Nevada February gaming revenues jump 15.1 %

The statewide gaming revenue total was the highest monthly amount produced by Nevada casinos since December 2007.

On the Strip, gaming revenues hit a record us$ 696.1 million, a 31.2 % increase. “While February saw the timing benefit of a strong Chinese New Year, we think results still came in ahead of expectations,” Macquarie Securities gaming analyst Chard Beynon told investors.

The record figures were the result of high-end baccarat play associated with the 10-day Chinese New Year holiday. In 2012, the Chinese New Year was in January. In 2013, the holiday fell into February. As a result, gaming revenues in January declined 12.4 % statewide and 18.7 % on the Strip.

Analysts said they wanted to see the February results to make a more accurate two-month comparison. During February, high-end baccarat revenues of us$ 264.2 million - the highest single-month figure ever reported for the game - was a 131.9 % increase compared with February 2012.

Combined with January’s us$ 95.5 million collected from baccarat players - a 50.8 % decline - the Strip’s two-month revenue take from baccarat is up 16.8 % over the same two months of 2012.

Susquehanna Financial Group gaming analyst Rachael Rothman said the baccarat numbers put “a positive bias on first quarter gaming estimates for Strip operators with more baccarat exposure,” such as Wynn Resorts, Las Vegas Sands and MGM Resorts International.

Stifel Nicolaus Capital Markets gaming analyst Steven Wieczynski said companies operating in Macau and Singapore built a strong baccarat base that has made the operations less dependent on American customers. “Given Asian gaming patrons’ propensity to visit the Strip, we believe those operators with a presence in Asian gaming markets should be able to attract a disproportionate share of the emerging baccarat business going forward,” Wieczynski said.

Gamblers wagered us$ 1.6 billion on baccarat in February, a 100.2 % increase. For the first two months of 2013, baccarat wagering is up 1.4 %. The hold percentage - amount of wagers kept by casinos versus the money won by gamblers - was 16.6 %, compared to 14.4 % a year ago.

Without baccarat, Strip gaming revenues still would have increased 3.6 % in February. Revenues from other table games helped offset a 2.6 % decline in slot machine revenues, which several analysts said reflect a slowness in mass-market wagering.

For the first two months of 2013, Strip gaming revenues are up 4.2 % compared with the same two months a year ago. In 2012, the Strip produced us$ 6.2 billion in gaming revenues, a 2.3 % increase over 2011.

“Looking over the last several months, we believe results point to a continued uneven recovery on the Las Vegas Strip,” JP Morgan gaming analyst Joe Greff told investors. He said taking into account February positives and negatives, results “represent no change from our more recent views and recent forecasts on Las Vegas Strip operating fundamentals.”

The Strip’s Chinese New Year business, however, didn’t spill into other parts of Clark County. Every other market experienced a gaming revenue decline. Clark County as a whole reported an overall monthly increase of 17.8 %.

Gaming Control Board senior research analyst Michael Lawton said the calendar played a role in the local gaming markets’ declines. February 2012 included an extra day because of the leap year. “We estimated last year that the extra day in February was worth an additional 3.5 % to the statewide gaming win,” Lawton said. “When you take into consideration some of the markets were facing tough comparisons to a year ago, the loss of a day was a contributing factor.”

The only other regions of the state with an increase in gaming revenues in February were the Lake Tahoe markets. North Lake Tahoe casinos increased gaming revenues 35.3 %, while South Lake Tahoe casinos experienced a 7.8 % gaming revenue hike. 

The gaming revenue figure didn’t translate into an increase in tax collections. Nevada collected almost us$ 62 million in gaming taxes during March, based on the February totals, a 12.2 % decline from a year ago. For the first nine months of the fiscal year, gaming tax collections are up 2.9 %.

Lawton said the timing of the collection of markers from high-end customers factored into the tax collections. While January’s statewide gaming revenues declined, tax collections based on the revenues increased 18.3 %.

Much of the gaming taxes produced in February could show up in subsequent months.