Mixed May message

The May numbers have been released from the Nevada Gaming Control Board, and while on the surface they seem to be not such bad news, they actually send a mixed message. Here are my thoughts, broken down by region.

Across the state, the gaming industry continues to shrink–we’ve got about 2,500 fewer slots and 70 fewer table games, despite the addition of a major new Strip casino since last May (Aria). It’s the equivalent of the net loss of a big Strip casino.

Slot revenue increased slightly for the month (0.44%), but this isn’t a sign that slot play is picking up. On the contrary, statewide slot handle–the amount actually played by players–continues to fall. The bump in revenues was due to a higher slot hold percentage–6.06% vs. 5.58% in May 2009. The handle fell from $10,094,516 to $9,336,733. This is the lowest handle in years, and it is a sign that people are in fact gambling less in Nevada. The slot handle has been declining steadily since 2006; earlier gains in revenues came because of higher hold, not more play.

Tables told the opposite story: revenues were down because of lower-than-usual hold, particularly at blackjack (10.37%) and baccarat (8.40%). The usual hold for those games is about 12-12.5%. But handle was up–partially, but not completely, due to a rise in baccarat play. So table play doesn’t look so bad.

Las Vegas Strip
The Strip saw the same general pattern as the state, with greater extremes: the slot hold was higher (6.94%), the overall table and baccarat holds were lower (10.47% & 8.26%). The slight gain in table handle seems to indicate that higher-end play is stabilizing, but not leading a recovery. It’s worth noting that there are more tables and slightly more slots on the Strip, so overall, handle-per-unit is probably down.

Boulder Strip
My favorite barometer of local Las Vegas gambling followed the same pattern as the Strip, with even more extremes. Slot hold increased from 4.24% to 5.55% (still lower than the holds for Mays 2005-2007, and slot handle declined from $1,253,821 to $1,068,378.

Overall table hold was a catastrophic 8.02%, though the table handle was up. They got hammered at craps (9.01 hold%) and absolutely slaughtered at mini-bacc (-15.48 hold%–yes, they actually lost money!). It’s either lucky players, bad management, or something worse.

Washoe County

Up north, things were quieter and much more consistent. With a decrease in slot hold, both handle and revenues fell slightly. Table hold increased a bit, but again both revenues and handle declined. Washoe County continues to gently coast downward, with no end in sight.

So there’s really no conclusive lesson to be drawn, except that we are definitely not seeing a recovery of slot play, and any gains in revenues are coming because of higher holds, not more play.

Spread the love