Nevada gaming win
sets new record

Mar 14, 2006 3:23 AM

Gaming revenue in Nevada surged to record levels in January, marking the start of what could be a distinctive year for the industry.

Gaming win in Nevada — the amount casinos keep after paying winners — rose 24.4 percent to $1.14 billion during the month, while gaming win on the Strip, the heart of the state’s gaming industry, increased 29.5 percent to $627.5 million from a year earlier.

In downtown Las Vegas, revenue improved to $57.3 million, a 15.4 percent increase over a year ago, as table and slot revenue increased 15.9 percent and 15.2 percent, respectively.

The casinos on the Boulder Strip posted a 23 percent increase in revenue to $93.7 million, with slot and table win increasing 25.4 percent and 7.2 percent, respectively.

Revenue in North Las Vegas rose 30 percent to $30.6 million, which was fueled mostly by a 35.5 percent increase in slot revenue, which offset a reduction in table win of about 9.2 percent.

Analysts point out that casinos in January benefited from the Chinese New Year holiday, which fell during the last three days of the month (it usually falls in February), and a weak January 2005, which was adversely affected by heavy rainfall in California and Nevada.

Nevertheless, January was "another solid month" with all but a few of the reporting regions posting strong double-digit gains.

"The Las Vegas market continues to motor along and generate solid business levels for operators," said David Katz of CIBC World Markets. "Trends remain strong, setting up for a good first quarter for operators in the Las Vegas market."

Katz added that, contrary to some analysts who are predicting declining growth on the Las Vegas Strip in 2006, he believes business levels will "moderate and become more level" as 2006 progresses.

"Both the Las Vegas Strip and locals market should continue to perform well into 2006, which should support our market forecasts of mid-to-high single digit growth," Katz said.

A closer look at the breakdown of gaming revenue reveals some interesting trends. Table games, with a few exceptions, posted major gains in January.

For instance, blackjack, which appeared to have flat-lined over the past few months, saw its win amount surge by 35 percent in January to $122 million.

Craps also enjoyed a 34 percent increase in revenue to $40.2 million while baccarat generated $91 million for operators, a solid 23 percent more than it did in January 2005.

The Asian game of Pai Gow had one of its best months ever as gaming win jumped 88 percent to $3.3 million.

The improvement in table revenue generally was driven by gains in both the amount wagered and the hold percentage.

Table games that didn’t fare well were Caribbean Stud, whose win declined to $1.9 million, a 40 percent plunge, and Let It Ride, which saw revenue decline 10.8 percent to $4.9 million.

Other games that continued a trend of slumping revenue figures were keno, down 7 percent to $4.5 million, and bingo, which slipped 56 percent to $538,000.

Slot machine revenue in Nevada reported robust gains in January with most games and denominations posting double-digit increases.

The only exception was revenue for 5¡ slot machines, which declined 29 percent to $55.6 million.

Conversely, revenue for penny slots skyrocketed by 75 percent to nearly $100 million in January.

Poker continues to post solid gains as rooms reported a 29 percent increase in revenue to $13.2 million.

However, the popularity of poker may be peaking — either that or the supply has caught up with the demand — as the rate of revenue increases has tailed off over the past 12 months. Specifically, poker revenue in Nevada has increased 40 percent over the past 12 months, and 33 percent over the past three months.

Nevada sports books reported a slight 1.5 percent slide in revenue to $23.9 million, which reflected sports bettors continued ability to score well on football bets and parlay cards.

In January, sports books saw football revenues decline 13.8 percent to $14.6 million, while parlay card revenue slumped 22.5 percent to only 1.6 million. The hold percentage on parlay cards was 26 percent, which was about 10 percent below traditional levels.