November gaming revenues rise 7.1 percent statewide, 9 percent on the Strip

A gradual recovery for the Strip seems to be taking place, where gaming revenues have grown 5.2 percent over the past 11 months compared with the same time period in 2010.

But Wall Street researchers following the financial side of the gaming industry want to see a more prolonged and well-rounded upswing.

Nevada casinos collected more than $880.1 million in gaming revenues during November, a nearly 7.1 percent increase compared with $822.1 million collected in the same month a year ago, according to figures released Wednesday by the Gaming Control Board.

On the Strip, casinos reported gaming revenues of $495.3 million, a 9 percent rise compared with $454.3 million collected in the same month of 2010.

The Strip’s increase was driven by revenues collected from high-end baccarat players. Still, when the game’s results are subtracted from the mix, Strip revenues increased 5.4 percent.

“We would caution investors from reading too much into the 9 percent headline number, as it was aided by above average baccarat and craps hold,” Stifel Nicolaus Capital Markets gaming analyst Steven Wieczynski said in a research note.

“Looking beyond November’s somewhat tepid results, we continue to believe a recovery in Strip lodging trends, paced by improved convention and group mix, will serve as the primary driver of improved Strip operator health,” Wieczynski said.

During November, Strip casinos collected $89 million from baccarat, an increase of 29.3 percent compared with November 2010. The amount wagered on baccarat was $653 million, an increase of 14.9 percent, while the casinos hold percentage on the game was 13.6 percent in the month, up from 12.1 percent last year.

Slot revenues on the Strip grew
2.6 percent to $261 million while the amount wagered on slot machines was up 0.03 percent. Slot machine wagering has increased on the Strip in eight of the past nine months.

Macquarie Securities gaming analyst Chad Beynon said slot handle is typically a good indicator for nongaming spending and hotel fundamentals.

“While the headline growth rate of
9 percent is strong, we again would have liked to see a more broad-based growth story across all segments,” Beynon told investors. “In particular, the fact that slot handle was basically flat year-over-year was somewhat disappointing given the positive trends over the past two months. We will be interested to see whether this slowdown in slot volumes flows through to the non-gaming revenue in November.”

The special event calendar was flooded during November, including several concerts, a championship fight between Manny Pacquiao and Juan Manuel Marquez, and the final table of the World Series of Poker.

Gaming revenues in Clark County as a whole were up almost 8 percent, fueled in part by the Strip and downtown Las Vegas, where casinos saw gaming revenues increase more than 7 percent. November marked five consecutive months for increased wagering on slot machines and table games at downtown casinos. For the first 11 months of the year, downtown gaming revenues are up 2 percent.

Casinos on the Boulder Strip and Henderson reported a gaming revenues increase of 12.4 percent.

Laughlin and North Las Vegas were the only areas of Clark County reporting gaming revenue declines in November.

Statewide, gaming revenues are up
2.9 percent for the first 11 months of 2011.

JP Morgan gaming analyst Joe Greff said the Strip’s November performance reflected a continued strengthening of gaming trends.

“We think this is a positive sign for 2012 given our expected increases and improving mix shift in the convention and group business as well as stronger travel and leisure segment trends, partially driven by the better-than-expected event calendar throughout the year,” Greff told investors. “Looking ahead, we believe our gradual recovery thesis for the Las Vegas Strip remains intact.”

Nevada collected $57.3 million in gaming taxes during December, based on the November gaming revenues, a nearly 15.2 percent increase compared with the same period a year ago. For the first half of the fiscal year, gaming tax collections are up less than 1 percent.

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871. Follow @howardstutz on Twitter.