As states start rolling out their gaming-revenue numbers this week, a Wall Street firm predicts a solid showing for November, though it will be a deceleration from October, as foot traffic dropped along the Las Vegas Strip and elsewhere.
Deutsche Bank issued a note to investors that assumed spend-per-visitor trends will mirror the average two-year results over September and October. The traffic data projects the Las Vegas Strip will gain 2.3% in gaming revenue over November 2019, Missouri will increase 1.2%, Indiana will gain 7%, and Ohio will increase 7.9%.
Ohio released its numbers Tuesday that showed an even higher 10.9% increase in the November year-over-year comparison, but a 7.2% decrease from October, corroborating Deutsche’s projection for a deceleration. There was a 21.7% increase between October 2019 and October 2021.
The Wall Street firm wrote that Louisiana, which has since been slowed by Hurricane Ida, will decline by 1.2%.
November’s gaming-revenue calculations were negatively impacted by only eight weekend days, compared to 10 in November 2019. That created a 5% drag, the firm noted.
The average daily traffic on the Strip in November pulled back from October. It rose about 8% compared to October 2019, but was down about 11% in the two-year comparison.
“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 higher mix of gaming patrons in the visitor volume is likely to offset the calendar impact in November, which weighed on traffic volumes relative to 2019,” said Deutsche Bank research analyst Carlo Santarelli.
As for the Las Vegas locals market, the numbers imply a 14.7% decline compared to November 2019. Local properties have a higher mix of slot revenues than on the Las Vegas Strip, the firm noted.
Santarelli said foot traffic for that segment fell 35% compared to November 2019, which is why they projected a decrease in gaming revenue over that two-year period. He cautioned, however, that number may not be accurate.
“We expect the Nevada Gaming Control Board result to be considerably higher than our forecast, with benefits flowing into November, given October ended on a Sunday. The accounting will not capture the revenue accrued on the final weekend in the month. In short, we believe October and November local data should be looked at together for a more reasonable indication of underlying trends.”
In Missouri, October gaming revenue rose 14.5% compared to October 2019, but Deutsche Bank said they calculated only a 1.2% increase for November.
In Indiana, October gaming revenue rose 20.1% from October 2019, but the increase in November will be only 7%.
In Louisiana, gaming revenue rose 5.1% in October compared to 2019, but is projected for a 1.5% decline in November.
