September saw very respectable growth in gaming revenue for the Las Vegas Strip as well as for Nevada when compared to the prior year. Strip revenue growth from the prior year was 4.67% composed of 4.11% growth in slots and 5.2% net growth in all other gaming areas.
This performance helped drive the trailing 12 months revenue growth up to 3.31% and is very important as it is the first time in a very long time that gaming revenues grew faster than inflation for a 12-month period.
While good news like this is cause to celebrate, it also needs to be understood to see if it’s an anomaly or a sign of more good things to come.
September was itself a bit of an odd month; the country saw the devastating results of hurricanes on Texas, Florida, and Puerto Rico along with a wide range of other islands in the waters of the Caribbean, dramatically changing the recreational travel plans of many people. It also saw the celebration of certain Jewish holidays that normally occur later in the year, which impacted group and convention business for part of the month.
These events translated to increased availability in the category of customers called the Free and Independent Traveler (FIT). Given so much of the Strip’s business is now driven by group sales, conventions and special events, we sometimes forget that the FITs were what made a big part of the success of Las Vegas in the early days and these folk usually have more time to spend in the casino. Groups and conventions typically have significant time commitments to their sponsors and as such there is often just not that many hours left for gambling.
For example, let’s say you came to Las Vegas at your employer’s direction to attend a three-day trade show. Assuming you are in town 72 hours, 24 hours would be committed for sleep, 6 hours for breakfast lunch and dinner, 18 to 24 hours committed to the trade show, leaving 18 to 24 hours of unencumbered recreational time.
On the other hand, if you came as a Free and Independent Traveler you would have the same 72 hours in town, the same 24 hours committed for sleep and the same 6 hours for dining but have 40 hours unstructured and available to gamble and partake in other offerings of the Strip – nearly double the free time of the group/convention traveler.
Further supporting that we had good old-fashioned traditional Vegas visitors in September was the makeup of the type of games that saw the greatest increases in Strip gaming revenues for the month. Craps was up 42%, “21” up 4%; roulette, 4%; slots, 4%; even keno was up 10%. All games that tend to be favored by domestic players, who this time were in Las Vegas en masse and had the time to play.
By contrast, though baccarat grew a respectable 3% the other games traditionally favored by our international visitors were materially down: mini-baccarat was down 28%, pai gow, 5% and pai gow poker, 18%.
Perhaps the message a few operators on the Strip could take from these numbers is maybe, just maybe they should pay a bit more attention to the FIT segment of the customers coming to Las Vegas. After all, with the economy seemingly fully recovered and the stock market continuing to be on a rocket those FITs have a pocketful of cash and are looking for a place to play and make a few memories.
For those looking for an update on the seemingly never-ending lawsuit between Joe Asher of William Hill and his former partners at Cantor Gaming (now CG Technology), according to persons close to both sides of the case, testimony will continue through this week. Expectations are that testimony will wrap up next week, and the case be given over to the jury for their deliberation after attorneys’ closing arguments and the judge’s instructions.
One lawyer who is closely watching the case but is not representing either side has suggested the transcripts of the trial might end up reading like a history adventure novel on Nevada sportsbooks. Current scuttlebutt is that so far things seem to be flowing in favor of Cantor and unless Asher’s side gets off more than a couple of “Hail Mary” passes in the second half of the trial, while the “Fat Lady” hasn’t sung yet she is probably warming up.