More about the “Friday Effect”

In my analysis of the January Nevada gaming numbers, I made reference to slot win from December being rolled over into January, something I dubbed the “Friday Effect” because I couldn’t think of a better description. I got a few emails asking for more details about it, so here’s the explanation that GCB Senior Research Analyst Michael Lawton gave me via email, shared with his permission:

December ended on a Friday so as a result of operators not dropping and counting on weekends we had December slot revenue roll into January. This also generally happens every Dec/Jan as operators don’t like to disrupt the slot floor during the holiday when there are such heavy volumes. The other factor is that the handle is reported in the actual month that it occurred because the meters are read electronically by on-line systems. As a result our stats get distorted because operators report on a cash basis and report the drop in the following month. I would estimate that approximately $58 million rolled into January from December for the State and of that $41 million was from the Strip.

One of the side effects of the difference between reporting the drop and win is that the handle estimates in my monthly reports are usually a bit different from the official coin-in numbers, but they’re still close enough to get the general gist of what’s happening. In slots, for example, the bottom line is that play has consistently fallen across the state.

Looking at past results and the December/January swing, I’d guesstimate that for most markets January slot hold was 0.4% to 0.5% higher than it should have been.

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