trip casinos won us$ 155.7 million from baccarat players in December, surpassing previous records for revenue and wagering volume set in December 2007 at the tail end of the tourism boom. By comparison, the industry’s most popular games, slots and blackjack, have retreated to revenue levels seen in 2003-04.
December’s opening of MGM Mirage’s us$ 8.5 billion CityCenter, a high-end complex anchored by the luxury Aria, was primarily responsible for the boost in baccarat play.
More than us$ 42 million of the estimated us$ 56 million in gambling revenue generated by Aria in the two weeks after its December 16 opening came from baccarat, according to Las Vegas analysts Union Gaming Group and others that have examined state figures released this month.
By those estimates, each of Aria’s 21 baccarat tables generated about us$ 2 million in revenue in two weeks. Those are big numbers, even by the standards of baccarat, a game that can attract wagers of more than us$ 100,000 a hand. Baccarat tables in the Strip’s biggest casinos generated about half-a-million dollars a month last year, state figures show.
New Year’s Eve has always been a big event for baccarat, which is favored by wealthy Chinese whose net worth is growing even as the economies of the United States and other parts of the world are hurting.
Casino openings typically aren’t a good measure of long-term business performance, as they generate huge crowds who flock to experience the buzz of a new resort. That’s especially true of CityCenter, the nation’s largest and most expensive privately funded construction project. Its five-year development was closely followed in the media and marketed globally by MGM Mirage.
MGM Mirage stock soared on the news but plummeted again Thursday after reporting poor fourth-quarter earnings that revealed big declines in some other parts of the business. During the company’s conference call to discuss earnings, CEO Jim Murren said international business, driven by Asian customers, reached a new high last year and that its share of the high roller market has increased, in part because of Aria. Other properties are benefiting as fourth-quarter baccarat volume rose at casinos other than Aria, Murren said.
The company had its biggest crowds for Chinese New Year this year, he said, while credit lines and front money that facilitate high roller action are up significantly from a year ago. Many Asian players are first-time customers who are coming to town to see Aria, he said.
Baccarat is helping to fill the state’s depressed tax coffers but doesn’t benefit the vast majority of Nevada casinos, including most on the Strip, that don’t offer it or cater to high rollers. Overall, the Strip experienced its biggest decline in gambling revenue in history last year, and statewide gambling revenue fell to 2003 levels.
Lower-tier properties can’t afford the potential hit that a single baccarat player’s multimillion-dollar win could mean for the bottom line. And yet, baccarat play on the Strip - which accounts for slightly more than half of all the gambling revenue won by casinos statewide - is making Nevada’s numbers look better than they would otherwise.
November and December were the only two months of year-over-year increases in gambling revenue on the Strip in 2009. Excluding baccarat, overall Strip gambling revenue would have fallen 5 percent to 6 percent during those months.