Record revenue in slots, table games, and sports betting paved the way for Nevada to set an all-time record in fiscal year 2023. That strength is expected to continue into the 2024 fiscal year that started on July 1, as Las Vegas welcomes a Formula One race on the Strip in November, the opening of the Fontainebleau Las Vegas in December, and the Super Bowl in February.
The decline in June’s gaming revenue over June 2022 isn’t cause for concern, Wall Street analysts suggested. Removing baccarat from the equation, June gained over 2022 and the Stanley Cup run of the Vegas Golden Knights for that strength.
Nevada casinos generated $15.1 billion in revenue in fiscal year 2023 that ended June 30. That was an increase of 3.2% or $475.4 million over fiscal-year 2022, which increased 37.4% over FY 2021. For the first six months of 2023, gaming revenue rose 3.6% over the same period last year.
“These totals are being driven as expected by the Las Vegas Strip, which is responsible for 93.3% of Nevada’s $263.7 million increase through the first half of the year,” said Michael Lawton, a senior economic analyst for the Nevada Gaming Control Board. “Although this quarter’s results cooled compared to the first quarter of 2023, we feel confident moving forward, even in the face of difficult comparisons, that current levels are sustainable. This confidence is supported by resilient customers, continued demand for leisure travel, new-property openings in Clark County, and most importantly a robust sports and entertainment calendar.”
The Las Vegas Convention and Visitors Authority pegged June’s visitation at 3.4 million, 3.1% higher than June 2022. The 20.3 million visitors in the first six months of the year are 9.4% higher than 2022’s 18.5 million.
“Punctuated by the Vegas Golden Knights’ victorious quest for the Stanley Cup, Las Vegas visitation in June surpassed last year’s,” the LVCVA noted.
Casino consultant Brendan Bussmann, managing partner of B Global, said strong visitation for football season will end the third quarter ahead of the monumental events coming up.
“I expect we’ll have one of the largest visitations you can get, assuming there’s capacity with all the rooms,” Bussmann said. “You’ll have another (4,000) rooms online with the Fontainebleau open for the Super Bowl.”
Bussmann said because of the strong events calendar, “I do feel good about where we’re heading.” He added he remains concerned about interest rates and inflation, but some of those data points are improving. GDP grew at 2.4% in the second quarter.
“Provided there’s not some cataclysmic event, I’m very optimistic about the short-term and even longer-term future of the sports and entertainment gaming capital of the world.”
As for June, Nevada gaming revenue numbers fell 2.4% year over year and were down 1% on the Strip and 10.4% in downtown Las Vegas.
Barry Jonas, an analyst for Truist Securities, said one reason for the decline was a tough baccarat comparison. That “could imply upside” to Truist’s Strip forecasts for the second quarter, with MGM Resorts International and Caesars Entertainment releasing their earnings this week, he said.
“Baccarat win of $100 million was the culprit, above average at $93 million a month since January 2022, though down 30% year over year versus a tough comparison of $141 million in June 2022, which was last year’s second highest with a hold of 15.2%,” Jonas noted.
“Total casino win excluding baccarat – a measure we use to gauge the health of the mass market – was up 6% year over year and 3% in the second quarter, while normalized gross gaming revenue was up 7% year over year and 4% in the second quarter.”
Because of that, Jonas said the gaming revenue “supports our positive view” for both MGM and Caesars.
John DeCree, an analyst for CBRE, also pointed to an “entirely unfavorable hold comparison” in baccarat for the June decline. Excluding baccarat, Las Vegas Strip gross gaming revenue increased 5.7% year over year, he said.
“Notably, it was the highest June on record for slots and mass-market table win. Slot win increased 3.9% year over year on a 12.4% increase in handle, while non-baccarat table win increased 8.8% year over year, driven primarily by an easier hold comparison, as mass table drop declined 7.3%,” DeCree said. “Overall, total gaming volumes on the Strip, including slots, tables, and baccarat, increased a solid 7% year over year. It was also a record month for poker revenue, which benefited from a strong World Series of Poker.”
