Summary: Gaming revenues declined in Nevada for the month of July, with the Strip seeing an almost 6% drop.
Every month, the Nevada Gaming Control Board provides an inside look at the earnings from the casinos in operation throughout the state. For July, the numbers were less than impressive, with the overall earnings dropping, mainly due to the decrease on the Las Vegas Strip.
First Decrease Since January
The monthly gaming revenues for July were lower than normal, marking the first time the state had seen a monthly decline since January 2018. The drop was led by a decline on the Las Vegas Strip of 5.75%. Reportedly it was the lack of events and a room rate decline that caused the numbers to decrease in the gaming sector.
For July, the Las Vegas Strip casinos earned only $533.1 million. This was a sharp decline from the $565.6 million earned the same month on 2017. Looking at statewide revenues, Nevada earned $996.4 million which is less than 1% from the previous year.
While the Strip was down, other areas like the South Lake Tahoe region and North Las Vegas were up, reporting record double digit revenues for the month. According to analysts, the results were disappointing but it has been estimated that gaming only counts for around 25 to 30 percent of the casino revenues on the Las Vegas Strip, which will vary based on operator and the business model used.
When looking at the numbers for the Strip, baccarat saw an 18% decline in revenues with slot machine revenues falling close to 5%. Hurting the area as well was the drop in visitor numbers. The Las Vegas Convention and Visitors Authority reported that visitation dropped just over 3% to less than 3.66 million visitors. The drop in visitors was reportedly due to a decline in convention attendance which was down almost 20%.
July was also not as lucrative due to the 4th of July holiday falling on a Wednesday. The region does much better when the holiday is on a weekend. While the Strip did poorly for the month, the locals market did quite well. The Boulder Strip was up over 18% while the casinos in North Las Vegas was up almost 15%. An 8% increase was seen with revenues generated from the casinos in Downtown Las Vegas.
South Lake Tahoe was the big winner, with revenues up 25.5%. The region earned a total of $29.9 million. On the downside, gaming in Reno decreased by 1.4%. While Reno does use revenues from their gaming industry, they benefit more from the major tech companies that have moved into the region.
While no one is particularly worried about the lower revenue earnings, companies are being affected by the decline in revenue, as well as competition from Nevada online casinos.
Mark Frissora is the CEO of Caesars Entertainment who recently warned the companies shareholders that they were not increasing their financial outlook for the third quarter as Las Vegas had seen softening in demand due to fewer events.
The stock for Caesars dropped close to 3% yesterday due to the news of the July revenues report.
MGM Resorts saw a decrease in stock of 2.4% with the Las Vegas Sands dropping 0.7% and Wynn Resorts dropping 0.15%.
It will be interesting to see if the gaming companies can make a comeback in August. The revenue reports should be released in the next few weeks as August comes to an end and the revenue reports are finalized for each area of the state.