Remove baccarat from the equation, and the first five months of 2019 don’t look so bad for Nevada and the Las Vegas Strip.
An unlucky month for the casinos that offer the volatile high-end game sent Nevada as a whole to the state’s single largest gaming revenue slide during five straight monthly losses in 2019.
According to numbers released Thursday by the Gaming Control Board, casinos statewide declined 6 percent in May after collecting $981.8 million from gamblers, compared to $1.04 billion in the same month a year ago.
On the Las Vegas Strip – which accounts for more than half of the state’s overall monthly totals – the results were even worse. Strip casinos saw revenues drop 11 percent during the month to $517.3 million, compared to $581.7 million in May 2018.
Analysts said to put the blame on baccarat.
During May, the game – primarily favored by high-end customers from Asian markets at a handful of Strip casinos – saw revenues decline 54.8 percent in May. That decline, $66.2 million, was slightly larger than Nevada’s total monthly decline.
“That was pretty much May in a nutshell,” said Michael Lawton, the control board’s senior research analyst.
The amount wagered on the game was down 3.3 percent for the month, but hold percentage was 7.55 percent, versus 16.1 percent in May 2018.
Simply put, players beat the house.
Deutsche Bank gaming analyst Carlo Santarelli told investors that, under a normal hold percentage, Strip gaming revenue would have been down roughly 1 percent in May. Macquarie Securities gaming analyst Chad Beynon the hold percentage was the lowest on the Strip in six years.
Lawton went further than that. Without baccarat, he said, Nevada casinos as a whole would be up 1.6 percent through May, and the Strip would be up 2.4 percent.
The actual numbers, however, show Nevada down 2.3 percent for the first five months of the year, with the Strip down 4.9 percent for the same five months. Strip revenues have actually fallen six straight months, counting declines from last December.
Still, Nevada is not throwing in the towel on 2019.
Lawton said slot machine revenues statewide increased 1.5 percent in May, to $679.7 million, while the total volume of $9.8 billion was up 3.6 percent over last year. Slot revenues have increased in eight of the last nine months, while volume has grown nine out of the last 10.
Beynon said the non-baccarat trends on the Strip were stable and casino are still expressing a positive outlook despite “low-growth” room booking trends over the last several months.
“Free and independent travelers and the transient side of the business seem to be trending well, which we expect to translate into solid second quarter hotel trends,” Beynon said. “This will lead to higher food and beverage spend, which has been the trend over the last several quarters for operators.”
The Las Vegas Convention and Visitors Authority said Thursday visitor volume grew 1.7 percent to 3.69 million tourists during May, which was helped by a 6.5 percent growth in convention attendance. Citywide occupancy was 90.8 percent during the month, which included increases in both mid-week and weekend visitation.
The city’s average daily hotel room rate was $140.52 in May, up 5.1 percent from last year, while revenue per available room – a metric used by analysts to gauge profitability – grew 6.7 percent to $127.59.
Northern Nevada
Reno gaming revenues increased for the second straight month, up 3 percent to $55.2 million, while Washoe County as a whole was up 2.3 percent. South Lake Tahoe revenues increased 11.5 percent in May.
For the first five months of the year, both Reno and Washoe County are down less than 1 percent.
“Winter has not been kind to Northern Nevada,” Lawton said. “In Northern Nevada, May was still winter.”
Sports betting
For the first time since legal sports betting was launched in the U.S., New Jersey casinos and racetracks had a larger sports gambling month than Nevada in terms of wagering activity.
Nevada casinos saw wagers of $317.6 million in May, a less than 1 percent increase, while New Jersey sports books took in $318.9 million in wagers. Nevada revenue was $11.3 million, a decline of 45.1 percent. New Jersey sportsbooks collected $15.5 million in revenue.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.
