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Nevada Casinos Benefits from High Baccarat Game Play in February 2010
The state of Nevada achieved its first double-digit gaming revenue improvement in almost three during February 2010, due to the Super Bowl weekend and the grand celebrations for the Chinese New Year, which attracted a lot of overseas tourists in the Strip.
Statewide, gaming establishments posted total gambling revenues of $946.6 million dollars during the month, a 13.9% improvement compared with February last year, when gaming facilities earned $830.9 million dollars, according to the results released by the Gaming Board on April 14th, 2010. The last time that the state of Nevada experienced double-digit gaming growth was in July 2007.
The overall statewide total was the biggest gaming increase in a month since December 2006 and just the 2nd statewide gaming win improvement since November when profit grew by 4.3% after dropping for twenty-two months.
Casinos in the Strip were the biggest beneficiary of the Chinese New Year gamer traffic in February 2010, earning almost $568 million dollars in gambling revenues, a 32.9% improvement compared with $427.4 million in the same month in 2009.
The result was the biggest improvement in a single month since November 2009. Casino facilities benefited immensely this year because both the Super Bowl and the Chinese New Year happened in February. Last year, both celebrations straddled January and February.
Control Board Tax and License Division Chief Frank Streshley said that the month of February turned out to be a perfect month. He said that it was a historic record for any celebration of the Chinese New Year. Aside from that, the high volume of player betting on the game of baccarat and the overall hold percentage was way above the average amounts.
Boosted by visitors during the Chinese New Year, gamers on the Las Vegas Strip wagered more than $1.2 billion dollars on baccarat during February 2010, up by 132% from 2009. That transformed into a win of $205 million dollars for casino operators, up by 255%. The hold percentage on the game was 17.04% vs. 11.12% last year.
Streshley said that overall hold percentage was above average. Streshley said that aside from baccarat, all casino table games experienced an improvement. The Super Bowl weekend also helped improve sports betting, but it also supported casino table games as well.
Some gambling analysts are worried that the Las Vegas Strip may be relying too much on visitors to make up for the absence of American players who have been crippled by the economic recession.
University of Nevada, Reno economic professor Bill Eadington, said that the increase in baccarat game play over the past half year is an excellent evidence of the growing strength of the Chinese economy aside from the advertising efforts of U.S. casinos with Macau gaming facilities.
But the downside is that there is little improvement in the domestic tourist market of the Strip. Wells Fargo Securities gaming analyst Dennis Farrell Jr. said that Las Vegas Strip's results boosted Nevada. Farrell Jr. said that he is worried that the scaled down airline capacity for the market, weak convention reservation and smaller gaming spending will continue to affect the health of the market.
Farrell Jr. said that despite the positive revenue results, they remain cautious as they believe that operators in the Las Vegas Strip will continue to face a difficult environment. When combining the results of the first two months of the year, gambling revenues are up by five percent statewide and 13.4% on the Strip.
But Frank Streshley is not ready to say that the gambling fortunes of Nevada are healed. He said that February may be the last month that Nevada would enjoy a double-digit gaming improvement in a while.
Streshley said that they are now entering the months that do not have a lot of special events where casinos can usually attract a lot of customers. The 13.9% improvement in statewide gambling revenues in February 2010 did not translate into improved gaming tax collections.
The Gaming Control Board said that the state of Nevada earned $46.8 million dollars during the month, a 28.1% drop compared with $65.1 million dollars in the same time in 2009.
For the first nine months of the current fiscal year, gambling tax collections dropped by 5.2%. Streshley said that gambling taxes earned from high-end play like during the Chinese New Year, are usually reported in the following months as markers are earned. He said that with more than $1.2 billion dollars wagered on baccarat during February 2010 and it might take several months to pay off the markers.
Slot machine spending also supported Strip casinos. Wagers bet $3.2 billion dollars on slot machines, an improvement of 1.5% from a year ago and the first monthly improvement in spending on slot machines in twenty-six months.
Statewide, revenues from slot machines were $520.7 million dollars, down by 7% compared with a year ago. A total of $8.9 billion dollars, down by 2.3%, but one of the smallest drops in months.
Casino facilities won $415.2 million dollars from casino table games, which included the figures from baccarat, an improvement of 59.7% from a year ago. Players wagered $2.9 billion dollars on casino table games, up by 37%. Washoe County also experienced a spillover from improved high-end game play giving the northern area of Nevada, including Reno, its first gambling revenue increase in thirty-two months.
Casino facilities in Washoe won a total of $60.9 million dollars from players, up by 2.7% compared with $59.3 million dollars collected in 2009. Gaming revenues from casino facilities in Reno were up by 4%. The results from the Strip did not influence the local market in Clark County.
Overall, gaming revenues in Clark County were up by 16.5%. But North Las Vegas casinos wee down by 14.5%, while Clark County's balance was down 15.4%. Gaming revenue in the downtown area was down by 5.8% and the Boulder Strip gaming revenue was off by 2.3%. Streshley said that local gaming markets will continue to be lower than the Strip in terms of gaming revenue. He added that is what all the recovery models have featured.
Danny McCain - Wednesday, July 28, 2010