Nevada gaming revenues fell for the second straight month in August, which wasn’t a surprise given all the negative noise coming from casino operators and the investment community about depressed third quarter results in Las Vegas.
The Gaming Control Board said Thursday the state collected $912.9 million in pre-tax gaming revenue in August, a decline of 7.74 percent compared to the same month a year ago. Las Vegas Strip numbers fell 12.4 percent to $477.9 million. Before July’s decline, gaming revenue grew for five straight months.
“While there was no consensus estimates for August revenues, expectations were extremely low across the board,” said Credit Suisse gaming analyst Cameron McKnight. “We think a negative 12.4 percent headline is better than expected.”
For the first eight months of the year, gaming revenues statewide are up 2.1 percent.
On the Strip – which accounts for more than half of the state’s overall total – total table game revenue declined almost 23 percent while slot revenue was down 1.3 percent. Nevada sports books collected $12.6 million in gaming revenue in August, marking the 61st consecutive positive month for casinos.
In the Las Vegas locals markets, gaming revenue fell 16 percent on the Boulder Strip, which includes Henderson, 6 percent in North Las Vegas, and 4.7 percent in downtown Las Vegas.
Deutsche Bank gaming analyst Carlo Santarelli blamed some of the locals market declines on month-end accounting rules for slot machines because August ended on a Friday.
The surprise result during the month came from Reno, where gaming revenue grew 7.2 percent in August. Other than Clark County, the rest of state reported positive gaming revenue results during the month. Control Board Senior Research Analyst Michael Lawton said Northern Nevada gaming markets “have been on a role.”
Washoe County – home to Reno – has recorded 16 consecutive months of positive gaming results. The two Lake Tahoe markets – north shore and south shore – have seen gaming revenue increases of six months and five months. Carson Valley gaming revenues have been up for 15 consecutive months.
In early August, the major Strip casino operators said lack of events and declines in hotel room rates would soften third quarter numbers. The news worried the investment community and sent the stock prices of several casino operators tumbling downward.
Macquarie Securities gaming analyst Chad Beynon said Strip casinos in August 2018 were competing with results from August 2017, which included the championship fight between Floyd Mayweather and Conor McGregor.
Beynon said the September numbers will be helped by the recent fight between Canelo Álvarez and Gennady Golovkin at the T-Mobile Arena, which will “add a few million in gross gaming revenue.”
McKnight told investors slot machine wagering was up less that 1 percent on the Strip during August, showing “customer resilience” despite the lower revenue projections. He added that gaming “only accounts for 25 percent to 30 percent” of total Strip revenues.
“Amidst plenty of investor concern over third quarter trends and recent, disappointing company guidance, these results are weak but likely still ahead of very bearish expectations,” McKnight said.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.
