Casino numbers show gradual rebound

Cy Ryan and David Strow

Tuesday, Feb. 12, 2002 | 11:07 a.m.

Nevada's gaming industry continued its downward trend in December, as the Strip posted its biggest decline in gaming win in nearly four years.

Still, gaming industry analysts are sticking to their projections of a gradual recovery, one that will continue through 2002.

The state Gaming Control Board reported this morning that December gaming win on the Las Vegas Strip fell 13.4 percent to $370.9 million. That is the largest monthly decline in Strip gaming win since February 1998.

Statewide, Nevada's gaming win dropped 7.5 percent to $731.8 million.

Once again, a decline in high-end play was a key culprit, as baccarat win on the Strip dropped nearly 37 percent and overall table play was down 18 percent. Slot win, by comparison, declined 8 percent.

Strip casinos played luckier than normal against baccarat players, which helped contain the damage somewhat. If baccarat ``hold'' ran at historical levels, said Bear Stearns gaming analyst Jason Ader, the Strip's gaming revenues would have been down 16 percent.

Another factor in the decline was a tough comparison; gaming revenues rose more than 9 percent on the Strip in December 2000.

The declines marked a continuation of a slowdown in the state's tourism industry that began with the Sept. 11 terrorist attacks. Since those attacks to Dec. 31, gaming revenues were down 5.8 percent statewide when compared to the same period in 2000. On the Strip, the decline since Sept. 11 is 10.4 percent.

Still, analysts don't believe the December report indicates that the Strip is starting to see business erode once again. Instead, they project the Strip's gradual recovery will continue through 2002.

CS First Boston gaming analyst Brian Egger expects Nevada's gaming report in January to show a substantial decline, primarily because both the Super Bowl and Chinese New Year's fell in January 2001. Neither event occurred in January 2002.

By the same token, February should show very favorable comparisons, since both Chinese New Year's and Super Bowl were pushed into this month in 2002 -- and Strip operators have been signaling both events were strong, as high-end business recovers.

"If you lump January and February together, I imagine you'll see evidence of the on-going recovery," Egger said. "Things are coming back, getting a little bit better (each month)."

Ader agrees with projections of a gradual recovery.

However, he noted, "we believe pre-9/11 business levels may be more elusive for some time."

Elsewhere in southern Nevada the picture in December was more encouraging.

Downtown casinos posted $533.3 million in winnings, a 2 percent increase. Boyd Gaming Corp.'s three downtown casinos may have played a key role in this, Egger said -- the Las Vegas operator said in a conference call last week that charter flights from Hawaii to its downtown casinos were running strong.

In North Las Vegas, win rose 5.4 percent to $16.3 million; on the Boulder Strip win was up 10.5 percent to $50.3 million; in Mesquite win rose 16.2 percent to $7.4 million; and the "balance of Clark County" rose 12.2 percent to $59 million.

Ader theorized that the opening of Green Valley Ranch Station Casino Dec. 18 could have boosted the balance of Clark County numbers, though the control board does not specify which casinos are included in this category.

Other than the Strip, the only Clark County market down for the month was Laughlin, where win fell 5 percent to $38.5 million. Overall, Clark County's gaming win was down 7 percent to $596.1 million.

Northern Nevada casinos had a tougher time than the Strip in December, however; Washoe County's gaming revenue dropped nearly 14 percent to $77 million.

In all, Nevada's casinos posted $9.4 billion in gaming revenues in 2001, a drop of 1.4 percent from the previous year. That was the worst year-over-year comparison since the early 1980s, the control board said.

Table win was off 4.2 percent for the year statewide, while baccarat fell 18.6 percent. Streshley said baccarat win has declined in four of the last five years. And the $2.5 billion wagered on the game is the lowest in eight years.

But the state's casinos managed to eke out a 0.17 percent increase in slot win for the year. In 2001 slot win generated 65.5 percent of the total gross revenue, up from 64.5 percent of the previous year.

Casinos on the Las Vegas Strip reported winnings of $4.7 billion, or a decline of 2.1 percent from 2000 -- again, the worst year-over-year decline since the early 1980s. The last time annual gaming win fell on the Strip was 1996, when gaming win dropped 1.4 percent.

The loss of high-end play on the Strip was apparent -- Strip casinos won $435 million from baccarat players in 2001, the lowest level since 1993, "which pre-dates the latest generation of Strip megaresorts," Ader wrote.

As a result, the Strip did not account for a majority of the state's gaming revenues in 2001. The Strip's share of the state's revenue for the year was 49.7 percent, down from 50.1 percent in 2000.

While the Strip casinos were having their problems, downtown Las Vegas had growth last year. The board reported the clubs won $683.3 million in 2001, up 1.4 percent.

This is the second straight year downtown Las Vegas has reported an increase in winnings.

Casinos in the Laughlin market in 2001 fell 2.6 percent to $545.2 million after an increase of 5.3 percent of a year ago. The average growth for Laughlin in the last 10 years has been 1.8 percent.

The Boulder Strip casinos reported a 2.4 percent increase to $614.4 million for the year. The average growth in this area in gambling win for the last 10 years has been 15.8 percent.

For 2001, Washoe County casinos reported $1 billion in win, off 5.7 percent. South Lake Tahoe casinos had $328.4 million in gross revenue, off 6.9 percent; Carson Valley registered a 3.7 percent increase for the year up to $93.2 million in gross revenue and Elko County reported a decline of 5.2 percent to $222.5 million.

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