Any way you slice it, that’s a legitimate increase. If the trend holds, the outlook for City Center starts to look better: if high-end play is on the rise, there will be room for Aria to take some of that market. Just how much room there is, however, remains to be seen.
Slot play in general on the Strip was weak: there were declines in every denomination but pennies and Megabucks. With 21 more Megabucks machines on the Strip in May 2009 vs May 2008 (about a 13% increase), total win more than doubled.
The bump in penny slot revenues, though, is less impressive. The total number of penny slots on the Strip increased by about 21%. The total win, however, was up by only about 4%. Monthly revenue per machine in May 2008 was $6,193.51. In May 2009, it was $5,318.93. That’s a 13.3% decline in win per unit for the month–not good indicator of strengthening demand. On the other hand, quarter machine win per unit this May was only $3,278.87, so it looks like, all things being equal, a slot manager could boost his monthly numbers considerably by replacing some quarters with pennies.
I could keep on analyzing this for the next few hours, but I’ve got other things to do, so that’s all for now.