Strip revenue drops in May with fewer weekend dates, analyst says

A New York-based gaming industry analyst expects gaming revenue on the Strip to be down from previous months in May, simply because there were fewer weekend dates that month.

Carlo Santarelli of Deutsche Bank said in a Monday report to investors that he expects gross gaming revenue to be down 8 percent in May from the previous year despite improving visitation for midweek conferences, meetings and trade shows.

The Nevada Gaming Control Board is expected to announce gaming revenue statistics in late June.

“Our … data projects an 8 percent contraction in year-over-year Strip gross gaming revenue in May,” Santarelli’s report said. “We note that our modeled Las Vegas Strip forecast calls for 0.9 percent year-over-year growth in May, given nuances in hold comparisons. With respect to the +22.8 percent year-over-year gross gaming revenue growth in April, relative to our forecasts for May, we would note that while April faced an easy baccarat hold comparison, the comparison in May is the toughest of the year, and as such, the volatility from month to month relates, in part, to hold comparisons.”

“Hold” is calculated from the amount won compared with the amount wagered.

Baccarat usually is the most volatile game in the casino. But there are also signs that there will be further volatility as a result of the number of weekend dates on the calendar compared with previous months, Santarelli said.

For the 31 days in May, there were 23 weekdays and eight weekend days. The average midweek traffic was 546,519 a day and the average weekend traffic was 661,334 a day, meaning that weekends drew 1.21 times the traffic of weekdays.

By comparison, there were 20 weekdays of 30 days in April and 10 weekend days with an average traffic of 604,921 on weekdays and 785,557 on weekends, meaning that weekends drew 1.3 times the traffic of weekdays.

April was filled with special events such as two sold-out concerts of Korean pop band BTS at Allegiant Stadium, the appearance of the National Association of Broadcasters trade show at the Las Vegas Convention Center and three days of the NFL draft on the Strip at the end of the month.

The biggest special event in May was Electric Daisy Carnival, which drew fans on weekdays and weekends.

Santarelli said estimated traffic for the whole month of April brought in $593.5 million in gross gaming revenue on the Strip, 22.8 percent better than in April 2021 and 23.2 percent ahead of prepandemic April 2019. He projects gaming revenue of $603.2 million, which would be 8 percent below May 2021 but 16.6 percent better than May 2019.

Santarelli did a similar analysis with Las Vegas locals traffic.

He said the average traffic per day was 77,099 in April on weekdays and 107,324 on weekends, or 1.39 times weekdays while May traffic was 85,253 on weekdays and 124,878 on weekends, or 1.46 times weekdays.

“Aggregate daily traffic in May was up about 10 percent from April, with both weekend traffic (+16.5 percent month over month) and midweek traffic (+10.6 percent month over month) up nicely,” he said.

Gross gaming revenue in April was estimated at $237.3 million, down 3.2 percent from a year ago, but up 14.4 percent from April 2019. In May, revenue is projected to be $289.2 million, up 11.9 percent from last year and up 40.1 percent from May 2019.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.