DeCree said June had one extra Friday compared with last year, which could have “provided a little extra boost to the results” heading into the July 4th weekend. “We could also attribute some of the month’s strength to the Vegas Golden Knights’s successful Stanley Cup run in early June.”
Despite downtown Las Vegas gaming revenues of $62.5 million falling 10.5% year over year, DeCree called it an “unlucky month” on both slots and tables whose holds were down 110 and 160 basis points, respectively. Slot handle of $544 million was up 1.8%, while table drop of $229 million was up 3.6%.
“Commentary from Boyd Gaming’s earnings call included additional construction disruption at the Fremont and Main Street properties, giving us confidence in June trends despite the headline gross gaming revenue decline,” DeCree said.
As for casinos that serve Las Vegas locals, DeCree said the $229 million reported, a decline of 10.1%, suffered the same fate as downtown casinos in being unlucky at slots and tables. The slot hold was down to 6.2%, while table hold was 13.1%. Volumes showed a more moderate decline.
“Boyd also added commentary on the locals’ market on its earnings call, reporting that the core-customer group was holding steady, while they saw some softness in retail and out-of-town customers. This is corroborated by the decline in convention attendance as reported by the LVCVA.”
There’s room for growth in Las Vegas going forward.
DeCree pointed out that visitation to Las Vegas of 3.4 million in June, a 3.1% year-over-year increase, was 5% below June 2019. Convention attendance declined 2.9% year over year due to event timing, he said.
Other positives include total airport passenger volume increasing 4.1% to 4.9 million, including a 12.4% year-over-year jump in international passenger volume, DeCree said. For the year, international travel is up 48.2% compared to the first six months of 2022.
Fiscal-year breakdown and records
Lawton said statewide slot win of $10.2 billion during fiscal year 2023 set an all-time record and increased 4% or $395.2 million after increasing 30.2% last year. Slot coin-in of $142.6 billion set a new all-time record for a fiscal year, beating the previous record of $138.5 billion during fiscal year 2007.
Slot win rose 10% on the Strip to $59.2 billion, while increasing 2.2% downtown to $7.2 billion. Strip coin-in of $59.2 billion rose 10% year over year. It rose 2.2% downtown to $7.2 billion.
The 2023 slot hold percentage was 7.17% versus 7.2% in 2022. Slot win generated 67.7% of total gaming win, up from 67.2% last year, Lawton said.
Slot win percentage was 8.08% in 2023 compared to 8.27% in 2022. It was 8.43% in downtown compared to 8.47% in 2022.
Table, counter, and card games win of $4.9 billion set an all-time record, beating the previous record set in fiscal year 2022. This year’s total increased 1.7% or $80.2 million after increasing 54.9% last year. Game drop of $34.9 billion decreased 1.4% after increasing 47.4% last year. Last year’s total represented a new all-time record, beating the previous record of $33.4 billion established in fiscal year 2014. Game hold percentage was 13.99% versus 13.57% in 2022, Lawton said.
The game win rose 1.6% on the Strip to $3.7 billion, while downtown it rose 2.5%.
The game win percentage in 2023 was 14.47% on the Strip, up from 14.02% in 2022. It was 8.34% downtown, up from 8.22% a year ago.
In FY 2023, baccarat win totaled $1.1 billion, a decrease of 6.3% after increasing 95.5% last year. Baccarat volume totaled $8.3 billion, an increase of 4% after increasing 50.1% last year. Baccarat had been the state’s most dominant table game for nine consecutive fiscal years (2010-2018); however, for fiscal years 2019 through 2023, twenty-one has surpassed baccarat’s total win amount, Lawton said.
The state recorded $460.2 million in sports pool win, which was an increase of 6.5% compared to last year’s 5.9% increase and represents a new all-time record, beating the previous record established last year.
Nevada recorded $8.3 billion in sports-pool write, a decrease of 9.4% from 2022, which was an all-time high. The sports-pool hold percentage was 5.51% versus 4.69% last year. Wagers made with mobile applications totaled $5.5 billion, a decrease of 12.7% compared to last year and accounted for 66% of all sports wagers placed statewide.