Nevada Gaming Revenue Up Despite Flat Growth On Vegas Strip
The state of Nevada has reported a gross gaming revenue increase of 8 percent in February 2016 when compared to February 2015.
Based on the latest reports released by state’s Gaming Control Board, Nevada casinos registered total revenue of $989.8 million and were boosted by the Super Bowl and an extra day in February due to the leap year.
The growth is indicative of a strong year for casino operators. Casinos in the state have been witnessing growth in their revenue across all markets during this fiscal year. Michael Lawton, senior research analyst for the Gaming Control Board said that every casino in the state was showing positive trends. He attributed the long stretch of good performance to lower unemployment, better real estate markets and cheaper fuel prices.
Surprisingly it was Downtown Las Vegas that reported the best performance amongst all casino markets in Nevada with an increase of 9 percent. The Las Vegas Strip which is the state’s largest market saw revenue remaining flat during this same period.
The game of baccarat has been cited as one of the main reasons for this divergence. Most casinos on the Strip feature baccarat which is the favored game of high rollers, especially the ones from Asia. The anti-corruption campaign in China has deterred VIP gamblers from playing in Macau which has resulted in a twenty two month consecutive fall in gambling revenues. The negative impact on Macau’s casino industry has appeared to have a positive impact on the Nevada casino industry.
According to Lawton, baccarat revenue on the Strip fell 9.1 percent and its volume i.e. the amount staked by gamblers on the game went down by 15.1 percent in the same period. The Strip’s revenue excluding baccarat shows an increase of 3.23 percent for the fiscal year underscoring the impact of baccarat. But the loss is being made up by other games, resulting in flat revenue growth.
In a statement, Michael Lawton said,
We have a baccarat decline, but look at what else is happening. The rest of the market has been improving. And not just all the other regional markets, but within the Las Vegas Strip, other things are performing well. Slots, non-baccarat table games, sports pools, — that’s been able to overcome what we’ve been experiencing at the baccarat tables
Slot machines have been delivering better returns for casinos over the last year on the Strip. Analysts however expect baccarat revenue to pick up in the coming months.
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