Wall Street analysts said higher foot traffic in July at casinos across the country “foreshadows another blockbuster” gain in gaming revenue compared to July 2019. The exception is the Las Vegas Strip, which is expected to be flat or only modestly higher at best.
States will start releasing July gaming revenue numbers as early as this week and Carlo Santarelli, an analyst with Deutsche Bank, said to look for overwhelmingly positive news and not the “mixed” news when June gaming trends were reported compared to May.
The expected gains are bolstered by a greater number of people frequenting casinos as the country opened up even more in July before some states like Nevada started reinstituting mask mandates at the end of the month.
Nationally, David Katz, an analyst with Jefferies Equities Research, said casino foot traffic was up nearly 10% in July compared to June. But he added that traffic is still tracking lower than July 2019; it was down 26%, equivalent to June being down 27% in the two-year comparison.
Assuming spend-per-visitor trends that mirror the June two-year results, Santarelli said the traffic data projects Louisiana having a 24.7% gain, Ohio a 33.6% gain, Missouri a 15.4% gain, and Indiana a 20% gain.
As for Las Vegas, Santarelli said the Strip is projected to see a gain of 0.1% compared to July 2019, though one of their models has a Strip revenue gain of 5.3%. Locals casinos should continue their strength with gains of 35.8%.
In June, Nevada recorded its fourth consecutive month of at least $1 billion in gaming revenue. Every market segment rose, with the exception of the Las Vegas Strip, which fell 1%. Locals casinos were up 42.9% compared to June 2019.
The Nevada gaming win of $1.19 billion in June was lower than the $1.23 billion in May, but the state ran ahead of June 2019’s pre-pandemic numbers by 14.6% when revenues were $1.04 billion.
Deutsche Bank tracks regions across the country to provide a preview of gross gaming revenue. The month will be aided by 10 weekend days versus eight in 2019.
Deutsche Bank is projecting average daily visitor traffic to Las Vegas in July to fall 27% compared to July 2019. It had projected a 28% decline in June, but when the Las Vegas Convention and Visitors Authority released its numbers, the decline was only 18% compared to June 2019.
“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 steady two-year cadence in daily traffic trends in July likely helps slot and domestic table trends,” Santarelli said.
Katz reported that the Las Vegas Strip in July was up 15% month over month, despite a weaker convention calendar and continuing depressed group business. Compared to 2019 levels, July foot traffic was down 22% versus June’s 23% decline, he said.
“All Strip operators have released second-quarter results by now and most management teams provided strong data points,” Katz said. “As evidence, occupancy reached 86% in July for MGM and exceeded 89% for Caesars. Golden Entertainment’s volume (at the STRAT) was slightly lower at 74% due to the lack of convention and group business, which suggests further upside given a record quarter nonetheless.”
Las Vegas locals volume in July rose 4% over June, but was down 46% over 2019 levels, Katz said. In downtown Las Vegas, July volume was up 2% over June, but down 25% versus 2019, he said.
In Reno, July volume was down 10% from June and down 31% versus 2019, Katz said. Laughlin was unchanged from June, but down 47% compared to 2019.
“We note that Golden Entertainment reported second-quarter results on Thursday and management indicated that rated players have yet to fully return to their Laughlin properties and current customer mix skewed to younger and higher spending demographics,” Katz said.
Lake Tahoe came out as the best-performing market in Nevada in July with volume up 21% over June. It was down only 9% versus 2019 levels, likely attributed to summer travel resuming, Katz said.
In other states, Santarelli reported a 15.4% gain in Missouri compared to July 2019 after an 8.8% gain in June and a 13.6% increase in May. Santarelli inferred that the daily spend per patron was up 71.6% as it was in June compared to June 2019.
In Ohio, a projected 33.6% gain comes after a 21.9% increase in June compared to 2019. The number assumes the daily spend per visitor measured in July is akin to the 100% increase in June, Santarelli said. “That’s a healthy acceleration from the 21.9% two-year improvement in June.”
In Indiana, June gaming revenue rose 13% compared to 2019 but Santarelli said July is projected to increase 20% in a two-year comparison. That’s based on the June daily spend of visitors up 89.6% compared to 2019, he said.
Louisiana enjoyed an 8.5% gain in gaming revenue in June based on daily spend up 80.9% increase over June 2019. If that same measurement is used, that results in a gain of 24.7% increase in July, Santarelli said.
