Nevada gaming revenues top $1 billion for July, up nearly 17 percent

by , Sep 15, 2012 | 1:00 pm

Nevada recorded its second $1 billion gaming revenue month of 2012 during July – the first time in four years the state has seen multiple billion-dollar months – due in large part to a near-record performance in baccarat play.

Nevada casinos collected $1.005 billion from customers during July, according to figures released Monday by the Gaming Control Board.

Revenues increased almost 17 percent from the $860.1 million collected in July 2011.

On the Strip, gaming revenues jumped 27.5 percent to almost $597.5 million, compared to $468.5 million in July 2011.

Baccarat was the driving force behind the revenue increase. Casinos collected $189.9 million gamblers, a jump of 111.8 percent from a year ago. Gamblers wagered $1.2 billion on baccarat during the month, a 28.9 percent increase from a year ago.

The hold percentage for baccarat – the amount of money casinos collected compared to what was wagered – was 16.03 percent. In July 2011, the baccarat hold percentage 9.76 percent. The average 12-month baccarat hold percentage is roughly 12 percent.

The baccarat revenue total was the third highest in state history and the highest ever for July.

The baccarat figures also helped offset the fourth straight month that slot machine wagering declined on the Strip. Gamblers wagered 5.1 percent less on slots than they did a year ago. Still, revenues from slot machines on the Strip were up 11 percent.

“We believe monthly numbers were mixed with solid headline results being driven by very strong baccarat results and partially offset by lackluster slot handle and nonbaccarat table volumes,” JP Morgan gaming analyst Joe Greff told investors. “All in all, we believe July’s results point to a continued uneven recovery on the Las Vegas Strip.”

Susquehanna International Group gaming analyst Rachael Rothman said the declining slot machine wagering totals during July may have been the result of two fewer weekend days compared and the same month a year ago and the Fourth of July holiday falling on a Wednesday, rather than a weekend.

“Strong gaming revenue growth in July was somewhat offset by a year-to-year decline in underlying core gaming demand, though we believe the disappointing core results were more reflective of tough calendar headwinds than a deceleration in fundamentals,” Rothman said.

Several analysts said baccarat numbers were good news for casino operators involved in the high-end play. July was the first month of the third quarter, which ends Sept. 30.

“In our view, the most positive read-through from July results is for MGM Resorts International, which should capture its fair share of the baccarat growth through its updated product at Bellagio and an increased baccarat emphasis at Aria,” Macquarie Securities gaming analyst Chad Beynon told investors.

For the first seven months of the calendar year, gaming revenues statewide are up 2.4 percent. On the Strip, gaming revenues have increased 3.2 percent through July.

In January, gaming revenues statewide hit $1.038 billion, the first time since September 2008 that gaming revenues reached the $1 billion mark. July’s total marked the first time since 2008 that state had multiple $1 billion gaming revenue months.

Control board senior research analyst Michael Lawton said billion-dollar revenue months were the norm in Nevada before the recession. In 2008, the state reported five months of $1 billion or more in gaming revenues. In 2007, 10 of the 12 months had $1 billion or more in gaming revenues.

“Ultimately, the goal is to have a nice blend of mass market volume and high-end baccarat play,” Lawton said. “It was still a billion-dollar month.”

Clark County casinos collected almost $867 million in gaming revenues, an increase of 21 percent. North Las Vegas casinos had the state’s largest revenue increase of any reporting period, up 36 percent. Casinos downtown grew gaming revenues 16.4 percent, while gaming revenues along the Boulder Strip increased 17 percent.

July’s performance helped reverse a two-month downward trend. The figure was just the second positive gaming revenue swing in the past five months.

Nevada collected gaming taxes of $67.5 million in August, based on July’s revenues, a nearly 40.5 percent increase from the same period last year.

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871. Follow @howardstutz on Twitter.
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