Revenues set record in 2006

Feb 13, 2007 2:13 AM

Fueled by nine months of a billion dollars or more in winnings, Nevada casinos last year won $12.6 billion from gamblers, surging past 2005’s record by 8.3 percent.

Slots and table game play was solid statewide with slot revenues eclipsing $8.3 billion, a 6.9 percent increase over 2005, while table games raked in $4.1 billion, 11 percent more than the previous year.

Sports books, which are enjoying one of their best football seasons ever, won $191 million from bettors in 2006, a 51 percent increase over 2005. Equally important, books held a solid 7.9 percent of the handle, up from 5.6 percent the previous year.

As noted, football has been a boon for bookies. December’s sports win — based mostly on football and parlay card bets — topped $26 million, a phenomenal 7750 percent more than the $39,000 won by books a year ago.

Of course, last year’s football season was an aberration as winning favorites demolished Nevada bookmakers. It’s a different story this season as sports books are 125 percent ahead of last year’s football win total.

Other solid producers in Nevada casinos last year were the blackjack tables, which collected $1.3 billion from players, an 11 percent increase over 2005. And baccarat continued to post huge gains for the state’s casinos, which earned $836 million from the game in 2006, an increase of 25.6 percent.

While poker play remains robust in most locations, there are signs the boom has peaked. Last year Nevada card rooms raked $160 million from pots, a 14 percent increase over the previous year.

But the 14 percent increase was significantly less than the 42 percent and 44 percent increases recorded in 2005 and 2004, respectively.

In December, poker rooms collected $14.4 million from players, just a 6.5 percent increase from the $13.5 million they collected in December 2005.

Slot winnings represented 66 percent of total gaming win, with the bulk of play now concentrated on penny machines and multi-denominational machines.

One slot trend that has players concerned is the casinos’ win percentage, or amount the machines hold. This is often referred to as how "tight" or "loose" the machines can be.

Last year’s slot hold topped 6 percent for the first time ever, making machines the tightest they’ve been in modern times.

Over the past five years, slot machines’ collective hold percentage has increased, on average, by about 2.3 percent annually.

Frank Streshley, who compiles gambling figures for the state’s Gaming Control Board, says 2006 ended with strong overall performances in November and December. November was the second-best month for gaming win in the state’s history. Casinos collected more than $1.14 billion, just $100,000 less than the record set in January 2006.

In December, casinos won $1.062 billion, a 17 percent increase over December 2005.

Meanwhile, the Strip, with less capacity in 2006, continues to eat a larger and larger share of the statewide market. Strip casino win now represents 53 percent of the statewide industry’s total take, this despite closings last year of the Boardwalk in January and the Stardust in November.

Downtown lost the Lady Luck but the Clark County market overall also gained Station Casinos’ Red Rock in April. But growth in capacity is not what is leading the way.

"We’re kind of in a lull in major expansions," Streshley said. "The opening of the Palazzo (in 2007) will usher in a new round of openings. This growth is not being fueled by growth in capacity."

Streshley expects the industry will remain robust for the foreseeable future. January numbers are already looking strong from the frenzy of tourism surrounding the Super Bowl.

February will also see healthy numbers, Streshley said, because of the Chinese New Year and the NBA All-Star weekend falling into the same time frame.