Nevada: “Cautious optimism”

That’s how UNLV‘s gaming guru, Prof. David G. Schwartz, describes his reaction to the October revenue numbers, released today. The 11% autumnal bounce may be less notable for the fact that the Strip was up 16% than the fact that there was a big increase in Reno (8%), of all places. Wells Fargo analyst Carlo Santarelli sees particularly good news for Boyd Gaming in the data, since the Boulder Strip market improved 3% and Downtown experienced a 10% boost. Even the troublesome “balance of Clark County” category, which includes hard-hit Primm, was 9% up. Sparks took a hard thumping, -10%, but in Mesquite even a 1% decline is a victory of some sort, given how devastated that market has been. As S&G likes to reiterate, as Wendover goes, so goes Nevada … and that Checkpoint Charlie between Nevada and Utah sustained an 8% increase.

At the risk of sounding all Pollyanna, the numbers may be even better than they look, since October ended on a Sunday, meaning that Halloween weekend slot drop probably won’t show up until the November report is issued. (It’s an eccentricity of financial reporting that appears to be unique to Nevada.) Both slot revenue and handle rose on the Strip — “a small but perceptible bump,” as Schwartz calls it — where the one-armed bandits have been slacking off this year. J.P. Morgan’s Joseph Greff deems today’s a positive for Venelazzo and Wynncore … but most of all for MGM Resorts International, “given its leverage to LV Strip trends.”

Even though the Strip’s mainstay, baccarat players, tightened their purse strings in October, wagering 31% less dough, they had extremely bad luck, which translated to a 41% increase in casino win. Mainstream table games also were robust, up 26% from last year, partly on the strength of heavier wagering. It looks as though the Silver State finally hit bottom in June and can, at long last, be said to be on the rebound. Santarelli’s charts show a ski-slope-like pattern of overall casino revenues and a bumpier — but generally upward — trajectory of table win.

I feel like Debbie Downer compared to gaming consulting Jonathan Galaviz, who’s positively ecstatic over the latest data: “Some pundits may point to certain events occurring in October, or attribute the gain to some kind of ‘seasonality.’ We believe an increase of 16% cannot happen for any other reason than improving macroeconomic fundamentals.”*

Galaviz advocates “a true Asia strategy” to further increase play derived from the Pacific Rim and capitalize on the strength of Asian currencies. He attributes the recent improvements in Strip revenue to “marketing, promotions, and better uses of technology for customer relationship management.” He gets a little carried away on the economic-diversification front. True, Zappos.com was induced to move Downtown, thanks to Mayor Oscar Goodman‘s persuasiveness — and a taxpayer subsidy (plus a sackful of public money thrown in Cordish Co.’s direction to induce it to vacate the necessary acreage). But as for saying, “Zappos.com sees Las Vegas as a hotbed for creativity, innovation and technology,” let’s not go overboard, OK? One dot-com does not a technology boom constitute. (Although that doesn’t preclude other sorts of Downtown renascence.)

Preferring to err on the side of caution, Dr. Schwartz notes that statewide slot handle is flat. He also warns that increases in all categories of play were propelled by higher hold percentages, saying that actual slot play on the Las Vegas Strip is “slightly growing” and the Strip accounted for 77% of all revenue increase statewide. Boulder Strip casino slot play was actually 5% but a good month at the tables more than compensated. Schwartz’s breakdowns, incidentally, are considerably more transparent than the bare-bowns data handed down by the Nevada Gaming Control Board and constitute a superior barometer of the state’s casino climate.

(* — if Galaviz is indeed correct, a whole lot of conventional wisdom, promulgated by Steve Wynn among others, about the U.S. economy and the government’s stimulus effort is going to have to be rewritten.)

And if all that …

… isn’t sufficient to make your day, here’s some cute kitten footage that a reader forwarded to me. What more do we need?

Trivia question: Three of the 10 post-Truman presidents had lower approval ratings at the 22-month mark than the current POTUS. Can you name them? Hint: One of the three might comes a huge surprise, given his reputation for popularity.