Nevada gaming revenues decline 3.1 percent in August; Strip down 1.2 percent

It could have been worse.

A 3.1 percent decline in Nevada gaming revenues during August disappointed some observers who hoped July's $1 billion revenue figure foreshadowed a stronger recovery.

Statewide, gaming revenues hit $859.2 million, which was down from $886.8 million in August 2011, according to figures released Wednesday by the Gaming Control Board.

On the Strip, gaming revenues fell 1.2 percent to $490.9 million, down from $496.9 million a year ago. The Strip's figure was also $109 million less than what casinos took from gamblers during July.

"These results point to a continued uneven recovery on the Las Vegas Strip, which represents no change from prior and more recent views," JP Morgan gaming analyst Joe Greff told investors.

The Strip and statewide numbers could have been far lower.

Baccarat revenues grew 32 percent in August to $124 million. The amount gamblers wagered on baccarat increased 30 percent to $1 billion. Baccarat play has been carrying the Strip in 2012. Through August volume is up almost 14 percent while revenues from the game are up 16.9 percent.

"Strong baccarat play quarter to date will help support third quarter estimates, but do not reflect broader fundamentals on the Strip and highlight the volatility of this segment," Susquehanna International Group gaming analyst Rachael Rothman told investors.

Other table games, not including baccarat, saw revenues decline 8.5 percent.

Revenues from slot machines on the Strip fell 9.1 percent. The amount wagered on slot machines by Strip customers also declined for the fifth straight month.

Analysts view slot machine play as an indicator of mass market gaming appeal.

Prior to the past five months, slot machine volume on the Strip increased 11 out of 13 months.

"While the majority of Las Vegas indicators have improved in 2012 (visitation, average daily room rates, occupied room nights, etc.), we continue to see consumers slowly stepping away from the slot machines," Macquarie Securities gaming analyst Chad Beynon said. "The Las Vegas visitor has significantly changed its spending patterns from gaming to nongaming post-recession, with casino only accounting for roughly 40 percent of (the) wallet share on the Las Vegas Strip."

Rothman told investors August "was not a great result for Strip gaming fundamentals." She said, however, the estimates analysts have placed on Strip operators "are safe" given the continued strength of baccarat.

Most analysts said the baccarat numbers would reflect positively when companies such as MGM Resorts International and Wynn Resorts Ltd. report third-quarter earnings.

Stifel Nicolaus Capital Markets gaming analyst Steven Wieczynski said results from August didn't alter his positive view of MGM Resorts, which operates 10 Strip casinos, including Aria at CityCenter, Bellagio and the MGM Grand.

"Soft summer results aside, we continue to believe Las Vegas is on the path to a gradual recovery, consistent with continued improvements in overall visitation levels and encouraging forward-looking group booking commentary," Wieczynski said.

Through August, gaming revenues statewide are up 1.7 percent over the same eight months of 2011. On the Strip, gaming revenues are up 2.6 percent.

During August, casino revenues in Clark County as a whole fell 3.35 percent to $727 million. Casinos along the Boulder Strip and Henderson saw gaming revenues decline 17.7 percent while North Las Vegas casinos experienced a 13 percent drop. Casinos downtown saw gaming revenues decline 8.4 percent.

There were bright spots in the state. Mesquite gaming revenues grew 4 percent, the only reporting area in Clark County to show an increase.

Meanwhile Washoe County gaming revenues as whole were up 5.1 percent while casinos in Reno saw revenue figures climb almost 4.7 percent. North Lake Tahoe casinos recorded the largest single month increase of any location in the state, up 18.4 percent.

The gaming taxes collected by Nevada in September based on August gaming revenues were $49.6 million, a 5.2 percent increase over the same period a year ago. Gaming tax collections are up 5 percent for the first three months of the fiscal year.

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871. Follow @howardstutz on Twitter.