August fight, hurricanes responsible for big revenue growth in Vegas
October 03, 2017 3:00 AM
by The Analyst
Nevada’s August gaming revenues as reported by the Nevada Gaming Control Board were materially up pretty much across all the major markets in Nevada, with gross gaming revenues of $989,511,000, up 14.91% over the prior year.
The Las Vegas Strip, which continues to be the dominant driver with 55% of the state’s gaming revenue, enjoyed a growth of 21.35% over the prior year with gross gaming revenues of $545,538,000.
Often times when there is good news, people are not as prone to analyze the glad tidings as they are when things go bad, but in reality good news should be equally studied to discern if there were unique events or if the positive events are sustainable. On the surface, most will ascribe the Strip’s increases to the Mayweather fight, but there were two storms that contributed as much if not more than the fight did.
There is an old adage: “One man’s curse can sometimes be another man’s blessing.” That may have played well for the Strip’s August gaming revenues. While the Strip expected to be sold out for the Mayweather fight in late August, early on it looked to be an event that would drive more millennial retail traffic than premium gaming action. Then the rains came to Macau and Texas.
In talking with a few key Strip casino executives, the numbers for craps and baccarat were starting to look very soft for August then they started getting surprise calls from premium customers from Texas and Asia. While it is not uncommon just before a major event to have a spike in movement from premium gaming customers, who often decide at the last minute to travel to Las Vegas for an event, a number of calls came from customers more interested in avoiding hurricanes than going to the fight.
While our domestic news was dominated by the storm hitting Texas, at the same time a separate storm was drenching parts of Asia to the point that access to Macau and action in its casinos came almost to a stop. With Macau basically offline, opportunities were afforded for more than a few Asian whales to find their way to Las Vegas, giving a shot in the arm to the baccarat pits.
Similarly a few of our finer Strip resorts enjoyed a boost in action to their craps and 21 tables from Texans who decided to ride out the storm pelting their home state in Las Vegas. The convergence of players coming to Las Vegas for the fight and those coming to avoid storms created, as one executive put it, “a New Year’s Eve type headache” for managing suites, penthouses and villas.
Some of the customers were such a surprise that more than one executive on the Strip was stuck with the joy of moving million dollar customers out of their penthouses in favor of customers with much more significant lines of credit.
Consensus among the gaming executives I conferred with suggested the Mayweather fight helped the sportsbooks, blackjack and roulette tables, while the storm in Texas helped the craps pits and premium slots and the storm in Macau made a huge difference in the baccarat pits. One exec quipped, “I hope the bean counters remember the storms and fight when they do the budget for August 2018 and drop the target numbers 20% instead of increasing them by 5% over this year’s August.”
While the August numbers are welcome, it should be noted the Strips’ August results usually fluctuate a lot, and as good as the Strips’ 2017 August result were, they were still less than those of August 2014.
On a separate note, Oct. 3 will see the start of reunion time for gaming executives at the annual American Gaming Association’s G2E event. While it is always a joy to see the new technology unveiled at the show and discuss the latest hot topics in gaming, there is a special vibe when gaming executives old and young get together and talk the past, present and future of gaming.
Hot topics at this year’s event will likely center on the future of sports wagering in the U.S. and the future of skill-based or skill-influenced games on the casino floor. While creature comforts and dynamic patron attractions are continuing to grow in relevance to the show, it remains a gaming show and I, for one, will be on the hunt for those next generation games and diamonds in the rough that are destined to be industry game changers.