{"id":29325,"date":"2021-02-25T09:49:58","date_gmt":"2021-02-25T17:49:58","guid":{"rendered":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/?p=29325"},"modified":"2023-09-26T14:57:26","modified_gmt":"2023-09-26T22:57:26","slug":"vegas-locals-strong-strip-stinks-economic-boom-foreseen","status":"publish","type":"post","link":"https:\/\/www.lasvegasadvisor.com\/blog\/vegas-locals-strong-strip-stinks-economic-boom-foreseen\/","title":{"rendered":"Vegas locals strong, Strip stinks; Economic boom foreseen"},"content":{"rendered":"\n
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Even with $600 extra in their pockets, gamblers could not be lured back to the Las Vegas Strip<\/strong> last month. Strip revenues of $321.5 million represented a 44% implosion from 2020. Statewide, the falloff was 26.5% to $762 million. Once Nevada<\/strong> casinos become diversified destinations again recovery is inevitable but we’re hardly there yet. At least Las Vegas<\/strong> locals were generous with their play: off only 6.5% from one of the two biggest months in American gaming (February 2020 being the other). True, casino capacity was capped at 25% but that didn’t keep the locals away\u2014and their play may have been even stronger than it looks ($200 million), slot revenue from the final weekend not having been reported yet. JP Morgan<\/strong> analyst Joseph Greff<\/strong> struck a hopeful note: “Given improved vaccination rates, slower COVID-19 new case trends, and increased capacity limits, we think this month likely marks the bottom of LV Strip [gross gaming revenue], and we expect CZR to confirm this on tonight\u2019s earnings call.”<\/p>\n\n\n\n

Things could hardly get worse. Last month, McCarran International Airport<\/strong>‘s traffic cratered -64%. International travel (see baccarat results, below) plummeted 93%. Spirit Airlines<\/strong> held its market share best, off 40%, while Southwest Airlines<\/strong> was down 61% despite having a vast lead in volume. As for the small(er) fry, American Airlines<\/strong> dropped 59%, followed by Frontier<\/strong>‘s 64% and Delta<\/strong>‘s 68%.<\/p>\n\n\n\n\n\n\n\n

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As for January, Strip slot win fell 38% ($179 million) on 35.5% less coin-in and looser hold. Baccarat was a disaster, with the house winning 74% less and players having luck on their side, as wagering was down ‘only’ 49%. The house had better fortune on non-baccarat table games, winning 35% despite 44% lowering wagering. Locals slot win was down 9.5% on 6% less coin-in. Circa<\/strong> does not seem to have goosed Downtown<\/strong> long-term. Metro revenues were $49 million, a 17% slippage. The Boulder Strip<\/strong> dipped 8% to $66 million, while North Las Vegas<\/strong> stumbled 21% to $21 million and miscellaneous Clark County<\/strong> was off 11.5% to $18 million. Mesquite<\/strong> grew 6% to $13 million and Laughlin<\/strong> tumbled 27.5% to $33.5 million (still better than the entire state of Illinois<\/strong> combined). Reno<\/strong> outperformed by 2%, grossing $48.5 million. Other outstate jurisdictions did notably well, with Elko<\/strong> vaulting 26% to $32 million and Carson City<\/strong> up 13% to $10 million. Lake Tahoe<\/strong> was off 11.5% to $18 million while Wendover<\/strong>, on the opposite side of the state, leapt 23% to $22 million. Thank God for Mormonism.<\/p>\n\n\n\n

There are hopeful economic auguries, albeit not in gaming. “Ramming Speed” exclaimed Credit Suisse<\/strong> analyst Ben Chaiken<\/strong> when he saw the latest revenue numbers from Royal Caribbean Cruise <\/strong>Lines. Autumn\/winter prices are above 2019 levels and bookings are 30% higher. “Not only do these trends show the robustness of pent-up demand, but they also poke a hole in the bear thesis that older cruisers won\u2019t return,” wrote Chaiken. Casino execs can but hope that this forecast extends to their business trends as well. With the latest stimulus package (strongly supported by the American Gaming Association<\/strong>) moving quietly but swiftly through Congress and vaccinations ramping up, some economists are predicting a coming boom in the gross domestic product, above pre-pandemic levels. <\/p>\n\n\n\n

\u201cThat\u2019s a particularly remarkable outcome, especially when you consider that [post the Great Recession of 2007-09], the U.S. economy never really returned to its prerecession path,\u201d Morgan Stanley<\/strong> Chief Economist Chetan Ahya<\/strong> wrote in an investor note. Ahya’s not alone. According to a wire-service story, “Barclays<\/strong>, Morgan Stanley<\/strong> and Oxford<\/strong> all forecast about 6.5% growth this year,\u00a0which would be the best since 1984. Goldman Sachs<\/strong> is looking for a 7% advance.”<\/p>\n\n\n\n

