Statewide gambling revenues dropped by 8.3% in May, ending 7 straight months of double-digits losses. It was the state of Nevada’s seventeenth straight monthly losses in the amount of cash casino facilities collected from players. Nevada’s Gaming Control Board’s chief of the tax and licensing division, Frank Streshley, stated on July 9th, 2009 that it is very disappointing because with the number of special events in May together with a soft monthly comparison from last year, they though that the results would be better than what was reported.
Nevada casino facilities earned $889.1 million from players during the month according to the results released by the Gaming Control board. The figure compared with $970 million collected last year. The May 2008 result was down by more than sixteen percent from what was reported in 2007 the same period. The latest drop was the lowest since September 2008, when gambling revenues fell 5.4%.
On the Las Vegas strip, gambling revenues were $480.8 million, a 6.4% drop compared with $513.5 million a year ago. Taxes earned by the state from the gaming revenues in May totaled $50.8 million collected from the same time a year ago. Streshley and other gaming analysts thought that Nevada would fare well going into May 2009 because of the events lined-up in the calendar. The month featured different events in Las Vegas, beginning with the boxing match between Ricky Hatton-Manny Pacquiao on May 2nd, 2009.
Different concerts also took place during the month. The month ended with an Ultimate Fighting Championship card event at the MGM Grand. The events turned out to be a good one for high-end business. Baccarat earnings were $96.2 million, an improvement of 36.6%. The amount wagered on the game of baccarat was $726.8 million, up by 16.4% from a year ago. But Nevada’s win from casino table games, other than the game of baccarat and slot machines did not keep up.
Streshley said that without the help of baccarat, statewide gambling revenues would have been off by 12%. But he said that the bright side is that high-end business seems to be recovering when special events are in town. Other gaming analysts echoed those beliefs. Susquehanna gaming analyst Robert LaFleur said that in a meeting they had with the management, MGM Mirage indicated that demand patterns in the strip were heavily influenced by events. He added that the strip results were also affected by improvement in capacity because of Encore which opened in December 2008. The gaming analyst for CB Richard Ellis in Las Vegas, Jacob Oberman said that the baccarat results may have brought benefits to only the casino facilities that hosted each event.
JP Morgan gambling analyst Joe Greff stated that he was encouraged because the May drop stayed in the single digits. The money wagered on slot machines in Las Vegas during the month of May was $10.1 billion, a drop of 10% from a year ago. Casino table games volume was $2.5 billion, a slide of 4.6%. Streshley stated that casino operators have been saying that weekends have been solid, with hotel occupancy levels improving and spending levels up.
06.08
