Nevada gambling revenues soar 11.2 % in August

The Nevada State Gaming Control Board Gaming Commission said Monday that casinos statewide collected almost us$ 955.3 million in gaming revenues during the month, an 11.17 % increase compared with us$ 859.3 million collected in August 2012.

On the Strip, casinos collected us$ 589 million in August, an increase of 19.98 % compared with us$ 490.9 million in August 2012. Baccarat high rollers made a substantial contribution to the boost, wagering over a billion dollars to deliver us$ 193.6 million in revenue, up 55.6 % or us$ 69.2 million. The hold percentage - the amount of wagers the casinos kept compared to was what was won by players - was 18.85 %. The 12-month average hold for baccarat is 12.83 %.

“Although the headline number looks strong, this was mostly a ‘luck’-driven result, as Strip properties played extremely lucky in August,” RBC Capital Markets gaming analyst John Kempf told investors.

Big resorts on the Las Vegas Strip won us$ 816.7 million, a 12.3 % increase over August 2012. Clark County as a whole saw gambling revenues spike nearly 20 %. The Strip also had a strong month from table games. The revenue from games, minus baccarat, increased 21.5 %. “While baccarat is clearly the star of the month, domestic play exhibited encouraging trends,” Deutsche Bank gaming analyst Carlo Santarelli told investors.

Stifel Nicolaus Capital Markets gaming analyst Steven Wieczynski said Strip casino operators have seen improved numbers in the past few months coming from food and beverage offerings, which can be attributed to normal tourist traffic. Gaming revenues, however, has largely been driven by internationally sourced baccarat play.

“All told, we are generally pleased with the August results,” Wieczynski said. “As we have noted for some time, we continue to believe a more pronounced Strip recovery will be largely predicated upon a return of domestic visitation.”

The amount wagered on baccarat actually fell 1.3 % to us$ 1 billion. Gaming Control Board Senior Research Analyst Michael Lawton said the decrease was the fifth consecutive monthly decline in baccarat wagering, a game that is often dependent on special events centered around high-end business.
Union Gaming Group Managing Director Bill Lerner said that historical high baccarat volume takes place in January and February (Chinese New Year) and the September and October period (special events).

“Recently, there seems to be less clarity on when large players come into town,” Lerner said. The double-digit gaming revenue increases statewide and on the Strip were a rebound from steep declines in July.

With August’s results on the books, statewide gaming revenues up less than 1 % for the first eight months of the year. On Strip, gaming revenues have increased 2.1 % through August. “We believe the recovery in Las Vegas’s gaming fundamentals remains tepid,” Susquehanna International Group gaming analyst Rachael Rothman told investors. During August, Clark County as whole did not fare as well.

Casinos in North Las Vegas saw gaming revenues decline almost 18.3 %, casinos along the Boulder Strip experienced a 12.7 % decrease, while downtown casinos saw gaming revenues drop 8.3 %. Overall, Clark County gaming revenues increased 12.3 %.

In Washoe County, casinos won us$ 73.8 million, up 8.4 % and the largest rise recorded since 2009 in the county, which has seen gambling revenue gains in five of the last six months. Revenue won by casinos in Reno were up 9.7 %, Lawson reported.

Lawton attributed the declines in certain markets to the timing of slot machine revenue reporting for the locals market, with the  month ending on a weekend. Much of the slot machine totals in the locals market will fall into September’s figures.

Meanwhile, revenues from the balance of Clark County increased 4.47 % during August. The reporting area includes revenues from Ultimate Poker, which was the state’s only online gaming website operating in August.

Union Gaming Group said the results are included with revenues from card games, which showed an increase 43.7 percent in August. Lerner said the number implied that online poker did “roughly us$ 600,000 in gaming revenue during the month. “We believe this is notable given there hasn’t been many tangible financial results yet of online gaming,” Lerner said.

Overall, gamblers wagered us$ 11.3 billion on card and table games and slots machines. us$ 2.6 billion was bet on card games, of which us$ 1 billion was wagered on baccarat. Game and table win was up us$ 110.7 million, or 35 %. us$ 8.7 billion went into the slot and video gambling machines – an increase of us$ 21.3 million on the same period last year.

The state of Nevada collected us$ 51.3 million in gambling taxes from the August casino revenues – a 3.5 % increase from the same month last year.
 Gaming regulators won’t break out online poker revenues into a separate category until three websites are operating. Nevada collected us$ 514 million in gaming taxes through September 26, based gaming revenues reported in August, an increase of 3.46 %. For the first three months of the fiscal year, gaming tax collections are up less than 1 %.