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Las Vegas Gambling #'s Up a Little
May 2009 statistics released by the Nevada Gaming Control Board this week showed a moderating decline. Gaming revenues were down 8.34 percent in May and off 13.71 percent for the year to date, with revenue on the Las Vegas Strip down 6.36 percent for the month and down 15.31 percent for the year.
The May result compared with a statewide gaming revenue decline of 14.07 percent that was reported for April 2009.
"The revenues that came out today from Nevada indicated that the declines (on the Las Vegas Strip) weren't as large as some other recently reported declines," said Matthew Jacob, an analyst with Majestic Research. "I think there are some expectations out there that this is potentially the beginning of a recovery for the industry," he added. However, he cautioned that his firm's proprietary data were still not showing the kind of improvement that some investors expect to materialise in the next few months.
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Some casino stocks were still down as much as 80 percent or more over the past year and a half.
"We think recovery is going to take longer than maybe the more bullish investors are expecting," Jacob said.
Jeffrey Logsdon of BMO Capital Markets said in a client note that the statewide results were "clearly a less worse scenario" than the 13.7 percent decline seen in the year-to-date period.
"Our channel checks continue to confirm that Memorial Day weekend was full, albeit at promotional room pricing," Logsdon said.
JPMorgan's Joseph Greff said the Strip's results were the best since September 2008's 5.2 percent decline.
Nevada casinos won $889 million from gamblers in May, down 8.3 percent compared with their May 2008 win, the official figures revealed. The decline marked the 17th month in a row that the clubs reported declines. The slump persisted despite several Las Vegas events, including Jimmy Buffett and Dave Matthews concerts and the Manny Pacquiao-Ricky Hatton boxing match.
"With a weak month even with the amount of special events going on in Las Vegas, it indicates that we might not be at the bottom yet, that things are still declining at a pretty steep pace," Control Board analyst Frank Streshley said.
With one more month to report, casino winnings for the 2009 fiscal year total just under $10 billion so far - down 13.7 percent.
Gamblers wagered $12.6 billion during the month, including $10.1 billion in slot machine bets. The balance was wagered on table games.
The report also notes the state collected $50.8 million in taxes based on the May win. That was down 19.9 percent from a year earlier. The collections were the last for the fiscal year that ended June 30, and brought the tax total to $655.4 million, down 15 percent.
Streshley said the fiscal-year tax total was nearly $8 million lower than the figure projected only two months ago by Nevada's Economic Forum, whose estimates were used by state lawmakers in approving the state's budget.
A statewide game-by-game breakdown shows that casinos' slot winnings were off 12.9 percent. Thanks to big losses by baccarat players in Las Vegas, table games were up 1.1 percent compared with May 2008.
Slots accounted for $563.3 million of the total win. That included $260 million won by multi-denomination slots, down 8.3 percent. Penny slots were second, with a win of $156.7 million, down 0.4 percent.
Live games accounted for the balance of the May total. That included $96.2 million won from baccarat players, up 36.6 percent; $87.2 million won on blackjack tables, down 12 percent; $31.1 million on craps, down 18 percent; and $29.2 million on roulette, up 8.6 percent. Sports books won $5.6 million, down 11.4 percent.
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