CASINO

Nevada’s January revenue fall underscores baccarat dependence

TAGs: baccarat, David Schwarz, Gaming Control Board, Las Vegas, Nevada

nevada-casino-baccarat-revenue-fallNevada casino gaming revenues fell 12.4% to $909.2m in January and it’s entirely Asia’s fault. January 2012 benefited from the Lunar New Year celebrations, whereas this year’s celebrations fell in February. The comparative absence of lucky-money-bearing Asian whales was even more pronounced on the Las Vegas Strip, where gaming revenue fell 18.7% to $507m.

Look at the individual game revenue tallies and the Lunar New Year disparity grows even more pronounced. While all games besides blackjack (+14.2%) were in negative territory compared to January 2012, Asian-themed games were off disproportionately so. Baccarat revenues were down 49.95%, mini-baccarat was off 55.5% and pai gow was off over 66%.

By comparison, the declines experienced by craps (-15%), roulette (-10.4%), keno (-10%), three-card poker (-8%) and slots (-1%) look positively buoyant. That said, the 127% decline in bingo revenue resulted in the only net loss ($80k) the casinos suffered in January. But if you ever wanted proof that the real statistical edge in gambling is held by governments, the state of Nevada collected $68m in taxes this January, up 18% over last year.

Nevada’s sportsbook also took a beating in January, with revenues down 68.5% to $8.2m on a hold of 2.39%. Football was the books’ rotten apple as the rash of college bowl favorites covering on New Year’s day resulted in a net loss of $5.79m on a negative 3.27% hold. (The books aren’t crying too hard, though, having earned $60.5m off football wagers from September through to this year’s record Super Bowl handle.) Basketball saved Nevada’s bacon in January, with a 9% hold producing $13.95m in revenue, up 21.5% over last year. Horseracing revenue fell 9% to $3.97m on a 16.7% hold.

MIXED BLESSINGS FOR BACCARAT-RELIANT CASINOS
David G. Schwartz, director of the Center for Gaming Research at the University of Nevada, Las Vegas, recently published a report examining the evolution of casino table games on the Las Vegas Strip between 1985 and 2012. Using Nevada Gaming Control Board statistics, Schwartz revealed that baccarat’s popularity is coming at the expense of blackjack and craps, a shift that has profound implications for Strip casinos.

In 1985, blackjack accounted for 77.2% of all casino table games and 50.2% of table game revenues. By 2012, those numbers had fallen to 50.5% and 23.6% respectively. Over the same period, craps’ share of table game revenues has fallen from 28% to 8.9% and the concentration of craps tables on casino floors has dropped from 10.6% to 7.3%. Roulette, meanwhile, has mimicked the slow and steady tortoise, increasing its presence on casino floors from 6.6% in 1985 to just under 10% last year. Roulette’s revenue contribution has mirrored this rise, going from 6.6% to 10.1%.

Baccarat, on the other hand, surpassed blackjack in earnings in 2009 and hasn’t looked back. Baccarat’s share of the table games pie has gone from 13.6% in 1985 to just under 44% last year. Its presence on the casino floor has risen from 3.1% to 22.2% over the same period. This increased reliance on a luck-based game like baccarat means Strip casinos can expect far greater variance in their monthly revenue tallies and casino investors can expect a rollercoaster of emotions. But as ever, the government simply expects to get paid.

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