Hey, it wasn’t a decline.
Nevada gaming revenue increased less than 1 percent in July, ending fears the market might be off after a June in which the state’s casino industry reported its largest monthly spike of the year.
Casinos took in $931.8 million during July, which equated to a 0.65 percent increase compared to July 2013.
On the Strip, casinos collected $536.2 million in gaming revenue, an increase of 4.8 percent from a year ago.
The figures were released Thursday by the Gaming Control Board.
July’s totals could be viewed as a letdown following June’s 14.3 percent statewide increase, which included a 22.5 percent gaming revenue increase on the Strip.
Still, July was the Strip’s fifth consecutive monthly increase.
“While the comparison was relatively easy, the result squashed some fears that summer gross gaming revenue could fall,” Macquarie Securities gaming analyst Chad Beynon told investors.
Beynon said he expects positive gaming growth on the Strip through the remainder of the 2014 third quarter.
However, he cautioned that 2013 increases of 20 percent in August and 15 percent in September “could present challenges.”
BACCARAT UP AGAIN
Baccarat play continued to drive Strip gaming results.
Casinos collected $133.5 million in baccarat revenue, an increase of 16 percent over July 2013. Wagering on baccarat increased 24 percent to $1.2 billion while the hold percentage of 10.8 percent — what the casinos kept based on wagers — was below the 11.6 percent reported last July.
Baccarat revenue accounted for 25 percent of the Strip’s July total.
Union Gaming Group analyst Robert Shore said Strip casinos with ties to Macau have benefited from softness in the Chinese high-end customer market. The reduced Macau play is politically driven rather than economically based, Shore said.
He noted an increase in visitation to Las Vegas from Chinese high-end players who are seeking an alternative gaming jurisdiction.
“Five consecutive months of strong baccarat play reaffirm our view of an inverse correlation between upside trends in Las Vegas high-end play and the relative weakness in Macau,” Shore said.
On the Strip, slot machine revenue increased 2 percent while table game revenue grew 1 percent. The Strip has seen three consecutive months of increased wagering on slot machines while slot machine revenue has increased in six of the last seven months.
For the first seven months of 2014, Strip gaming revenue is up 3.6 percent over the same seven months of 2013.
Gaming Control Board Senior Research Analyst Michael Lawton said if baccarat revenue was removed from the total, the Strip would be up just 0.7 percent for the first seven months of the year.
Statewide, gaming revenue is up 1.4 percent through July.
J.P. Morgan gaming analyst Joe Greff said Strip casino results have shown “significant improvement from where trends stood following the first two months of the year.” After February, Strip gaming revenue was down 12.3 percent.
“With this note, we maintain our positive outlook for the Las Vegas Strip and believe the overall recovery will continue as 2014 progresses,” Greff said.
Several reporting markets in Clark County suffered gaming revenue decreases in July, including the Boulder Strip, downtown and North Las Vegas. On a whole, Clark County gaming revenue increased 2.2 percent in the month.
Nevada’s three online poker websites collected revenue of $985,000 after cracking the $1 million mark for the first time in June.
“Modest declines, namely downtown, are not wholly unexpected given a renewed customer base and customer profile which we continue to observe locally in that area,” Shore said.
Northern Nevada casinos had a down month in July. Washoe County, which includes Reno, saw gaming revenue decrease 1 percent as a whole. Reno casinos experienced a 2.3 percent revenue decline. Casinos in South Lake Tahoe had the state’s largest gaming revenue decline in July, down 22 percent.
The state collected $52.2 million in gaming taxes during August, based on the July revenue total, a decline of 14.7 percent. In the first two months of the fiscal year, gaming tax collection are down 7 percent.
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