Nevada: No recovery yet

“We hit the bottom and are slowly climbing out,” contends Nevada Gaming Control Board analyst Frank Streshley, trying to put the best spin on a flat March. There were definitely some silver linings. Who’da thunk Laughlin (2.5%), Reno (5%) and hard-hit Lake Tahoe (7%) would be growth markets? Or that Mesquite casinos would outgross downtown Las Vegas?

However, the locals markets continue their downward drift, testimony to how hard the average Las Vegas has been hit by the Great Recession. If you get away from the Strip and drive around, the economic toll is staggering, I assure you. The Strip is acting as a life preserver but the good news there is concentrated in high-end play and March Madness. Higher win in baccarat (59%) and other table games (6%) was virtually negated by weak drop elsewhere. Slot revenues (+0.1% on -5% drop … hmmmmm) were flat — but even that may have been buoyed by a quirk of Nevada revenue reporting wherein last-minute February slot drop is counted toward March’s tally.

In the Las Vegas Sun story, some of whose numbers I’ve been unable to square with those reported by J.P. Morgan, great depths are plumbed to find positive metrics. But if $100 slots saw an 113% increase in play, how significant of a segment is that, really?

At least Vegas visitation and room rates continue to creep incrementally upward, so let’s call that a recovery of sorts. (If there’s a “jobless recovery,” can there be a “winless recovery”?) Unfortunately, having CityCenter plopped onto the hotel market meant backward progress (-3.5%) on occupancy. It should also be noted, just for the record, that the visitation increase for March is about a tenth of what MGM Mirage CEO Jim Murren said CityCenter would be stimulating, an underperformance that contributes to CityCenter’s growing reputation as a nonevent.

The drive-in markets of Mequite and Laughlin suffered for attendance, even as Las Vegas enjoyed a boost from California motorists. However, from a financial standpoint whatever comeback we’re seeing is being driven at the top end, whilst everyone else tightens their belts. It’s unclear if casino poobahs have resigned themselves to the realization that the go-go years of 2005-07 were but a bubble … but they’re doing the best thing possible under the circumstances: busting out a slew of bargains.

The high-value players may be economically inured against the Great Recession but the rest of us could use every incentive we can get. Which the money-grubbing “resort fee” practice more perverse than ever — but casino executives seem convinced we’ll get used to bending over for such indignities. And it appears we will.