A new report to investors predicts casino revenue in June will be a mixed bag across the country, including Las Vegas, where the Strip is expected to be up over 2021, while locals’ casinos will see a steeper decline than May.
The note from Carlo Santarelli, an analyst with Deutsche Bank, comes as states began releasing their monthly gaming-revenue reports. Maryland released its report on Wednesday, showing revenues in June were up 0.8% year over year.
“Relative to 2021, we expect two of the four regional markets we track to produce negative year-over-year gaming revenue in June, though we broadly expect improvement in the year-over-year comparisons, relative to those experienced in May,” Santarelli said. “The May calendar was unfavorable, with one less weekend day, while the June calendar is neutral from a year-over-year perspective.”
Assuming spend-per-visitor trends that mirror the average year-over-year results from April and May, the traffic data projects Louisiana to decline 11.8% year over year in June after falling 9.2% in May. Ohio will increase 2.1% in June after declining 3.6% in May. Missouri will fall 0.8% in June after falling 5.6% in May. Indiana will increase 2.6% in June after declining 4.1% in May, according to Deutsche Bank.
In regional drive-to markets, weekday traffic declined 3.1% in June compared to May, while weekend traffic was up 0.5%, Deutsche Bank reported.
Following a 1.4% year-over-year decline in the Las Vegas locals’ market in May, Santarelli expects more contraction in June in the mid-single-digit range. It projects, however, to be 35.4% higher than June 2019.
Analysts have suggested a decline at those properties may be attributed to inflation and high gas prices.
As for the Las Vegas Strip, Deutsche Bank projects a 9.4% gain in gaming revenue in June over June 2021.
However, its model calculated growth as low as 1%, given nuances in hold comparisons.
“Our Strip forecast assumes year-over-year handle and drop declines in both the slot and baccarat segments, while non-baccarat table-game drop is forecast to expand mid-single digits year over year,” Santarelli said. “We note that the June year-over-year baccarat-hold comparison is the easiest of the year, as the market hold of 6.5% in June 2021 was the weakest result of the year.”
Deutsche Bank reported average daily traffic on the Strip in June rose 9.3% from May. Weekend traffic rose 5.4% relative to May, while weekday traffic rose 10.8%, Deutsche Bank said.
“The continued improvement in weekday patronage, relative to weekend patronage, speaks to an improving mix of group and convention guests,” Santarelli said.
In May, Las Vegas Strip revenue of $731.5 million was up 11.6% year over year and up 23.3% from May.
The result implied that the daily spend per observed patron was up 37.7% month over month in May, Deutsche Bank reported.
“Assuming spend per observed patron on a per-day basis mirrors the average spend per visitor in April and May, we estimate June gross-gaming-revenue growth of 9.4%, relative to the +11.6% comparison in May,” Santarelli said. “That being said, we note that June faces the easiest baccarat-hold comparison of the year, post a difficult comparison in May, and as such, there is some room for slippage in domestic casino-game performance that would still allow for commensurate year-over-year growth in June, relative to that of May.”
For the Las Vegas locals’ market, daily traffic in June rose 1% from May, with weekend traffic falling 7% from May, while midweek traffic rose 4.5% over May.