Nevada gaming revenue declines

Cy Ryan and Richard N. Velotta

Friday, Jan. 11, 2002 | 11:05 a.m.

Winnings by Nevada casinos dropped in November, the third consecutive month of declines blamed on the terrorism in September.

The main reason was an absence of high rollers who like to play baccarat.

The state Gaming Control Board reported today casino win fell to $721.4 million in November, down 7.4 percent from a year ago. The clubs reported winnings, before taxes and business expenses, fell by $58.1 million.

It was the biggest percentage decline since February last year.

Frank Streshley, senior research analyst for the board, said the baccarat win fell by 80.1 percent or $43.8 million. He said $113.8 million was wagered on baccarat, the second lowest amount since November 1993.

"Baccarat dragged down the whole state," said Streshley. If baccarat was excluded from the monthly figures, the drop in winnings would have been only 2 percent, he said. Most of the baccarat decline came at Las Vegas Strip casinos, which reported winnings were down 81.2 percent or $43.9 million from the game.

Andrew Zarnett, a gaming analyst with Deutsche Banc Alex. Brown, said the plunge in baccarat business was no surprise and that industry watchers were given ample warning of an impending downturn.

"The results were very predictable based on much of the color we've gleaned from the fly-in business to Las Vegas during that time frame," Zarnett said.

He said analysts had been told by MGM MIRAGE officials that baccarat play was down, particularly from high-rollers from Asia who were frightened by the threat of biological terrorism during the anthrax scares.

"The high-end play suffered immensely during that time frame, but things have actually gotten better since that time," Zarnett said. "We'll get a better idea of to what degree things have improved in a few weeks, with the Chinese New Year celebration that occurs in early February."

Dennis Forst, a gaming analyst with McDonald Investments Inc., doesn't think high-end play has begun to rebound.

"We expected the activity to be down substantially," Forst said of the November time frame, citing travel fears as well as the recession. "We haven't heard of anything improving and the New Year's holiday was off.

"November marked five months in a row of declines in baccarat play, which shows that high-end gamblers were not playing even before Sept. 11," he said.

Streshley said statewide, winnings from blackjack dropped by 11.8 percent, craps was up 21.8 percent, roulette fell 17.2 percent and sports books gained 36.1 percent.

Slot win, he said, declined 4.4 percent or $21.9 million.

Areas hardest hit were the Strip, North Las Vegas and South Lake Tahoe.

The board reported it has collected $276 million in taxes in the first six months of this fiscal year from casinos, a decrease of 4.2 percent from a year ago. The state budget is built on a gain of 4.5 percent in revenues so there's a gap between what the state expected and what is being received.

The board said Strip casinos won $351.2 million, off 11.9 percent. It was the third straight month of decline and the largest percentage drop since the 12.6 percent in February last year.

Slot win at the Strip fell by 7.2 percent or $14.4 million. The board said revenue from 21 games was down 13.7 percent; craps rose 37.7 percent but roulette declined 21.4 percent.

Streshley said casino operators in Southern Nevada reported they had a strong weekend when hosting a heavyweight championship fight. But the rest of the month was off. He said there were 80,000 to 90,000 fewer attendees at the Comdex convention in November.

For the second straight month, casino win declined in downtown Las Vegas. The board said the clubs won $52.9 million, off 2.8 percent or $1.5 million from a year ago. Slot win was off 4.4 percent and game and table win dropped 2 percent.

The board said North Las Vegas casinos recorded winnings of $16.1 million, down 23.2 percent. Seven of the last nine months have seen declining revenues in this market. Slot win was off 26.1 percent and game and table revenue down 1.1 percent.

Casinos along the Boulder Strip reported revenue of $46.9 million, or 9.6 percent off from a year ago. Slot win fell by 11.1 percent and table revenue inched down .5 percent.

Laughlin casinos reported growth, posting a .7 percent gain to $45.1 million. While slot win decreased .2 percent, game revenue rose 6.7 percent.

The win in Mesquite of $8.5 million was up 12.7 percent.