The only sour note is that the recovery could be so strong that it will supercharge inflation, leading to another recession. Can’t win for losing. And Covid-19<\/strong> plus its mutations remains a wild card. While gaming hasn’t really benefited from the last stimulus package (yet), retail has: Sales are up 5%, particularly of big-ticket items. \u201cThis year is going to start off much stronger because of consumer spending,\u201d said Oxford Chief U.S. Economist Gregory Daco<\/strong>. We put more stock in vaccinations than herd immunity but whatever gets us back to normality is no bad thing. Economists project that 56% of jobs lost to the pandemic will be recovered, half of them this year. The exception to this wave of good news (resorts, take note) is the restaurant industry, where 100K have been lost, although as many as 75% are expected to replaced over the next two years. <\/p>\n\n\n\n

But there’s good news for sports betting. Out of Costa Rica<\/strong> (sorry, Bill), comes a dispatch that soccer\u2014football to most of you dear readers\u2014is the new hot ticket amongst U.S. bettors. With the run-up to the World Cup<\/strong> telescoped by the pandemic, there’s plenty of matchplay, starting March 24. Champions League<\/strong>, English Premier League<\/strong>, Series A<\/strong> and Bundesliga<\/strong> have become staples of American TV. Said bookie Nate Johnson<\/strong>, “Make no mistake. Soccer has a long way to go before it approaches the action on football, basketball, or baseball. But the rise in betting activity is encouraging. Not only that, new soccer league seasons start at the end of August, and 2022 is a World Cup year. So our bookie software agents have reason to be bullish on soccer betting action.”<\/p>\n\n\n\n

Punters were certainly lively in Tennessee<\/strong>, where January handle hit $211 million, with OSB operators keeping $22 million in revenue. The results are doubly impressive because the Volunteer State’s online-only model and 10% hold were the source of some early skepticism. Super Bowl<\/strong> wagering was $15 million, with books winning $3 million, according to preliminary data. According to PlayUSA<\/strong>, early mover BetMGM<\/strong> is cleaning up, posting $70 million in January handle. Even better times may be ahead. Concluded analyst Jessica Welman<\/strong>, “The Tennessee Lottery<\/strong> realizes the appeal of legal betting pools in a state obsessed with college sports and March Madness<\/strong>, so it will do its best to get that approved in time for the Big Dance.”<\/p>\n\n\n\n

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Churchill Downs<\/strong> previewed 4Q20 numbers and cash flow looks slightly better than expected, despite the closures of key casinos. Tracks Arlington Park<\/strong> and Oak Grove<\/strong> drove the upside, plus there are anticipated tailwinds in the form of new historic-racing-machine legislation in Kentucky<\/strong>, clearing the way for resumption of Turfway Park<\/strong>. CHDN is putting all its chips (wisely) on Rivers Casino Des Plaines<\/strong> and selling Arlington International Racecourse<\/strong>. Online wagering brought in $94 million, benefiting from a 45% increase in handle, even though the horse racing calendar was a bit sparse. <\/p>\n\n\n\n

Jottings<\/em><\/strong>: That metal detector at the entrance to Philadelphia Live<\/strong> has been removed. No word on the one at Maryland Live<\/strong> … Former Atlantic City<\/strong> mayor Don Guardian<\/strong> has withdrawn his chapeau<\/em> from the state-senate race in Atlantic County<\/strong>. Doing a 180, the stylish Guardian will run for assemblyman, as originally planned … Now that Trump Plaza<\/strong> is going, going, gone, what will fill the former eyesore’s place<\/a>? At a billion-plus, a new casino seems out of the question and Trump Dump owner Carl Icahn<\/strong> is a man with an eye to the main chance, not a developer. Icahn has some pull with Caesars Entertainment<\/strong> and could finagle an expansion of Caesars Atlantic City<\/strong> into the space, although its financial foundations need to be shored up first, one would think.<\/p>\n","protected":false},"excerpt":{"rendered":"

Even with $600 extra in their pockets, gamblers could not be lured back to the Las Vegas Strip last month. Strip revenues of $321.5 million represented a 44% implosion from 2020. Statewide, the falloff was 26.5% to $762 million. Once Nevada casinos become diversified destinations again recovery is inevitable but we’re hardly there yet. At […]<\/p>\n","protected":false},"author":83928,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[1728],"tags":[],"jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/posts\/29325"}],"collection":[{"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/users\/83928"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/comments?post=29325"}],"version-history":[{"count":0,"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/posts\/29325\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/media?parent=29325"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/categories?post=29325"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/tags?post=29325"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}