Nevada’s stunning $1.066 billion gaming revenue total for March, especially the Las Vegas Strip’s $501.4 million contribution, had the investment community buzzing. The overall figure, the state’s largest single-month revenue total in more than eight years, happened despite COVID-19 operating restrictions and capacity limitations.
The results reported from the Las Vegas locals markets were equally as impressive.
Boyd Gaming CEO Keith Smith admitted he was somewhat taken aback by the state’s monthly revenue report. “Those numbers did surprise me,” Smith said.
Shutterstock/Boyd Gaming’s Suncoast Casino in western Las Vegas near the Summerlin community.
Gaming analysts concurred.
“We knew March was going to be good, but the Las Vegas locals numbers were better than good,” Union Gaming Group analyst John DeCree said of the collective casino markets that cater to Southern Nevada residents in North Las Vegas, Henderson, and unincorporated regions in Clark County.
Combined, the properties scattered throughout the Las Vegas Valley produced $256.5 million in gaming revenue, eclipsing the previous record of $241.5 million from January 2007. According to the Nevada Gaming Control Board, three Clark County reporting areas recorded single-month gaming revenue records in March.
“What is more impressive is that several casinos in the locals market were still closed and those that were open were operating at 50% capacity,” DeCree noted.
Boyd Gaming’s locals casino business saw a less than 1% revenue increase in all of the first quarter. Smith said Tuesday that business levels companywide increased slightly in January and February, “but it was March where we really benefited from improving trends.”
Smith noted the month is traditionally one of the year’s best for Las Vegas. Several factors play into the calculation, such as high visitation from the spring-break crowd, college basketball fans wanting to gather for the NCAA’s March Madness tournament, and Midwest and East Coast customers looking for a change as winter temperatures begin to die down.
Downtown Las Vegas, which draws locals in addition to tourists, recorded $71 million in gaming revenues during March, a single-month record. A year ago March, casinos throughout the state began a 78-day closure in the middle of the month due to the pandemic. Downtown’s 67.2% increase this March included the full power of Circa Casino Resort, which opened at end of last year.
Boyd operates three downtown casinos, but only two of the properties are open due to the lack of Hawaiian customers. Smith said their frequent visitation has been “severely restrained by travel restrictions.”
Downtown casinos, Smith said, “do well when the Strip does well.” Tourism surveys have found that at least 50% of Strip visitors plan a trip to downtown Las Vegas during their stay.
Gaming analysts have long suggested the Las Vegas locals market – and downtown Las Vegas – be viewed in the same vein as regional gaming markets, which rely on a heavy drive-in customer base seeking gaming and other entertainment.
Truist Securities gaming analyst Barry Jonas expects the Las Vegas locals properties to see another jolt in business this weekend when COVID-19 capacity limits are increased from 50% to 80%.
Non-gaming attractions are also returning with greater bandwidth to the locals properties. Restaurants inside casinos are expected to expand operation hours to coincide with increased capacity. The relaunch of other casino-housed amenities, such as movie theaters, is also planned.
“March figures were above already-high expectations and lend to a sooner and more robust leisure and weekend-driven recovery than we believed,” Jonas said. He said the regional markets, much like the Las Vegas locals casinos, benefit less from convention and group business exposure – a key business element still absent from the Las Vegas Strip.
Boyd Gaming grew revenues almost 11% in the first quarter of 2021, due largely to a 23% increase at the company’s regional casinos in the Midwest and Southern markets.
But Boyd’s numbers boosted the notion that the results could be replicated by other casino operators that draw their business from drive-in customers. Red Rock Resorts, which operates only in Nevada, and regional gaming giants Caesars Entertainment and Penn National Gaming report first-quarter results next week.
Casinos were initially the only entertainment provided in some communities once businesses began re-opening last summer.
“The big question, for the sector, is the sustainability of this strength, which, to be fair and honest, is unknowable in that the consumer has had limited alternatives with casinos, in some respects, the only outlet in town,” said J.P. Morgan gaming analyst Joe Greff.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
