Strip casinos record big win in May

Cy Ryan and David Strow

Tuesday, July 10, 2001 | 10:57 a.m.

Strong business during the Memorial Day weekend -- particularly from high-rollers on the Las Vegas Strip -- helped Nevada casinos produce their largest percentage increase in gaming win in the last five months in May.

The state Gaming Control Board reported today casinos won $844.2 million for the month, up 5.6 percent from May 2000. Most of the increase was centered in Clark County, while Northern Nevada counties continued to struggle.

Frank Streshley, senior research analyst for the board, said business started slow in May but picked up at the end of the month. It was the biggest percentage gain since the 5.8 percent increase in December 2000.

Gross revenue from table games jumped 16.1 percent or $39.9 million. That's the largest increase since April 2000, when the clubs posted a 25.8 percent increase.

In baccarat, the game of choice for high-rollers, win was up 25.6 percent; blackjack revenues rose 11.1 percent; craps was up 3.7 percent; roulette gained 10.6 percent and mini baccarat jumped 152 percent.

But slot win during the month rose only 1 percent or $5.6 million. Revenue from $1 slot machines fell by 7 percent and quarter slot play was off 7.2 percent, though nickel slot machines posted a 17.6 percent gain in gross revenue.

The Strip saw revenues jump 11.8 percent to $430.7 million in May. It was the biggest percentage growth since July 2000, when the revenues jumped 15.2 percent.

Streshley said the larger casinos on the Strip had particularly good financial results, showing a 13.8 percent increase in win.

The board said slot machine play on the Strip inched up only 2.5 percent but table win jumped 23.5 percent. Leading the way was baccarat, which increased 30.2 percent or $37 million. This huge increase came despite the fact that baccarat hold was about 4 percentage points below the recent average.

Because baccarat played such a huge role in driving win numbers up, gaming analysts sounded caution against reading too much into the Strip's relatively big increase.

After adjusting for normal table game hold and removing revenues from the Aladdin -- which wasn't open in May 2000 -- the Strip probably saw an increase of 3 percent in gaming revenues, said CS First Boston gaming analyst Brian Egger. Without baccarat's jump, same-store growth would be down 1 percent, Egger said.

A more accurate picture of what's happening on the Strip can be drawn by averaging baccarat play over a period of six months, rather than month-by-month, said Andrew Zarnett, gaming analyst with Deutsche Banc Alex. Brown.

After averaging, "volume has clearly moderated in Las Vegas over the last few months ... we've seen 1-2 percent increases versus last year, when the average was 7 percent," Zarnett said. "But I don't think you're having a crisis. Whenever (room) capacity increases, then new rooms level off, you usually find revenue gains slow down year over year."

What isn't shown by the gaming report is that hotel room rates have been sliding on the Strip in recent months, particularly during the weekends, said Jason Ader, gaming analyst with Bear Stearns.

"My sense is during the second half (of the year), we'll see further deceleration of growth, and may end up seeing flat trends, which isn't that bad," Ader said.

For the seventh straight month, downtown Las Vegas casinos experienced a gain in gross win. They reported $58.1 million in revenue, up 0.2 percent. Slot win was up 0.1 percent and game revenues rose 2.3 percent.

Casinos in North Las Vegas continue to have troubles. Streshley said revenues fell 26.7 percent to $16 million for May. There have been declines in revenue in six of the last seven months in North Las Vegas, he said.

For the fourth straight month, gaming win fell in Laughlin. The clubs reported $44.8 million, or a drop of 5 percent compared to a year ago. Slot win was off 4.9 percent and table games were down 6.4 percent.

For the second straight month, Boulder Strip casinos posted a double-digit increase. The board said revenues rose to $57.7 million, up 13.1 percent.