February gaming win weak

Cy Ryan and Liz Benston

Wednesday, April 9, 2003 | 11:15 a.m.

The growth of Nevada's casino industry slowed considerably in February, the state Gaming Control Board reported today. An analyst said the monthly gaming win numbers were in line with expectations.

Casinos reported gross winnings of $765.1 million, up only 0.45 percent from February 2002. It was the smallest percentage gain in the last seven months.

Gov. Kenny Guinn said, "With the start of the war in Iraq and the uncertainty as to its length, I am very concerned on how much additional pressure this will put on our fragile tourist-based economy."

He said that tax collections from the gaming industry were $16.9 million below the amount predicted by the Economic Forum for this fiscal year. The state's budget is built on these forecasts.

The board said it has collected $411 million through March in taxes, a 5.9 percent increase from a year ago. The Economic Forum predicted the receipts would be $427.9 million.

Guinn said this shortfall in revenue could increase over the remaining months of this fiscal year, adding to the state's overall budget deficit.

Frank Streshley, senior research analyst for the control board, said the 0.45 percent increase compared with a 7.9 percent jump in February a year ago.

He said the Super Bowl was played in February last year because of the events of Sept. 11. This year the game was in January.

Game and table win fell by 4.1 percent. Streshley said. But he said baccarat jumped by 21.6 percent. The reason, he said was that the clubs "held" 21.4 percent, as opposed to the traditional average of about 14 percent.

Win from the 21 tables statewide dipped 7.5 percent; craps revenue rose 2.5 percent; roulette fell 22 percent and sports betting was down 84.2 percent, mostly because the Super Bowl was played in January this year.

Slot win rose 2.9 percent. A big increase of 149 percent was recorded by Megabucks as players chased a $39 million jackpot.

Casinos along the Las Vegas Strip reported winnings, which are computed before taxes and business expenses, of $620.4 million, up 0.67 percent from February a year ago. Although small, it was the seventh straight monthly increase in gross revenue. The gain compares with a 10 percent increase of a year ago in February.

Streshley said the only major event in Las Vegas this February was the Rolling Stones Concert at the MGM. "It was a pretty quiet month," he said.

Game and table win fell 4.5 percent on the Strip. Baccarat was up 26.1 percent; 21 play fell 11.9 percent; craps was up 1 percent; roulette fell 27.2 percent and sports betting was off 52.4 percent.

Slot win on the Strip rose 5.1 percent. Megabucks revenue jumped 123.2 percent.

Gaming revenue on the Strip was up 7.1 percent for the first quarter to date, which accounts for the shift in the Super Bowl and "gives us increased confidence in our (first quarter) estimates for the Las Vegas based operators," Merrill Lynch analyst David Anders said in a research note to investors today.

While slot win was up, slot volume on the Strip -- a better indicator of visitation and therefore overall demand for Las Vegas -- was only up 2.8 percent in February, Anders said. In two months of first quarter play, Strip slot win has jumped 4.4 percent and slot volume has increased 8.7 percent, results aided significantly by February's 123 percent increase in Megabucks revenue, he said.

Baccarat -- a key indicator of high-end demand for Las Vegas -- was aided by a significantly higher hold percentage of 21.5 percent in February compared to 15 percent the same month a year ago, he said. That was offset by a 12.4 percent decline in baccarat play. Baccarat play is about 9 percent below last year's already depressed levels and revenue is down about 6 percent so far this quarter, he said.

"We expect this trend to continue on account of a weak domestic stock market and increased long-haul travel restrictions owing to the (Severe Acute Respiratory Syndrome) virus," he wrote.

The Gaming Control Board said downtown Las Vegas casinos reported $55.2 million in gross win, down 1.89 percent from a year ago. Revenue at the downtown clubs has fallen in seven of the last nine months. Slot win fell 1.6 percent and game revenue was off 2.5 percent

North Las Vegas clubs registered $18.7 million in win, up 7.6 percent from February of a year ago. It was the third straight month of increased win. Slot win was up 8.3 percent and game revenue inched up 1.7 percent.

Casinos in Laughlin won $47.2 million in February, down 1.3 percent. This comes after two straight months of growth in the clubs on the Colorado River. Slot win increased 1.7 percent but table revenue fell by 18.7 percent.

The board said Boulder Strip clubs registered a 4.7 percent gain to $54.9 million in February, reversing a 4.1 percent downturn in January. Slot win grew 6.6 percent but table revenue was down 6.8 percent.

Mesquite casinos won $9.4 million, up 4.3 percent. Slot win rose 12.4 percent but table revenue was off 26 percent.

Clubs in the balance of Clark County posted winnings of $62.4 million, an increase of 1.6 percent from February of a year ago. Slot win rose 0.5 percent and game and table win was up 8.7 percent, as opposed to drops in most other jurisdictions in Clark County.