Gaming revenues fell about 9 percent in September, compared to the previous year’s take, as the slump continues for a 21st month. From the LVRJ:
Nevada gaming revenues fell for the 21st straight month in September.Casinos statewide collected $911.1 million during the month, an 8.99 percent decrease compared with a little more than $1 billion won from gamblers in September 2008.
On the Strip, gaming revenues were $506.4 million, a decline of 3.58 percent compared with $525.2 million a year ago.Other areas of Clark County suffered much deeper declines during September. Boulder Strip casinos were down 28 percent, and the balance of the county was down 20 percent while Mesquite and Laughlin both recorded 12 percent drops.On a whole, Clark County was down 9.3 percent.Every reporting area of Nevada was down compared to a year ago.September’s gaming revenues translated into a 14.56 decline gaming taxes collected by the state. Nevada collected $54.3 million during the month, compared with $63.5 million a year ago.via Gaming revenues decline almost 9 percent in September – Breaking News – ReviewJournal.com.
In honor of the 21st straight month of gloom, I’m going to do one of my customary numbers breakdowns. See one man, sitting at a computer, spend enormous amounts of time and energy to look behind the numbers and see what’s really going on. In all likelihood, my conclusion will be, “Casinos didn’t do as well this year as they did last year.”
Since every area was down, I’m not going to break things down by reporting area, which admittedly adds a lot of detail but, on the other hand, takes a great deal of time, which I don’t have a lot of today. I will say that year-year declines are awful news for the Boulder Strip and North Las Vegas areas, since they both added major news casinos (M Resort and Aliante Station) since last September. Things were particularly gruesome at the craps tables on the Boulder Strip–they made only $222,000, with a paltry 2.27% win percentage. Last September, about $11 million was played at Boulder Strip-area craps tables; this September, about $9.7 million was wagered. People are playing less, and this month they got luckier.
Back to the statewide analysis. Let’s compare numbers for the past four Septembers to put this in perspective.
The shrinking of Nevada’s gaming industry continues. In four years, the state has lost 321 table games and 8,301 slot machines. That’s a 4.6% reduction in the total number of slots in the state and a 5.4% shrinkage in the number of tables. The problem is that since then revenues have shrunk by 7.4%. There are fewer seats for players, but they are playing less at the remaining games than they were four years ago.
Looking at slots, in September 2006 players wagered a total of about $13.9 billion on the one-armed bandits.* In September 2009, they only played about $9.1 billion. That’s a 34.5% decrease, which puts the 4.6% decrease in the installed slot base into perspective. There’s a lot less gambling going on in Nevada these days.
I find it interesting that the win percentages have run in opposite directions from September 2006 to September 2009. Table win percentage declined by about 1 percentage point, while slot win percentage increased by about 1 percentage point. I’m incorporating the new numbers into my epic 1992-2009 slot hold study, which is nearly finished and I’m looking forward to seeing what the new numbers mean for the study. Is there a trend, or just a bunch of random walking down the Boulevard?
The shrinking installed base and revenues has implications for Nevada’s tax structure. Look at it this way: In September 2009, the average Nevada casino slot machine made $115 per day. Of that, the state took $7.76 cents out in gaming taxes (there’s also a $250 annual license fee, but we’ll ignore that for now). Considering that the slot base has shrunk by 8,301 since September 2006, that means that, from slot machines alone, the state is getting $64,415.76 less per day in tax revenues from slot machines if people continued to play them at current levels. Extrapolated over a year, that’s a $23,511,752.40 shortfall. That might look small in comparison to the state’s $18.5 billion fy 2010 budget, but it’s a definite problem.
So what does all this mean for the future, particularly the impending increase in gaming supply that City Center will bring in less than a month? Table play actually improved statewide this September, so that could bode well for high-end play. Slots remain in the doldrums, however, and it is hard to see what can reverse that trend.
On the other hand, visitor volume actually increased for the month, so there is some cause for optimism. But it’s clear that the visitors aren’t gambling as much as they once did.
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*I calculate the total handle, or amount played, by dividing the total win by the win percentage.