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Nevada: revenue slide eases in June

Aug 19, 2008 7:04 PM

By David Stratton | The Nevada casino industry finally received a bit of good news … well, at least it wasn’t too bad.

Revenues for June slipped to $949.3 million, a modest 1.1 percent compared to June 2007 and, even though it was the fifth straight month of declining revenues, it was a better result than the 15 percent drop recorded in May.

Moreover, there were indications that casino play has begun to pick up in some jurisdictions, according to figures released last week by the state’s Gaming Control Board.

For instance, even though gaming win on the Las Vegas Strip was down 3 percent to $486.4 million, Southern Nevada as a whole (all of Clark County) actually posted a 2 percent year-over-year increase in gaming win.

Areas that did particularly well in Southern Nevada include downtown Las Vegas, which saw revenues increase 10 percent, North Las Vegas, up 41 percent, Boulder Strip, up 25 percent, and the balance of the county, up 3 percent.

The picture was bleaker in Northern Nevada, where revenues slipped 19 percent in Reno, and 25 percent in both North and South Lake Tahoe.

Some experts theorize that the boost in gaming activity in the Las Vegas "locals" market was partly the result of government bonus checks.

For the first half of 2008, Nevada gambling revenue is down about 2 percent, with the Strip off about 1.5 percent.

Also reported last week was a 3.1 percent drop in visitor volume to Las Vegas, according to the Las Vegas Convention & Visitors Authority.

The drop-off in June contributed to a year-to-date decline of 0.5 percent in visitor traffic.

Hotel occupancy was off 2.5 percent for the month, even though hotels dropped their room rates by an average of 16 percent in June.

A breakdown of gaming revenue reveals slot play resulted in a gaming win of $664 million, 5.4 percent better than a year ago, while table game win was sown 13.9 percent to $268.5 million.

Casino operators were encouraged by the increase in slot win, although the totals benefited from a quirk in accounting – slot win from May 30-31, both weekend days, were included in the June results.

"As such we believe the slot win was artificially high this month," said Joe Greff of J.P. Morgan. "After adjusting for this issue results on the Strip were down 5.1 percent year over year."

Slot win was bolstered by a 21 percent in revenue from penny slots, while all other denominations posted drop-offs in revenues.

Surprisingly, poker room revenues were down 8 percent statewide and 6 percent on the Las Vegas Strip, surprising since the World Series of Poker was in town with supposedly record numbers of participants.

Nevada’s race books continued to see pari-mutuel betting slip as revenues were down 16 percent to $6.8 million.

Sports books, however, posted a 1.7 percent increase to $7.4 million statewide, even though the win from baseball bettors was off about 28 percent for the month.

The only other sports action in June was NASCAR, golf, arena football and the tail end of the NHL playoffs, which collectively accounted for revenues of $2.2 million, an increase of 210 percent over June 2007.

Maybe fans really do bet on NASCAR.