When Nevada’s February gaming results were released this past week, the common analysis was that Nevada’s 4.48% decrease in gaming revenue was mostly attributable to February of 2016 having 29 days in it verses February of 2017 having 28 days.
Well, it was not as simple as that; convenient and easy to point to as the big difference, yes, but as with most things there is much more to the story.
While the disparity in the two Februarys was one mid-week day, if that extra day were truly the difference then the daily averages on a per game basis of win would have been on par, but that was not the case as the daily averages were down in most games.
However, the real story seems to be the continuing erosion of baccarat play compared to continuing growth in blackjack and roulette.
It seemed to go generally unnoticed that blackjack, with a gross win of $106,374,000 on a statewide basis, beat out baccarat’s gross win of $98,421,000, something that normally does not happen, particularly in a month highlighted by Chinese New Year celebrations and other invited guest events.
In fact, games such as baccarat and Pai Gow, each of which are favored by Asian gamblers, were down statewide 19% and 10% respectively, indicating a significant decline in activity in a period of expected increase. In fairness, if adjusted for the one extra day in the month, baccarat’s and Pai Gow’s decreases would have been 17% and 7% on a statewide basis.
But even more interestingly, on the Las Vegas Strip, when adjusting for the extra day, baccarat would have been down 18% and Pai Gow would have been down 24%, both surprising in a month of expected growth.
Offsetting declines in the above games was significant growth in blackjack and roulette. Statewide, blackjack and roulette showed increased gross wins of 12% and 59% respectively, and if adjusted for the extra day in the base period would have shown increases of 16% in blackjack and 65% in roulette.
While both games showed great growth, ultimately they are underscoring a continuing shift in player demographics and game preferences.
Blackjack and roulette seem to have emerged as the games of preference from the traditional selection of casino game offerings for the millennial generation. They are easy to learn and somewhat social in orientation. And, until the industry cracks the millennial game preference code and creates the “must play” games for that generation, they are the most acceptable of the “old people’s” games, at least for the time being.
At the same time, global gaming expansion, crack downs on currency movement and reporting are all having an impact on traditional Asian players in both their frequency of travel to Nevada and their availability of funds to play. This is seemingly confirmed by the 17% growth in Macau’s February gaming revenue versus Nevada’s 4.48% decrease.
As Las Vegas and Macau often compete for the same baccarat “whales,” it will be interesting in the future to see if when Macau reports increases in VIP baccarat play, Las Vegas baccarat revenues are conversely decreased. If this has become the new norm in the relationship of baccarat play in Macau verses Las Vegas, then Macau’s recently reported 18% growth in March’s gaming revenue is not good news for Las Vegas’ March baccarat revenues.
Slots are yet another story. Slot win was down statewide 4.57% on a month over month basis but only down 1.14% when adjusting for the extra day in February of the prior year. This was as much from volume as it was that as the industry gets even more competitive and the players have become more value sensitive; the average slot machine hold percentages have fallen around a half percent from the prior year.
Adjusting the state’s above referenced decrease in total gaming revenue of 4.48% as we have for certain specific games, the real rate of decrease in gaming revenue would have been 1.06%. While the 1.06% is truer to fact than the reported 4.48% decrease would suggest, inflation has not been considered. Inflation from February 2016 through February 2017 averaged 2.7%, with the point being that when considering any results in Nevada’s gaming revenue a good month should show growth at least on par or greater than the trailing 12 months’ rate of inflation
Regardless if it is luck of circumstance or a re-orientation of resort marketing, it does appear declines in Asian gaming activity in Nevada are being somewhat offset by growth in traditional domestic table game play along with growth in table game play from the millennial demographic. Hopefully that growth will continue to expand, pick up steam and accelerate at speeds that exceed the pace of erosion from the traditional Asian customer to Nevada and also exceeds the rate of inflation.
In any respect, it does seem that we can expect more periods in the near future where blackjack supplants baccarat as the dominant table game in Nevada, and perhaps we will see more roulette games popping up in popular party pits, at least until the next great table game is created.