Nationally, the gross gaming revenues (GGR) in January were up 4.5 percent to $5.7 billion. It was the smallest increase in the post-pandemic era. Nine states reported a decrease in gaming revenue, also the most since 2020. The GGR is generated by casinos, racinos, video lottery terminals, sports betting, and igaming. Two of those categories, sports and igaming grew by over 30 percent; without sports and igaming, the GGR in January was actually 4.9 percent less than in 2023. There are several reasons, there was one more weekend day in 2023, and that day, a Sunday, was New Year’s Day. And the weather in Midwest was worse in 2024 than the previous year. Three separate states cited the weather as a cause for declining revenues.
There were exceptions to the weather and the decline, most notably in Nevada. While the overall gaming revenue for Nevada was only up one half of one percent, in Reno gaming revenues were up over 50 percent. It is not uncommon for gaming revenue in Northern Nevada to vary by 10, or even 20 percent year over year, but 50 is extreme. When the variation is that large, weather or weather related events can be blamed.
Gaming revenues in the winter months vary almost every year just as the weather varies. In January 2023, Reno had 16 days with either rain or snow, and four days of heavy snow. By contrast, January of 2024 had 10 days of light moisture and no heavy snow days. January 2024 was a perfect non-storm for Reno.
Due to Leap Year, national GGR in February will probably be up in most jurisdictions, including Reno. March will be different in Northern Nevada. March began with unusually heavy snows that hampered all activities in Reno/Sparks area and closed the roads in and out of town.
Donner Pass is famous for the ill-fated Donner Party in 1846. Heading west to California, the party was stranded in the mountains due to heavy snow. Over half of the members of the Donner Party died that winter near today’s Donner Pass. Since the 1840s, that pass through the Sierra Nevada Mountains has controlled traffic between Reno and California. In any winter, the highway and the railroad can be closed due to the snow. In the 1960s Interstate 80 replaced the old Highway 40; it was labeled an all weather highway. A nice idea, but keeping a pass open that can get as much as 10 feet of snow in a single storm is not an easy task.
In March 2024, the pass was closed for four days. When Donner Pass is closed, Reno is closed. Everything the citizens of Reno use comes through the Donner Pass. So do the casino customers that fill the hotel resorts. Although there are exceptions to the rule for dedicated casino customers. A bartender in one of the major casino hotels in Reno tells the story of one of his customers. Sitting at the bar at 3 in the morning, the customer said he was halfway to Reno traveling on Interstate 80 when the California Department of Transportation stopped him. The road was closed, and all drivers were asked to turn around and go home.
The guy at the bar did not want to go home, he wanted to go to Reno. He backtracked and took highway 50 to Lake Tahoe. Then because most of the roads leading down from Lake Tahoe were also closed, he took the southernmost route, Carson Pass. That brought him to Carson City and eventually to a barstool in Reno. There are lots of stories of single customers braving bad roads and danger to get to a casino. For example, between 1997 and 1998 in Cripple Creek, Colorado one player came to town every day. The casino changed ownership in August of 97; the player came every day until the following September. It is particularly intriguing because he came at night. At nine every night, he closed his gas station and drove to Cripple Creek staying until closing time. He said it was not an addiction, but a way to relax after a hard day at work.
Those stories have a myth-like quality. But gaming does have customers like that, just not enough to overcome the effects adverse weather and other disruptive events. Gaming is a seasonal industry. In the spring and fall, people have more free time and disposable income. By contrast, summer and winter have conflicts, children out of school and Christmas make demands on income and time.
Weather adds to the seasonality, in the depths of winter, people are less likely to brave the conditions to play slots. January 2024 illustrated seasonality perfectly. For the Midwest harsh weather in January meant fewer customers and less revenue. While mild weather in Reno meant more customers and higher revenues. During the dark, cold, stormy winter months it is always worthwhile to look behind the numbers for an explanation.
