A friend recently posed to me the question of how Nevada‘s casino revenues can be so anemic at a time when casino floors appear so crowded (only 100K fewer visitors in April 2009 than two years earlier). I’m coming around to the school of thought that consumers have fundamentally changed their spending habits but that casinos haven’t wised up to this.
Even with — thanks to a quirk of Silver State law — slot revenues from the end of April rolled into May’s results, the latter weren’t anything about which to crow. For the state as a whole, only three months in 2009 posted lower grosses than this May’s $847 million. The Strip’s $450 million (-6%) was middling by last year’s standards but the locals market remains anemic, despite harbingers of recovery in Downtown (flat), on the Boulder Strip (6%) and in North Las Vegas (8%). Outlying markets such as Laughlin (-5%) and Reno (-7%) continue to struggle, while Lake Tahoe — which has the second-lowest gross of any Nevada submarket — is so diminished you wonder why they even bother up there.
(Strange but true: The owners of the Siena Casino Hotel Spa, who can scarcely make payroll at their own joint, want to reopen the recently shuttered Club Cal Neva. I’m not sure which is the more delusional notion: adding more casino inventory to Lake Tahoe or entrusting the task to a company that’s barely solvent.)
Tightening the slots, as well as the belated reportage of late-April revenues, meant a rare 4% bump in Strip win for the one-armed bandits. Luck wasn’t with the casinos at their tables. There, once baccarat win was factored out, revenues fell 2%. Sports books got hammered, too. While I expect May 2010’s visitation numbers to be an improvement on last year’s, that will only widen the disconnect between what we see and what the cash register tells us.
“Tightening the slots, as well as…” I know that there’s a lot of suspicion that slots have been tightened all over, but is there any proof? Just curious.
Good timing? From yesterday’s LVA news:
“• July 6, 2010 New Chillout Spot: Minus5 Ice Bar is set to debut a new Las Vegas venue this August at the Monte Carlo, to complement the existing venue at Mandalay Place. The 1,200-square-foot ice-encased room will feature a bar, tables, benches, walls, and glasses all made from ice.”
“dropping only a fraction of the cash in the clubs as what could be made at a packed low-minimum craps table.”
Too bad the Downtown operators can’t get together & put together an ad campaign focusing on those kinds of strengths.
J.P. Morgan reported increased slot revenue on lower drop (i.e., coin-in) and higher hold percentages. Sounds like tightening the slots to me!
Interestingly, Venetian brass once admitted — on a conference call, no less — that their slots “held” one or two percentage points higher than Wynn LV’s (this was a couple of years ago, so maybe things have changed). Great way to chase those customers off!