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Gaming revenues drop 14.1 percent in April

Luck, not the economy, sunk Nevada’s gaming industry in April.

Gamblers played lucky and the casino “hold” percentage suffered, sending statewide revenues to their seventh straight month of double-digit declines. April was also the 16th straight month that gaming revenues fell from the prior year.


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  • Statewide, gaming revenues were $859.4 million during the month, compared with $1 billion in April 2008. In the first four months of 2009, casino revenues statewide are down 14.6 percent.

    “We were disappointed with the number because we were comparing with a 5 percent decline a year ago,” said Frank Streshley, chief of the Gaming Control Board’s tax and license division. The agency reported the April figures on Friday.

    On the Strip, gaming revenues were $441.3 million in April, a decline of 15.8 percent compared with $524.1 million casinos earned a year ago. Revenues are down on the Strip 16.6 percent for the year.

    The problem was hold percentages — the amount of money casinos collected based on the amount wagered.

    Customers gambled $2.2 billion in April on table games, which was an increase of less than 1 percent from a year ago. However, casino revenues from table games was $251.6 million, a decline of 20.5 percent. The hold percentage for tables games was 11.45 percent compared with 14.47 percent a year ago.

    Susquehanna gaming analyst Robert LaFleur said the economy might be impacting the habits of gamblers, which, in turn, has affected hold percentages.

    “There has been a recent trend where players that are up have been more likely to walk away from the tables and cash out as opposed to playing longer, which can depress hold percentages,” LaFleur told investors.

    Streshley estimated that if casinos held the same percent they did a year ago, gaming revenues would have been $66 million higher, slicing the monthly decline in half.

    “Luck definitely played a factor and had a huge impact on gaming revenues,” Streshley said.

    Revenues from slot machines were $596.2 million, a decline of 11.2 percent. Gamblers wagered $9.7 billion on slot machines in April, a decrease of 7.9 percent from a year ago, while the hold percentage on slot machines was 6.17 percent, compared with 6.4 percent in April 2008.

    Wall Street wasn’t surprised by the continued decline in Nevada’s gaming revenues. The nationwide recession, which has led to reduced visitation, cutbacks in consumers’ discretionary spending and high unemployment, continues to hurt the casino industry.

    During recent investment forums and in talks with analysts, casino company executives have said they have witnessed some market stabilization. Weekend business has begun to improve, but not to the levels the gaming industry experienced a few years ago.

    “The tone in recent comments by casino executives has remained cautiously optimistic,” Wachovia gaming analyst Dennis Farrell Jr. told investors Friday. “(However), we think Las Vegas Strip operators will continue to face a challenging environment.”

    Gaming taxes based on the April casino revenues fell 5.9 percent to $51.8 million, the smallest monthly decline of the current fiscal year. However, gaming tax collections in the fiscal year are down 14.6 percent.

    Two areas of Clark County were the only reporting areas statewide to show revenue increases compared with a year ago, due in the most part of the openings of new hotel-casinos.

    North Las Vegas gaming revenues were up 5.4 percent because of the opening last November of Aliante Station. Revenues from Boulder Strip area, which also covers casinos in Henderson, climbed 2.3 percent, due to the August opening of the Eastside Cannery and the March opening of M Resort.

    However, the decline of 14.9 percent in the area known as the balance of Clark County pointed toward an overall decline in what locals are wagering, according to analysts.

     

    Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871.

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    Fair and Balanced Fred wrote on June 05, 2009 06:49 PM: The article writer states: "Luck, not the economy, sunk Nevada’s gaming industry in April."

    Is the writer high on Oxycontin?


    casinocon wrote on June 05, 2009 06:22 PM: Norbert, I live in Las Vegas and I agree with you, the resort fee is total B.S. You should file a class action lawsuit, it worked for getting Casino/Resort to stop charging energy surcharges (yep, I got stuck with one of those, and I told the desk clerk that I would pay it if the Sahara turned off their neon signs from 3-8am. I mean really, charging a customer for the Casino's excessive signage use is ridiculous. Just up the price of the room slightly, don't charge a "resort fee" for an icky hotel like Palace Station (maybe, charge an O.J. fee and let folks tour the scene of the crime). It is a total joke.


