A report from Deutsche Bank projects an 8% year-over-year decline in Las Vegas Strip gaming revenue in May when the numbers come out at the end of June.
The report, which came out ahead of gaming-revenue releases this week across the country, also predicts three of four regional markets tracked by Deutsche Bank – Indiana, Ohio, and Missouri – will sustain gaming-revenue declines in May compared to May 2021. Louisiana had the lone increase of regional markets tracked.
The report said Las Vegas casinos that cater to locals will see a year-over-year-gaming-revenue increase after a 3.2% decline in April compared to April 2021.
Whether Nevada’s 14 consecutive months of gaming revenue exceeding $1 billion is in jeopardy remains to be seen. The state recorded $1.12 billion in April, which was a monthly record.
Nevada reported $1.23 billion in gaming revenue in May 2021, with the Strip’s share at $655.4 million.
Deutsche Bank research analyst Carlo Santarelli said April benefited from the NFL Draft, BTS concerts, and a favorable calendar, while the calendar in May “represents a headwind.” He added that comparisons will remain challenging with the transition into June and the second half of 2022 for regional markets.
Deutsche Bank reported average daily traffic on the Strip in May was down about 13% from April. Weekend traffic was down 15.8% in May relative to April and weekday traffic was down 9.7%. The smaller drop weekdays represents an improvement in convention visitation.
While April Strip gaming revenue was 22.8% higher compared to April 2021, the daily spend per visitor fell 21.3% over March, Deutsche Bank reported. If May mirrors March and April, Strip gaming revenue will decline 8%, unless there’s volatility from baccarat, Santarelli said.
Off the Strip, Deutsche Bank reported that following a 3.2% gaming revenue decline in the locals’ market in April (which the firm noted had the calendar benefit muted by the Nevada Gaming Commission accounting methodology), it expects growth to resume in May. The Las Vegas locals’ market will have a 11.9% gain over May 2021 and 40.1% increase versus May 2019. That’s aided by Deutsche Bank reporting that daily traffic for locals’ casinos rose about 10% in May compared to April.
Assuming spend-per-visitor trends mirror the average year-over-year results in March and April, the traffic data project that Ohio will decline 4.4% after a -0.7% year-over-year decline in April; Missouri is expected to decline 6.4% after gaining 0.4% year-over-year in April; and Indiana will decline 3.1% after an 8.2% year-over-year increase in April, Deutsche Bank reported.
The one regional market to register an increase was Louisiana, where Deutsche Bank projects a 5.4% increase compared to May 2021 after a 7.2% decline year-over-year in April.
April gaming revenue in Missouri in April was $172.3 million, up 0.4% year-over-year, but down 2.5% compared to March, Deutsche Bank reported. The firm calculated a 6.4% decline based on visitation and spend per patron rising 1.4% in April compared to March. That projects to a 6.3% gain over May 2019.
April gaming revenue in Ohio was $215.6 million, down 0.7% from April 2021 and down 0.3% from March. Spend per patron was up 0.6% in April and based on that trend, it implies a 4.4% decline in May year-over-year. It would still be up 18% over May 2019.
In Indiana, gaming revenue was $229.1 million, up 8.2% from April 2021, but down 2.6% from March. Spend per patron fell 0.2% in April compared to March. Basing May’s pattern off of that, May will decline 3.1% from May 2021. It would still be 11.5% higher than May 2019.
By comparison, Louisiana had $218.8 million in gaming revenue in April, down 7.2% from April 2021 and down 1.2% from March. The April result implied that spend per patron fell 4.4% from March and if May is similar to the average in March and April, that suggests 5.4% growth over May 2021. It would be 10.4% higher than May 2019, Deutsche Bank noted.
