Five of six markets tracked by Deutsche Bank, including Las Vegas, will report close to double-digit gaming revenue growth over 2019 when October numbers are crunched by the states this month.
The gains are being driven by an increase in visitation, as COVID-19 cases decline and patrons spend more than they did in 2019. October gaming reports across the country start to roll out this week.
In its monthly report, Deutsche Bank was high on both the Las Vegas Strip and Las Vegas locals casinos. In addition, it gave high marks to Missouri, Indiana, and Ohio. Louisiana, however, which is still feeling the effects from Hurricane Ida in August, remains in recovery mode, though still matching 2019 levels.
The gaming markets were aided in part by the calendar in October, which had 10 weekend days compared to eight in October 2019, according to Deutsche Bank analyst Carlo Santarelli. That boosted traffic in those markets (with the exception of Ohio) that already have been aided by a higher spend per visitor during the pandemic.
Assuming spend-per-visitor trends mirror the average two-year results over August and September, the traffic data projects gross gaming revenue results for October compared to October 2019: a 24.3% increase on the Strip; 41.6% increase at Las Vegas casinos that cater to locals; 21.9% gain in Ohio; 9.6% in Missouri; and 16.2% in Indiana. By contrast, Louisiana is projected to grow by 0.9% over October 2019.
Deutsche Bank projects that average daily visitor traffic in October on the Strip rose 8% compared to October 2019. In contrast, there was a 2% decline in August compared to August 2019, while September traffic comparisons were flat.
“While the Las Vegas Strip, given high-end play, is likely to show more volatility when examining visitor volumes relative to gaming spend, we believe the healthy growth, helped by the favorable calendar, relative to October of 2019, likely bodes well for domestic table game and slot gross gaming revenue performance,” Santarelli said.
Deutsche Bank said the performance, however, is more likely to be closer to their outlook at the end of October that suggested a 15.4% increase on the Strip over 2019, based on hold comparisons and other factors.
“We expect the Nevada Gaming Control Board result to be lower than our forecast, with benefits flowing into November, given October ended on a Sunday, and as such, the accounting will not capture the revenue accrued on the final weekend in the month,” Santarelli said.
That standard of not counting all of October will also apply to Las Vegas locals casinos. Foot traffic in those casinos was down 15% compared to October 2019, but was stronger than September.
If the average spend per visitor mirrored August and September, it would reach 66.5%, but Deutsche Bank estimates a 41.6% gain instead compared to the 12.9% two-year comparison in September.
In Missouri, Deutsche Bank is expecting a strong October as well, after September revenue was $152.1 million, up 8.8% compared to September 2019. It was up 1% in August in a two-year comparison.
The daily spend per patron was up 40.4% in September compared to September 2019 and 35.7% in August. Based on that average increase, October’s numbers suggest a 9.6% gain over October 2019, Santarelli said.
In Ohio, gaming revenue in September was $185.4 million, a 19.5% gain relative to September 2019. That reflects a 32.5% spend-per-patron on a two-year basis in September. Based on trends over August and September, that implies a 21.9% growth in October, Deutsche Bank said.
Indiana reported $206.6 million in gaming revenue in September, up 16.1% from September 2019. That suggests a 58.8% spend-per-patron increase over September 2019. Based on a two-month average, a 16.2% increase in gaming revenue is possible, according to Deutsche Bank.
The outlier is Louisiana, but even gaming revenues there are expected to show a gain over October 2019 after September’s revenues of $159.7 million declined 12.9% from September 2019, Deutsche Bank said. A drop in visitor volume was the reason, given that daily spend per patron rose 37.1% in September versus 2019. If that trend continues, Louisiana should see a gain close to 1%, Deutsche Bank said.
