Nevada casinos enjoy a Sweet November

Jan 12, 2010 7:38 PM

 

Nevada gaming revenues ended a 22 month losing streak in November as casinos statewide reported winnings of $873 million, a 4.3 percent increase over the $836.8 million won a year ago.

The monthly increase was the first for Nevada casinos since December 2007, according to the Gaming Control Board’s revenue report released last week.

The news was even better on the Las Vegas Strip, where casinos reported revenues of $473.8 million in November, an 8 percent increase from November 2008.

Table games did the "heavy lifting" as they posted an overall win of $312.8 million, a solid 17.3 percent year-over-year increase.

Baccarat was the most lucrative game for the house as casinos won $94.2 million from gamblers, a stunning 136.9 percent increase from a year ago.

Blackjack contributed $85.1 million (down 0.14 percent) with roulette adding $25.3 million (up 7.5 percent), although craps played unlucky as the house win, $24.2 million, was down 29.4 percent.

Nevada slot machines posted revenues of $549.3 million in November, down about 1.6 percent from last year, although it could have been much worse.

The total amount handled by slot machines plummeted $1 billion, from $9.74 billion in November 2008 to $8.74 billion in November 2009.

The slot win in November was aided by tighter machines. The overall payback or "hold" percentage for slots in November was 6.28 percent, nearly 10 percent higher than a year ago.

Virtually all denominations of slots were tighter in November. The hold on penny slots was up 8.9 percent, for nickel slots it was up 21 percent, quarter slots were up 24 percent and dollar slots were up 12.6 percent.

The higher hold percentages were enough to help fuel the 4.3 percent increase in casino revenues. If slots in November had the same hold as a year earlier, revenues would have slipped about 2 percent – and Nevada would have had a 23rd straight month of declines.

Nonetheless, most analysts viewed the November increase optimistically, and predicted additional gains in December and January.

"For the first time since December 2007, statewide and Strip gaming revenues were positive," wrote Joe Greff, an analyst with J.P. Morgan. "We think November’s relative strength has been well understood by investors, (but is) encouraging nonetheless."

Another analyst, Bill Lerner of Union Gaming, said he expected continued revenue growth for December and January, based on increased revenues generated at MGM MIRAGE’s CityCenter, which opened in mid-December, and January’s Consumer Electronics Show, which drew about 6 percent more attendees than in January 2009.

"On the heels of a strong New Year’s in Las Vegas … CityCenter and Bellagio foot traffic have been quite strong based on our observations," Lerner said. "Multiple restaurateurs that we have spoken with are experiencing growth in key metrics such as covers and average checks," which combined with "overall Las Vegas visitation momentum … we are more confident that 2010 will represent the positive inflection in Las Vegas."

For the first 11 months of 2009, gaming revenues reached $9.52 billion, about 11.1 percent less than the $10.71 billion posted in January-November 2008.

Based on analysts’ predictions, GamingToday is projecting an increase of about 9 percent in gaming revenues for December, or about $967.9 million.

That would bring 2009’s total gaming revenues to $10.49 billion, about 9.5 percent less than the $11.599 billion casinos won in 2008.

In 2007, Nevada casinos won $12.85 billion.

Other casino income

Nevada’s race and sports books also reported increased handle in November. Race books raked in $5.6 million, a very rare increase of 4.6 percent from a year ago, while sports books won $30.6 million from bettors, a nice 12.6 percent increase from November 2008.

The increased handle in race books was the first since October 2007, thus ending a streak of 23 months of declining revenues, most of which were double-digit declines.

Football was the biggest winner for Nevada sports books, even though the $14.8 million won was down about 39 percent from the previous November. Basketball accounted for $5.5 million in revenues, up 139 percent, while parlay cards generated $8 million, up about 112 percent, with a hold percentage of over 52 percent.

The state’s 105 poker rooms reported revenues of $11 million in November, about 8 percent less than a year ago.

 

Question? Comment? E-mail me at: David Stratton