April numbers tell a story: volatility

The Gaming Control Board has released Nevada’s April 2010 gaming revenue numbers.

To give everyone some perspective on the month, I’ve put together a new report: Nevada Gaming Statistics: April Comparison. This four-pager charts the performance of Nevada casinos over the past 7 Aprils. This month, we’ve got four reporting areas: Statewide, Las Vegas Strip, Boulder Strip, and Washoe County. This gives us the overall state situation, as well as foci for tourism (LV Strip), locals (Boulder Strip) and northern Nevada (Washoe County).

Metrics include:

* Total, slot, and table revenues
* Slot and table hold percentages
* Slot handles and table handles
* Numbers of tables
* Baccarat revenue, handle, hold data (statewide and Strip only)

You can find the report here: http://gaming.unlv.edu/reports/NV_april.pdf

So what do the numbers mean? Continuation of the trends that have been dominating since the fall, and something of a warning shot.

Overall, revenues for the state are down slightly. There’s a clear divergence between tables and slots: slot revenue declined by about 8%, while table revenues increased slightly. The divergence is clearer when you look at handle, the total amount played. Slot handle for the state declined by more than 6 percent–the lower hold explains the higher revenue decline. Table handle, though, was up by a little more than 1 percent. If not for bad luck at the bacc tables, table win would have increased.

Nevada April numbers--statewide
Nevada April Gaming Stats--statewide

Ahh, baccarat. In April the chickens finally came home to roost. Since the January numbers came out, I’ve been warning people that since A) the state is relying more on baccarat win and b) baccarat has a great deal of volatility, eventually the odds will turn against the house. That happened in April. In recent years, the average baccarat hold has been about 11.5 percent. This April, it was only 8.48 percent statewide–about a 26 percent drop.

This is significant. If the state’s bacc tables had held 11.5 percent, the state’s bacc revenues would have been abuot $80 million instead of $59 million– more than $20 million more in money to pay salaries, and more than $5 million in tax revenues that the state could surely use. Baccarat can be lucrative, but it’s not a great base to build your tax structure on.

Looking more closely at the Strip, it’s clear that Aria’s just not giving the bump that people had hoped it would.

Nevada Gaming Statistics--April, LV Strip
Nevada Gaming Statistics--April, LV Strip

Both slot revenue and handle posted small declines, even as the number of slots went up. Table revenues increased by about 5 percent, which didn’t quite offset the slot decline. Baccarat handle increased by about 23 percent, which is good, since the number of bacc tables increased by 16 percent. So as far as baccarat goes, at least, supply is keeping up with demand. April 2010 was the biggest April for baccarat play in history. But outside of baccarat, there really isn’t much recovery on the Strip.

Another noteworthy area was the Boulder Strip, which saw slot revenue fall by more than 23 percent, though a much lower hold (4.63% vs 5.15%) had much to do with it. Still, overall play continues to decline in the Las Vegas locals market.

Someone got hammered at the tables–table hold percentage fell from 12.93% in April 2009 to 6.63% in April 2010–a decline of nearly 50%. Handle was actually up by about 10 percent, but the dice just didn’t fall the house’s way this April.

So the theme of the month was volatility is not always your friend. With bacc win representing more than 7 percent of gaming revenues this month, it’s clear that the gaming business is becoming more of a gamble for everyone.

Spread the love