    Norbert wrote on June 05, 2009 05:40 PM: As a former out-of-state visitor, I rarely come to Vegas anymore. The thing that bugs me the most is the hidden "resort fee". When you book online, you think you have paid in full for your hotel stay. However, when you check out, you find resort fees due in the neighbor of $25, $19.95, and even $5, at the M, Station, and Coast casinos. This is a ripoff and leaves a very bad taste in the mouth of the visitors. Sure, we can afford it, but it seems they are playing dishonest with us, no matter how they try to justify it with free local phone calls, etc. If we can't trust them to quote a honest price when we make a reservation, how can we trust them when they say the have fair games of chance in their casinos. As always, it seems they are trying to nickle and dime us to death, from the moment we arrive at the airport and rent a car until we board the plane to depart. Are all Vegas residents of this mind set?


    Bill wrote on June 05, 2009 04:47 PM: I agree with Whatever. The casinos hold may be down but from my experience I found high table limits and very poor pay tables om the video poker machines. I enjoy playing blackjack but I can't afford the high table limits. I have found some of the VR blackjack tables with low limits but they seem to be few and far between. I will not play video poker with a poor pay table. Therefore my visits have been less numerous and I don't gamble as much as I have in the past. No one in my group had much luck and we didn't see anyone around us hitting much of anything. I think the casinos are hurting themselves with tighter machines, higher limits and fewer comps. The bean counters are ruining the casinos and I don't think they realize the cost cutting is hurting them more than higher payouts ever would. I also think they have no idea how badly they've hurt themselves and will continue down the same road and there will be no recovery, it's really sad.


    Greg wrote on June 05, 2009 03:51 PM: Here' the bigger picture.

    President Obama is showing in Office he can effectively lead, both at home and abroad, in getting things done with Congress, banks, industry and other nations.

    As such, big money will get behind him, and make the necessary strategic adjustments as he nudges the country towards a more progressive-center, less "everything goes-hands off anything", public policy nation.

    The second term is when it is more likely he will be able to nudge things more favorably. Change is slow when it effects 300 million people, like manually pushing a barge down the muddy Mississippi.

    The nation's current spending and debt levels, despite all the rhetoric, can be paid down with small federal tax increases, just nobody is talking about it that as an option, certainly in this economy for banks and business.

    Bush created that mess, with lots of help, i.e. deregulation, greedy investors, brokers and corporate executives, and heavy spending at all levels of society.

    National debt can also be reduced by higher interest rates, perhaps even to 10 percent in 6-7 years.

    And don't think gaming companies with massive debt from binge and purge spending will not look to higher interest rates for help, if they cannot get returns and rewards from heavy, effective marketing creating bloated revpar and cash flow, as in recent years. They will.

    Higher interest rates bring the net present value of their debt down, and create opportunities for them to cash in from resale-reversion proceeds when resort properties are sold in the future, still having lower interest debt attached to them.

    Things have to change for people to make money, how it works, up and down. It's the big, huge swings, ala the last few years, that hurt lower and middle class families the most. That has to stop with better Congress performance.


    fred wrote on June 05, 2009 02:14 PM: If the greedy casinos can’t keep customers we need to raise the tax in order to stabilize our revenue from them.


    jeff wrote on June 05, 2009 01:45 PM: Let me help u out to save a couple articles. May will be a really good month for visitors, but revenues will still be down... but June is gonna be a disaster with a huge visitor drop and there will be doom and gloom reports everywhere.


    David wrote on June 05, 2009 01:22 PM: Online gambling is for the true degenerate gamblers. I think most people enjoy the interaction in a brick and mortar casino. You can't get that online. Besides, I wouldn't trust any online casino. Below is on an article alleging a dishonest online gaming site.

    http://thedealerslounge.yuku.com/topic/4377


    VegasSmitty wrote on June 05, 2009 12:49 PM: Less comps = less play. Its almost immpossible to get a drink, no cocktail waitresses. I'll stay home till they put things back the way they were.


    IMBO wrote on June 05, 2009 12:26 PM: Sounds like the economy is changing and stabilizing at about 10-15% lower than it was, and all companies should get used to this level.

    Also, this new level is based on the deals that people are given now, not the previous pricing.


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