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April sees rapid decline for Nevada and Strip gaming revenues

05 April 2015

Analyst have  reviewed to make sense out of the February gaming revenue  results in Nevada where Strip casinos declined 4.4 percent and every reporting market in the state saw either a gaming revenue increase or flat results. The Strip’s lower revenue month led to a state wide gaming revenue total of $916.1 million in February, a decline of almost 1.1 percent. Clark County revenue as a whole was off 1.7 percent, due to results in other area locations, helped offset Strip declines. The Gaming Control Board released the February results Tuesday. The Strip had $531.3 million dollars in gaming revenue during the month compared with $555.7 million dollars in February 2014.

Director of Gaming consulting for the CBRE Global Gaming Group, Brent Pirosch, had a simple explanation. He believes January and February of 2015, should be compared on a combined basis. “Some percentage of January’s revenue may have been pushed into February, and part of February’s revenue percentage may be pushed into March,” Pirosch told the firm’s clients in a research report. “This revenue scenario is similar to last year.”

On the Strip, baccarat revenue of $120.9 million dollars was down 22.6 percent, which fuelled much of the month’s decline. The amount wagered on baccarat fell 21.8 percent to $982.5 million, despite the Chinese New Year holiday. Gaming Control Board Senior Research Analyst, Michael Lawton advised that baccarat volume has declined in six consecutive months. The revenue from baccarat has declined over six of the last seven months. Gaming analysts speculated the rapid downturn in baccarat business is a derivative decline in revenue in baccarat play in Macau, where the Chinese government crackdown on corruption has targeted the region’s high- end operators who send players into Macau casinos.

“We do not expect the subdued baccarat results to come as a surprise, as the weakness in Asian sourcing has been well-documented,” said Stifel Nicolaus Capital Markets gaming analyst Steven Wieczynski. Deutsche Bank gaming analyst Carlo Santarelli said “Baccarat volume had a negative influence on the numbers.” Pirosch said February’s baccarat result coupled with January’s revenue of $147.2 million Dollar ensured the Strip surpassed the 2014 combined number. February’s hold percentage for baccarat — 12.4 percent — matched the figure from a year ago. The declining wagering has however, concerned Pirosch. “Baccarat volumes are where they were in the recession era,” he said. “If the favourable statistic forecast kicks back into the players favour, substantial declines could be in sight.

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