MGM Resorts, Boyd post losses; AGA releases 2010 report on US casino biz

TAGs: American Gaming Association, Boyd Gaming, Las Vegas, MGM Resorts

american-gaming-association-2010MGM Resorts posted an $89.9m loss in Q1 2011, an improvement over the $96.7m it lost in Q1 2010. Revenues – almost two-thirds of which is now derived from non-gambling sources (food, entertainment, hotel rooms, etc.) – were up 3% to $1.5b. MGM’s share of revenue at its Macau casino (a joint venture with Pansy Ho) was up sharply, rising to $62m from just $26m the previous year. MGM’s stock rose over 10% on the news. So let’s get this straight… MGM posts a $90m loss and its shares shoot up 10%. Las Vegas Sands posts net income of $228m and its shares drop almost 10%. Okay, we officially give up trying to figure out the public markets.

Boyd Gaming also posted a loss in Q1, albeit a comparatively modest one to MGM’s. Boyd posted a 36% revenue gain to $564.9m, but total costs and expenses increased by the same percentage and operating margin fell from 10.6% to 8.5%, resulting in a loss for the quarter of $3.5m. Oddly, their stock barely budged on the news.

A broader perspective on the health of the US land-based casino biz is revealed in the American Gaming Association’s 2010 report, which show the 483 US commercial (non-tribal) casinos garnered revenues of $34.6b in 2010, a 0.9% increase over 2009. However minimal, it’s the first increase in three years, but before anyone breaks out the ‘U-S-A’ chants, understand that the number of people actually employed by the industry dropped 1.3%. Like the economy as a whole, this sector’s recovery is largely a jobless one.

Nevada casinos accounted for $10.4b of 2010’s overall revenues, a figure virtually unchanged from 2009, while Atlantic City’s take fell 9.4%. Gross gaming revenue at Nevada’s sportsbooks was $151.1m, a 5.5% hold. The NFL remains the number one draw for sports bettors, accounting for 43% of total wagers (although if Floyd Mayweather Jr. can stay out of jail for a few more years, basketball betting may nudge up slightly).

The survey also sheds some light on the average casino patron. They are more likely men than women, and most of them are in the 50-64 age bracket. (Extinction alert!) The percentage of Americans who gambled at a casino fell 3% from 2009’s 28% figure, and over 13m casino visitors failed to gamble so much as a cent during their visit. Slots were the top draw for 51% of gamblers, with blackjack (19%), poker (7%), craps (5%) and roulette (4%) ranking well behind. Meanwhile, just 1% of Americans admitted to have gambled online last year. Americans spent three times as much money gambling at casinos than they spent on movie tickets or ‘outdoor equipment,’ but spent three times more on cable television than they did in casinos. Thanks a lot, Treme!


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