Strong Strip gaming win pushes September revenues in Nevada

October 27, 2022 11:42 AM

Strong Strip gaming win pushes September revenues in Nevada

Photo: Public Domain
  • Buck Wargo, CDC Gaming Reports
October 27, 2022 11:42 AM
  • Buck Wargo, CDC Gaming Reports
  • Nevada
  • Commercial Casinos
  • Sports Betting

Led by an 8.25% increase in Las Vegas Strip gaming revenue and increased visitation in September, Nevada posted its 19th consecutive month of revenues exceeding $1 billion and pushed statewide revenues 13.2% higher for the first nine months of 2022.

The September results corroborate the outlook of gaming executives at the start of the fourth quarter that so far, inflation and the economy aren’t impacting the industry.

The Nevada Gaming Control Board reported the Strip recorded $692.9 million, up from $640.1 million in September 2021. Deutsche Bank reported that September 2022 is 18.6% higher than September 2019 prior to the pandemic.

For the year, Strip revenue rose 22.7% over the first nine months of 2021. For the third quarter, it was up 3.2% year over year and 29.1% higher than the third quarter of 2019, Deutsche Bank reported.

Las Vegas attracted 3.35 million visitors in September, a 14.3% gain over September 2021, even though vehicle traffic from California fell 13.5% year over year. Overall visitation was still 3.5% below September 2019, according to the Las Vegas Convention and Visitors Authority. Convention attendance of 372,600 was 21.4% higher than 2021, but 18.9% below 459,400 in September 2019.

The Strip’s performance helped Clark County as a whole exceed $1 billion in revenue and a 5.5% year-over-year increase.

Las Vegas casinos that cater to locals, however, were flat, falling 0.2% year over year to $240.3 million, though still 12.7% higher than September 2019, according to Deutsche Bank. For the third quarter, locals revenue fell 1.1% year-over-year, but was 20.6% higher than third quarter 2019.

On Tuesday, Boyd Gaming executives reported a strong third quarter and no signs of inflation slowing revenues at the start of the fourth quarter. Red Rock Resorts reports its earnings Thursday afternoon.

Downtown Las Vegas, which caters to locals and tourists, recorded only a 1.6% increase in September to $74.2 million.

North Las Vegas increased 5.37%, while the Boulder Strip declined 8.6%.

Elsewhere in Clark County, Laughlin increased 4.77% and Mesquite increased 4.85%.

In northern Nevada, Washoe County had a 9.69% increase, with Reno up 8.8% and Sparks gaining 19.27%, thanks to the opening of Legends Bay Casino in late August.

North Lake Tahoe rose 40% to $2.91 million and South Lake Tahoe jumped a whopping 395% to $27.9 million after being impacted by wildfire closures a year ago.

Michael Lawton, a senior economic analyst for the state, said that through the first nine months of 2022, except for Sparks (down just .08%), every major market in the state is up through September.

Overall hotel occupancy reached 83.1%, 10.1 points ahead of last September, but down 5.2% versus September 2019, according to the LVCVA. Weekend occupancy reached 92.1% (up 3% year over year, but down 3.5% versus September 2019). Midweek occupancy reached 78.6% (up 12.5% year over year, but down 6.5% compared to September 2019). Strip occupancy was 85.3%, down from 89.8% in September 2019.

“This month’s total (on the Strip) was driven by another incredibly strong sports and entertainment calendar, which included concerts, residencies, a music festival, and three high-profile sporting events,” Lawton said.

In September alone, Allegiant Stadium hosted the “Stadium Tour” with Motley Crue, Def Leppard, Poison, and Joan Jett and the Blackhearts performing on Sept. 9, a concert by the Imagine Dragons, and the Las Vegas Raiders’ home opener. Also in September, UFC 279 and the third Super Middleweight fight between Canelo Alvarez and Gennady Golovkin took place at T-Mobile Arena, Aerosmith began a residency at the Park MGM, the Life is Beautiful Music Festival was held downtown, and Miranda Lambert began her residency at Planet Hollywood.

Strong weekend demand supported by major events translated to record monthly average-daily-room-rate levels, the LVCVA reported. September’s average daily rate approached $187, 20.1% year over year and 36.5% ahead of September 2019. Revenue per available room neared $156 for the month, 36.8% year over year and 28.5% over September 2019.

September’s combined markets beyond the Strip increased by $38.2 million (7.4%) year over year, the largest increase recorded since March, Lawton said.

The combined markets have now recorded increases year over year in consecutive months after experiencing four consecutive decreases between April and July, Lawton said.

Statewide, slot win of $858.1 million increased 10% and coin-in of $11.8 billion was up $1.1 billion or 9.9%.

Table, counter and card games won $390.8 million, up 3.5%, and games drop of $3.0 billion increased 13.0% from September 2021.

Baccarat win of $80.1 million decreased 3.6% and baccarat drop of $697.7 million increased 32.8%. Baccarat’s hold percentage was 11.48%, versus 15.81% last year.

The Strip’s slot win increased 15.3%, with a $674.1 million (16%) increase in coin-in. The Strip’s games win decreased 0.5% and drop increased 17.6%, Lawton said.

Nevada sportsbooks won $70.6 million, up 30.2% compared to September 2021 due to a hold percentage of 9.3% versus 6.9% last year, Lawton said. He also noted that it was the second highest total win amount in Nevada history, just shy of the all-time record of $72.0 million set in November 2021. Sportsbook wagers totaled $760.8 million, down 3.3% compared to September 2021.

The sportsbook numbers prompted a note to investors from Deutsche Bank analyst Carlo Santarelli.

“We don’t tend to include much about sports betting, which is reported within table games, in our monthly Nevada GGR notes, but we do believe the September report contains an interesting and noteworthy tidbit,” Santarelli wrote. “Much has been made about high hold in September in the state sports betting reports, with some attributing the hold to the extraction of promotions. Given the hold performance at retail locations (no promotions) versus mobile holds (promotional), we were a bit leery of this assumption.

“In Nevada, sports betting hold in September was 9.3%. From January through August, the average hold in Nevada sportsbooks, which we note are primarily retail, was 4.3%, with no month holding above 5.0%,” Santarelli said.

“As such, given promotions are not a meaningful driver of Nevada sports betting patronage, the 9.3% hold implies that the increased hold in state results is primarily a function of bad luck for bettors, as opposed to a fundamental change in promotional activity or game mix (such as parlays and in-game betting). That said, we do believe the promotional environment is modestly more rational than it has been.”