A consumer economic report released Monday suggests the economic slowdown that has befallen the Las Vegas gaming industry has showed signs of bottoming out.
The report from Las Vegas-based Majestic Research predicts the rate of decline in casino revenues – which has eclipsed double digits in recent months – will be lower in the first quarter of 2009 compared to the fourth quarter of 2008.
"While modest improvements such as these do not indicate a bottom, they could be potential first steps to a much-awaited economic recovery," said John Aiken, managing director at Majestic Research.
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Aiken added that some of the "positive trends" are the result of active promotion from mid-market Las Vegas casinos.
"The improvement likely reflects easier comps for the mass market properties relative to higher-end properties," Aiken said. "However, we think this could be an early sign that trends are bottoming out in Las Vegas as the value-conscious visitors who were priced out earlier in the downturn may be responding to the bargain room rates that are being offered by the mass market properties."
Other factors that contribute to a somewhat healthy prognosis for the gaming industry are early reports of positive gains in venues outside of Nevada. They include:
• Pennsylvania reports a 9.4 percent increase in casino revenues for March. Slot machine play generated more than $155 million in revenues for the state’s seven operating casinos. Two new casinos are expected to open this year, as well as two expansions at casinos currently in temporary facilities.
• West Virginia gaming revenues increased 2.6 percent in March, due to the addition of table games to a third casino compared to two last year. Overall, slot revenues were up about 1 percent in West Virginia.
• Gaming revenue in Maine increased 31.3 percent in March. Net gaming revenues reached $4.7 million at Penn’s Hollywood Slots, with a gross revenue of $55.1 million compared to $47 million a year ago.
• New York’s racinos saw its video lottery terminal (slots) revenue increase 11 percent to $81.2 million in March. Most of the state’s operators enjoyed double-digit gains, ranging from 13.5 percent to 18.2 percent. Only Monticello and Saratoga had year-over-year declines of 1.3 percent and 1.4 percent, respectively.
Gaming revenues for Nevada casinos in March won’t be published until May 10. On April 10, the state’s Gaming Control Board will release its revenue report for February.