Las Vegas still recovering

Jun 11, 2002 12:17 PM

Las Vegas has recovered from last September’s attacks far faster than most economists had predicted, as evidenced by the positive numbers recently reported by the Nevada Gaming Control Board for the month of April.

But, still lagging, points out highly-respected gaming analyst Jason Ader of Bear Stearns, is the high roller business. That segment, he wrote following the April report, "continues to be challenging on the Strip,"

Ader noted that the Strip properties recorded a decline of 24% in baccarat drop during the month. But, the hold was the saving grace.

"Baccarat hold percentage was abnormally high during the month at 22.6%, a 790 basis points increase from last year," he wrote, adding that this "contributed to a 17.1% increase in total baccarat revenues."

The company that more likely benefited from the favorable baccarat win, Ader said, was MGM MIRAGE Inc. (MGG), "especially since it hosted a few high-end events during the month."

In total, gaming revenues on the Las Vegas Strip increased 2.6% to $381.5 million. Statewide, gaming revenues increased 3.1% to $800 million.

"Going forward," Ader concluded, "May comparisons should be difficult for the Strip, as May 2001 increased a stellar 11.9%." But, he added, he remained positive on the longer term fundamentals of the Las Vegas Strip.