The investment community had been anticipating a potential downturn in Nevada’s gaming market. However, April’s gaming and tourism results, released on Wednesday, have sparked optimism. Following a 1.2 percent statewide revenue decline in March, the Nevada Gaming Control Board reported a nearly 7 percent increase in Strip gaming revenue for April, driven by a higher hold percentage in high-end baccarat play.
The Las Vegas Convention and Visitors Authority (LVCVA) also reported a 4 percent increase in tourism to Las Vegas for April, with convention attendance soaring by more than 36 percent compared to the previous year.
Chad Beynon, a gaming analyst at Macquarie Securities, expressed confidence that Strip gaming revenues would continue to rise through June, according to The Nevada Independent. He highlighted the projections by leaders of Las Vegas’ major hotel-casino operators, MGM Resorts International and Caesars Entertainment, who foresee increased visitation and higher hotel room rates extending through the end of 2024.
“We expect Strip gaming revenue to moderate but see further growth in non-gaming [spending] given the programming from sports, entertainment, and a strong convention calendar,” Beynon noted in a research report. He also emphasized the likelihood of high-end luxury customers maintaining their spending levels, although lower-income visitors to Las Vegas might feel financial pressures.
The Strip Leads the Way
The Nevada control board reported that casinos statewide collected over $1.2 billion from customers in April, marking a nearly 7 percent increase from the previous year and setting a record for the month. Nearly $1.1 billion of this came from Clark County, with the Las Vegas Strip leading the way, accounting for $666 million.
April’s revenue figures follow a March that saw the state’s first revenue decline in eight months. Michael Lawton, the control board’s senior economic analyst, noted that April is traditionally not the strongest month for gaming revenue, adding that the total revenue figure for April was the lowest so far in 2024.
High-end baccarat play significantly boosted Strip revenues, with winnings from the game reaching $76.7 million, an 80 percent increase from the previous year. Wagering on baccarat rose almost 10 percent to $662.9 million, and the hold percentage for casinos increased to nearly 11.7 percent from 7 percent the previous year. Excluding baccarat, Strip gaming revenue was up 1.2 percent.
Deutsche Bank gaming analyst Carlo Santarelli pointed out that the Strip’s gains were helped by a favorable comparison in baccarat hold and the calendar effect of March ending on a Sunday, which shifted slot machine revenue from that weekend into April. Slot machine revenue on the Strip rose 5.1 percent to $409.3 million.
The LVCVA reported that Las Vegas attracted more than 3.5 million visitors in April, including 503,500 convention attendees from major events such as the International Security Conference (20,000 attendees), Google Cloud Next show (30,000), and the Craft Brewers Conference (12,000). The Strip also hosted several concerts and special events, including UFC 300 at T-Mobile Arena.
Overall hotel occupancy on the Strip reached 85.5 percent, up 1.2 percent from the previous year. Kevin Bagger, LVCVA Vice President of Research, highlighted that this increase, along with a 6.6 percent rise in the average daily room rate to $182.20, was significant given that more than 4,000 additional rooms were available compared to a year ago.
Good Performance in Southern Nevada, Decline in Washoe County
Southern Nevada’s gaming markets, with the exception of Laughlin and North Las Vegas, rebounded from March. Downtown Las Vegas and other Clark County neighborhood areas reported double-digit increases. Downtown saw an 11.1 percent rise to $82.7 million, nearly offsetting a 12.5 percent decline in March, with significant contributions from slot machine and sports betting revenues. Downtown casino revenue for the first four months of 2024 is down less than 1 percent compared to the previous year.
Clark County’s other areas, primarily neighborhood casinos outside incorporated areas, reported $163.2 million in gaming revenue, up 24.5 percent, including results from the newly opened Durango Casino Resort.
JMP Securities gaming analyst Jordan Bender noted that the Las Vegas locals market, encompassing North Las Vegas and Henderson, experienced a 16 percent increase in gaming revenue from April of the previous year, despite some casino management’s comments during quarterly earnings calls about a softening market.
In contrast, Washoe County markets experienced gaming revenue declines for the second consecutive month. Reno’s casino revenue fell 5.9 percent to $59.3 million, and Sparks saw an 8.9 percent drop to $13.9 million. However, South Lake Tahoe reported the state’s largest year-over-year monthly increase, rising 31.6 percent to almost $18 million, driven by slot machine revenue from the last weekend of March being reported in April.
Overall, these developments suggest a more positive outlook for Nevada’s gaming market, with high-end baccarat play and increased tourism driving growth, while the broader market shows resilience despite some localized downturns.
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