Baseball has been very good to Las Vegas sportsbooks
August 08, 2017 3:11 AM
by The Analyst
June is always an interesting month to analyze Nevada gaming revenue. Often the majority of the activity on the Las Vegas Strip comes from tour and travel types with results being largely reflective of slot activity and lower-level table play. What high-end action the Strip gets in June is usually tied to Chinese Dragon Boat Festival promotions and manifests in baccarat results.
The results for the state were essentially flat with a net gaming revenue growth of 0.9%, which is disappointing as at least on par with inflation is infinitely more desirable.
In keeping with prior estimations Strip baccarat results were down 15.58%, in part from reduced hold percentages and in part from reduced volume of play. Strip “21” on the other hand continued to show growth with significant increase in volume as it once again reported higher win results than baccarat. Strip slots, befitting its appeal to the mass markets, showed remarkable growth with a 4.99% increase over the prior year.
The amazing surprise, the icing that drove gaming results into the positive was baseball.
One of the more famous catch phrases from the founding days of “Saturday Night Live” was a baseball parody featuring a fictional retired player named Chico Escuela giving brief speeches. Chico was portrayed by Garrett Morris, who through the course of related skits would frequently say “Baseball been berry, berry good to me.”
Well for the month of June most Las Vegas sportsbooks could echo a paraphrased version: “Baseball been berry, berry good to sportsbooks,” particularly on the Strip and downtown. Granted, in June of 2016 the bettors faired very well against Strip and downtown books, but fortunes turned back in favor of the books in 2017 with downtown books improving their win in basketball by 661% and in baseball by 2,438%; Strip books improved their win in basketball by 35.6% and in baseball by 189.84%.
Admittedly downtown Las Vegas gaming results were a bit befuddling. During high periods of retail tourist activity it is very expected to see improved slot revenue, so it was a surprise to see slot revenue decrease by 6.22% in that market segment.
Usually when there is a decrease in slot play there is a correlative decrease in “21” and other volume-based table games. However, this was not the case as win for “21” grew by 4.3% and win for other non-traditional table games grew by 419.46%. When traditional correlations fail there is usually a macro reason for it, in this case the millennial generation.
While the Las Vegas Strip continues to appeal to a very broad range of patrons with a wide variety of property types and wide range of pricing options, downtown seems to be finally switching its market appeal. Many had envisioned changing downtown Las Vegas from a focus on long time repeat older customers with moderate budgets to a younger crowd, based on past results; it seemed a continual losing battle.
If June results are repeated in future periods it may just be that the aggregation of activities and events that appeal to a younger age bracket have taken hold and may breathe a renewed vibrancy into the area.
It should be kept in mind that as interesting as it is to watch the hopefully successful evolution of downtown, downtown does not even generate 10% of the gaming revenues of the Las Vegas Strip and substantially less than that when it come to the categories of rooms, food and beverage, and other retail activities. As such before some of the fringe Strip properties start copying aspects of downtown’s evolution they should be sure there is really an expanding market segment and not just a market niche.
In final retrospect on June’s gaming results, the bigger segment of the Strip fell in line with expectations while the results in downtown will require more study and continual examination of its seeming market shift. Perhaps though the most surprising thing about June is it was the first time in this writer’s recollection one could say baseball was a very important component of Nevada’s gaming revenue results, and to paraphrase the SNL catchphrase again, “Baseball was berry, berry good to Las Vegas.”