Back to 2004

The June numbers are in, and it’s woefully obvious that there’s no recovery in sight for Nevada’s gaming industry. From the LVRJ:

Nevadas monthly gaming revenues have sunk to levels not seen since 2004.

And analysts said theres no telling how low the bar will fall.

“Were still hearing from the casino operators that weekends are doing well, but filling rooms during the middle of the week is an issue,” Frank Streshley, chief of the Gaming Control Boards tax and license division, said Tuesday after the agency released gaming revenues for June. “People are coming, but they are just not spending.”

Nevada casinos collected $818.2 million from customers during June, a 13.8 percent decline from $949.3 million collected the same month a year ago.

The total was the lowest monthly figure since July 2004, when casinos won $813 million from gamblers. June was the 18th straight monthly decline as the gaming industry continued to be hampered by the sagging economy.

On the Strip, gaming revenues fell 14.8 percent in June to $414.5 million, compared with $486.4 million last year.

For the first six months of the year, gaming revenues are down statewide almost 13.5 percent, while the money won from gamblers on the Strip is off 14.7 percent.

June marked the end of fiscal year 2008-09 and gaming revenues for the 12 months were almost $10.8 billion statewide, a 13.7 percent decline from $12.5 billion in 2007-08. On the Strip for the fiscal year, gaming revenues declined 15.3 percent to $5.65 billion, compared with $6.67 billion in the previous fiscal year.

via NEVADA ECONOMY: Gaming revenue at 2004 level – Business – ReviewJournal.com.

A year and a half into “the decline,” and it doesn’t seem to be letting up. There were a few signs of life: despite a dismal month at the tables, both baccarat and roulette posted modest gains. This wasn’t enough to offset the tremendous decline in blackjack, craps, and everything else, but it shows that everything isn’t doom and gloom. It’s difficult to extrapolate from those two games, since they have little in common, besides the fact that they are both played in casinos and have little strategy about them. Roulette is generally a casual gambler’s game and baccarat is favored by high rollers and serious gamblers. If this was a renaissance in “real” gamblers, you’d expect to see craps and blackjack do better, instead of declining by about 15 and 20 percent, respectively.

Those are the statewide numbers. On the Strip, table revenues didn’t fall quite as much as slot revenues, assisted by an impressive 12.7% gain in roulette win. A particularly lucky high roller who favors the red and the black? An upsurge in demand for the game? Again, without more information it’s hard to say for sure, but I’d guess that it’s the former.

The nearly 50% decline in nickel win looks catastrophic. Supply has been reduced, but only about about 1/3, from 3,581 to 2,571, so it’s clear that nickel slots aren’t as popular as they once were. But players didn’t flock back to lower-hold quarter and dollar slots–instead, they moved mostly onto penny machines, which actually pay back less to the customer. Maybe the slots players who are looking for value are staying away, while those who are just into quick thrills are coming out.

Year to year, the shrinking of the Strip gaming floor continued, albeit not entirely. The Strip added a total of 18 table games and 3 poker tables from June ’08 to June ’09, and lost 755 slot machines. That’s with the addition of Encore, so it’s likely that “same store sales” would show a deeper decline.

Down in the Boulder Strip area, the volatility at M seems to have cooled off. For the whole reporting area, table games showed about a 10% decline, though roulette had a 14% increase. The house may have lost last month, but it won this time around.

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