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October 21, 2014

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UPDATE: Gaming win plummets in May figures

The state’s tax coffers got hit with a double whammy in May when gamblers spent less and won more from casinos, the lowest take in the last 11 months and the largest percentage decline in more than 10 years.

Gambling revenue at Nevada casinos plummeted 15 percent in May compared to May of a year ago, falling below the billion dollar mark with winnings of $970 million – the fifth straight month of year over year declines.

Strip gambling revenue, or win, fell 16 percent over the same period as slot revenue fell 15 percent and table game revenue dropped 18 percent. The Strip accounts for more than half of the state’s gambling revenue.

Penny slots may have saved the day. While revenue from most other slot machines fell in the double digits on the Strip in May, penny slot revenue was up 14 percent from a year ago and is up 28 percent for the past 12 months through May. The increase in penny slot win, together with declines in other kinds of slots, is partly because of the fact that casinos have replaced higher-denomination slots with more popular penny machines.

On the Strip, blackjack fell 28 percent, craps fell 14 percent, roulette fell 32 percent and baccarat fell 2 percent.

Gambling revenue fell 17 percent at casinos downtown, 30 percent on the Boulder Strip, which includes Henderson casinos, and 29 percent in North Las Vegas. Win at suburban casinos around the rest of the valley fell 8 percent.

Gaming Control Board spokesman Frank Streshley said there were no huge concerts or big title fights during the month to draw tourists. The Oscar de la Hoya-Floyd Mayweather fight, one of the biggest in history, drew record crowds in May of last year. But there was an extra weekend this past May, making the revenue figures look even worse.

A big part of the problem in May was a simple fluke that had nothing to do with the economic downturn. Gamblers were lucky at slots and even luckier at the tables in May compared with a year ago, a discrepancy so significant that it’s just about as rare as a cold spell in July.

All games on the Strip – which typically hold, in total, 13 percent of wagers – held only 11 percent. Roulette held 17 percent instead of the typical 19 percent. And pai gow only held 7 percent instead of the usual hold near 15 percent.

Washoe County casinos, where revenue fell 9 percent, recorded their 11th straight month of lower gross gaming win. Casinos in the Carson Valley area were the only ones to show a strong performance, up 7 percent. South Lake Tahoe was off 24 percent and Elko County casinos were flat.

As an example of the players winning more, Streshley said the “hold” percentage on the Strip in blackjack is traditionally 11.5 percent but it fell to 9.1 percent in May; roulette’s “hold” was 17 percent, down from the 18.5 percent average; craps held 11.3 percent of the money wagered, down from the usual 13.5 percent.

And the casinos in the balance of Clark County were off 7.6 percent with slot win falling by 10.8 percent. But winnings on the tables were up 8 percent and it was one of the few markets that showed an increase in table game revenue.

It was more bad news for state government. The taxes collected reached $63.9 million, down 22.8 percent from a year ago in May. And so far this fiscal year, tax collections from the gambling industry are 5.9 percent lower than the previous year.

Compared to the predictions of the Economic Forum, upon which the state budget is based, the tax collections are 1.8 percent below the forecasts for this fiscal year.

Gov. Jim Gibbons said the bleak gaming revenue report highlights "the ongoing fiscal turmoil facing our state." He said the state will close this fiscal year $14.7 million below predictions from the gaming tax collections.

"This is an incredibly difficult time for the state of Nevada, and it appears that we may need to prepare for an additional shortfall to our general fund for the fiscal year that just began", he said.

"The gaming industry is an essential thread in the fabric of Nevada's economy and while times may be difficult now due to economic struggles nationally, I am fully confident the industry will turn back around." He said it is continuing to invest in the state through the continuing construction, especially in Las Vegas.

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