As fears abound over where the economy is heading, Nevada posted its 16th consecutive month of $1 billion-plus in gaming revenues in June, despite a drop in slot win and declines in downtown Las Vegas and locals’ casinos.
However, aided by record air travel to Las Vegas and a strong baccarat win on the Strip, the $1.27 billion in revenue, fifth highest volume of all time and a record for June, grew 8.1% over the $1.18 billion in June 2021, according to the Nevada Gaming Control Board. The win is also 22.7% higher than June 2019.
For the year, gaming revenue is running 19.8% higher than the first six months of 2021.
Despite the gains, some areas need to be watched. June slot win of $838.8 million decreased 1.9% ($16.1 million) and the $11.2 billion in coin-in decreased 2.1% ($234.0 million) from June 2021. This represents the first decrease in statewide slot win and volume since February 2021, according to state officials.
That loss was made up by a baccarat win of $143.2 million that increased 237.3% ($100.7 million), while a baccarat drop of $656.5 million increased 2.0% ($13.0 million). Baccarat’s hold percentage was 21.81% versus 6.60% last year.
Statewide gaming win excluding baccarat was actually down 0.5%, officials said.
Numbers released Thursday showed GDP in the U.S. contracted for the second consecutive quarter, raising fears of whether the economy is headed for a recession. Economists have pointed to growth in jobs and retail sales as indicators that it hasn’t entered that phase, but that the economy is definitely slowing.
The strength in June isn’t a surprise, after Las Vegas posted a record month in air passengers, with 4.68 million going through Harry Reid International Airport.
That strength showed on the Strip in June with $734.7 million in revenue, 22.7% higher than the $598.8 million in June 2021. The Strip had $731.5 million in revenue in May. June’s numbers were 19.2% higher than June 2019, according to Deutsche Bank. The Strip is up 36.6% for 2022 compared to 2021.
The Las Vegas Convention and Visitors Authority reported 3.3 million visitors in June, a 12% increase over 2.97 million in June 2021, though 8% below June 2019. Hotel occupancy reached 82.7% in June, up from 75.9% in June 2021, but down from 91.7% in June 2019.
Weekend occupancy surpassed 90% occupancy for the fourth consecutive month, while midweek occupancy reached 80% for the first time since February 2020, up 9% from June 2021, but down 9.7% from June 2019. That was aided by convention attendance of 469,100, up from 197,200 in June 2021. It was 514,000 in June 2019, the LVCVA reported.
In June, the Jonas Brothers began their residency in Dolby Live at the Park MGM on the 3rd. Sting performed multiple shows in the Colosseum at Caesars Palace from June 3-18.
For June, Deutsche Bank reported Strip slot handle was up 6.5% year over year, while table volumes were up 9.5% year over year (+12.8%, excluding baccarat). Strip slot revenue of $380.3 million was up 4.6% year over year, as hold was down to 8.6%.
The Strip’s success wasn’t felt in the rest of Las Vegas. Casinos that serve local residents saw June revenue fall 5.7% from June 2021 and 34.9% from June 2019 prior to the pandemic, according to Deutsche Bank. For the second quarter, locals casino revenue fell 3.4% year over year. That is compared to a year ago when people had government stimulus in their bank accounts. Inflation and high gas prices could also be cutting into people’s spending.
Another worrying sign for Las Vegas was downtown’s gaming revenue numbers, $69.8 million, down 11.6% from the $79 million in June 2021. Downtown recorded $78.8 million in revenue in May.
The decline in downtown seems to explain why Circa Las Vegas owner Derek Stevens raised concerns about a slowdown when he spoke to the Nevada Gaming Commission in late June. Downtown caters to a mix of visitors and local residents. For the year, downtown is 9.6% higher than the first six months of 2021.
The average daily room rates in downtown fell 2.7% in June to $86.31. By comparison, the Strip room rates rose 24.3% from June 2021 to $167.38 last month.
Traffic on I-15 from southern California fell 10% in June compared to 2021, according to the LVCVA.
June declines were also experienced in Reno, 4.8%, and Sparks, 10%, while Mesquite was flat. South Lake Tahoe revenues fell 28.7%. Laughlin fell 14.6%. North Lake Tahoe rose 11.4% year over year.
Michael Lawton, a senior economic analyst for the state of Nevada, said this marks the third consecutive month that statewide gaming win excluding the Las Vegas Strip decreased (-7.5% for June 2022 versus June 2021). The majority of the submarkets in Clark County, in addition to several submarkets outside the county, continue to face difficult year-over-year comparisons, as anticipated, and are decelerating compared to 2021. On the positive side, with the exception of North Las Vegas and Laughlin, all the gaming-win totals for the state’s major submarkets increased over June 2019, Lawton said.
Downtown Las Vegas was facing a difficult comparison, with June 2021 up 13.5% over June 2019, Lawton said. The Strip had a softer comparison, because June 2021 was down 2.9% versus June 2019.
While the state is 19.8% higher in the first six months compared to 2021, Lawton said only two markets are down through June: Sparks, down 2.7%, and South Lake Tahoe with a decline of 11.3%.
Clark County rose 23.5%, while Washoe County rose 2.2% over the first six months. Reno rose 2.9%.
Lawton said that during the state’s fiscal year that runs July through June, gaming win totaled $14.6 billion, up 37.3% after increasing 14.2% in fiscal year 2021.
This represents an all-time-record gaming win for a fiscal year, beating the previous record set in fiscal year 2007, which recorded a total win of $12.7 billion, Lawton said.
In addition to the state, 11 of the Nevada’s 18 major submarkets set all-time records for fiscal-year gaming win: Clark County, downtown Las Vegas, Las Vegas Strip, Boulder Strip, Mesquite, balance of Clark County, Carson Valley, Elko, Wendover, balance of Elko County, and balance of Washoe County.
Outside of the Las Vegas Strip, 16 of the 17 other individual markets recorded increases this fiscal year compared to fiscal year 2021, Lawton said. South Shore Lake Tahoe was the only market to record a decrease compared to the previous year. Additionally, every market with the exception of North Las Vegas and Laughlin recorded gaming wins in excess of the pre-pandemic fiscal year 2019, he said.
Nevada sportsbooks won $23.8 million, down 18.3% compared to June, with a hold percentage of 4.86% versus 5.35% last year. Sportsbook wagers totaled $490.3 million, down 10.1% compared to June 2021.
This ends a streak of nine consecutive increases to betting volumes. The last decrease was recorded in August of 2021, Lawton said.