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Las Vegas Strip Revenues Grow Despite Baccarat Drop

11 Apr, 2012

Despite a tough comparison period given the calendar shift of Chinese New Year, the Nevada Gaming Control Board announced this week Las Vegas Strip gaming revenues had increased 3.3 percent year-on-year to $530.7m in February.

Figures released on Tuesday showed that gross gaming revenues in Nevada rose by 5.7 percent year-on-year in February to $932.2m, with slot machine revenues at $571.6m and table gaming revenues hitting $350.6m.

Las Vegas Strip table revenues excluding baccarat for February increased 13.5 percent year-on-year with volumes up 0.9 percent and table hold improvement of 150bps. When including baccarat, total table gaming revenues dropped 1.8 percent to $288.1m.

Meanwhile, Strip slot machine revenues were up 10.3 percent to $236.7m on the back of a 5.7 percent rise in slot volumes.

According to Union Gaming analyst Bill Lerner, growth on the iconic Las Vegas Strip was driven by “an increase in ‘mass market’ Las Vegas volume, which was up 4.3 percent, a favourable calendar (extra day) as well as higher table hold, particularly baccarat”.

Although Lerner went on to add: “Using a normalised baccarat hold, Las Vegas Strip gaming revenues would have decreased 1.1 percent to $507.9m.” 

Reflected by the timing of the 2011 Chinese New Year in early February, baccarat volumes plummeted 33.9 percent year-on-year, which caused revenues to drop 18.9 percent to $113.9m. Luckily for casino operators, baccarat hold improved 270bps to 14.4 percent in February.

The analyst team at Union Gaming estimated that if baccarat hold was at a normalised rate, revenues from that game would have decreased 35.1 percent to $91.2m.

Meanwhile, Wells Fargo analysts noted that revenue from Downtown Vegas and the Las Vegas locals markets grew 14 percent and 12 percent respectively. Wells Fargo analyst Cameron McKnight wrote to followers: “While this should bode well for Boyd, we caution that these results may be a result of Boyd’s competitors offering heavy promotions at lower margins to drive revenue growth.”

Any hope for reoccurring locals growth was punctured by Union Gaming analysts, who told followers: “We believe the monthly Locals revenue numbers will continue to fluctuate on a monthly basis.”