Two Way Hard Three | Las Vegas Casino & Design Blog

September 12, 2011

July NV gaming numbers: We can handle it

Posted by daveschwartz

The July Nevada gaming numbers are out, and I've sliced, diced, and spliced them to exhaustion. After the jump, I'll share my thoughts on what's going on in Nevada casinos.


I've got two reports up. First is the July 2004-2011 historical comparison. The second is the rolling six-month summary that I update each month, which now reflects February to July 2011.

Each of these gives a slightly different perspective on the month; one compares July to July, going back to 2004, and the other looks at the recent trends.

Looking from year-to-year, it's hard not to see this July as an improvement, if only because the state posted a moderate increase (nearly 4% year/year) without the Strip having a humdinger of a baccarat month. That points to a possible broader recovery for the gaming market throughout the state. Well, at least in the southern part of the state--the north still has its problems.

The best news that July brought is that, statewide, slot handle increased, as it did in June. This is, in my opinion, the best barometer for the true demand for gambling among players. The slot handle, if you'd like a reminder, is the total amount of money that people played in the month. Let's say you put $500 into a slot machine, playing $3 a spin. After 500 spins, you might have hit a few small jackpots and won enough to keep you playing. At that point, your total handle would be $1,500, not $500, which is just your total coin-in (or, more accurately, cash-in).

A bigger handle means that people are actually playing more. Either they're bringing more money with them, or they're not cashing out when they win.

Combined with a lower hold percentage(down just slightly, but still down), that means people are getting more bag for their gambling buck, which will probably translate into more satisfaction and more return visits.

Looking at the last six months, things look even better. May and June were great months, even discounting the return-to-normalcy baccarat hold bounce the Strip got in June. July was a decent month, and not a spectacular one, and that's again good news. Table revenues on the Strip continue to remain a strength, with five straight months of increases.

It remains to be seen what early August's financial market roller coaster will mean for that month's revenues; it's possible that the positive trend that's been building on the Strip and statewide will hit a wall, but it's also possible that visitors weren't spooked and continued to play as they had been.

All in all, it's been an interesting year for Nevada's gaming industry, to say the least. It's not the unvarnished gloom of 2008-10 or the unmitigated boom of 2004-07, but somewhere in between. While that make it harder to analyze, it hopefully makes for more interesting reading.

Categories: Dr. Dave Schwartz, Gaming Numbers
Tags: nevada gaming revenues


Comments

Read archived comments (5 so far)
September 12, 2011 3:09 PM Posted by BigHoss

I think you're right to wonder about August. And I'm really surprised it didn't show up a little bit more in July. I think a lot of people were getting skittish by the end of the third week of July with the debt ceiling deadline approaching. But I guess there's a natural lag time between market events and when it hits the numbers in LV, ie: most people wouldn't cancel a trip because their investments are tanking now, but they might not schedule a trip in the near future.

September 12, 2011 6:58 PM Posted by Sam

"Combined with a lower hold percentage(down just slightly, but still down), that means people are getting more bag for their gambling buck, which will probably translate into more satisfaction and more return visits."

Dr. Dave, I know we outside the system like to believe this, but is there a single exec in the casino industry who really thinks, "You know what, we're gonna buck the trend, and start offering better games, because players will respond!" Seems to me like the move is still to tighter slots and worse table game odds, at the player's expense.

To add on, do you even think a single casino is even asking the question "If I offer better odds/holds for my players, will I see more coin-in?"

September 13, 2011 4:12 AM Posted by Jeff in OKC

That is the marketing strategy of the Las Vegas Club downtown. "Our slots are a certified 40% looser", or something like that. It seemed to be working when we were there a couple months ago. The slot floor was much busier than usual and we play there every trip.
The most telling thing for me was my observation that "The Munsters" machine that I have played for at least 7 years was paying in a different, looser fashion. I am convinced that if you play a machine enough times, you will begin to understand how it has certain patters of how it pays bonuses and jackpots. Not enough to win, but a feel for it's rhythms.
I don't know if it has paid off in the long run for Play LV ( the operator of the Las Vegas Club, the Plaza & the legendary Western), but it did seem to spike interest when they first did it and got Golden Gate owner Derek Stevens to make some snarky comments about it to the Sun.

September 13, 2011 8:57 AM Posted by Dave

Sam--Jeff is right, though if I recall correctly, Mr. Stevens made those comments to me for Vegas Seven.

Judging from the amount of play I saw the last time I was in there I'd question whether it was working that well, but at least they're trying. And if Jeff says the place is busier when he's there, that's some evidence that it's working.

The slot ops folks I talk to are definitely aware that their players are sensitive to time on device. They don't share with me whether this impacts their decisions re: hold, but they know that higher hold-->less time on device-->less happier players.

September 13, 2011 3:22 PM Posted by Sam

Thanks for the feedback, guys - I forgot about the Vegas Club's efforts. I suppose I was stuck in my strip-biased mind...I always have dreams of Caesars' or MGM embracing a similar philosophy.

I suppose at the end of the day, it's the difference between tourist versus local casinos? For some reason, I have this image of Gary Loveman falling out of his chair laughing if someone suggested to him it made business sense to loosen slots and table games...