Gaming Numbers Better, But Hardly Good

It could almost be considered good news.

For only the second time in the past 11 months, Nevada casinos reported a single rather than double-digit decline in gaming win, this one coming in August compared to the same month in 2008.

Nevada’s statewide casino industry reported a win of $847 million in August, a 9.3 percent decline from August 2008 when the win was $934 million, according to a report released today by the Gaming Control Board.

It was the 20th straight month of revenue decline for Nevada’s biggest industry.

While a single-digit loss was encouraging, Frank Streshley, control board Tax and License Division chief, cautioned that the casino industry is expected to continue to suffer for several more months before an anticipated turnaround sometime in the first half of calendar year 2010.

Baccarat, a card game preferred by high end players, saw a 48.5 percent increase in win by casinos in August to $109.5 million. Without this play, likely the result of international players drawn to the Las Vegas Strip due to a weak dollar, the Nevada gaming win would have been off by double digits yet again, Streshley said.

“I can’t say we’re at the bottom, not with a 9 percent decline,” he said. “Again it’s not double-digit. Without the baccarat play it definitely would have been. So we still have a ways to go.”

The revenue report shows the gaming win in Clark County in August was down 6.7 percent to $708 million. On the Strip, the win was off by 9 percent and totaled $450 million.

Two Clark County markets, both with new properties, were the only two regions in the state to show an increase in gaming revenue. North Las Vegas, where Station Casinos Aliante Station opened in November 2008, saw gaming revenues up 22 percent to $22 million. The Boulder Strip area, where the M Resort Spa Casino opened in March, saw an increase of nearly 22 percent to $63 million.

The numbers were even bleaker in other areas of the state.

Washoe County saw a nearly 21 percent drop to $74 million, while the South Lake Tahoe market was off nearly 29 percent to $22 million.

For Washoe County, it was the 26th straight month of revenue declines. The August win for the county is the lowest for any August since 1989, Streshley said.

For the South Shore Tahoe market, the August win was the lowest since the board started keeping monthly statistics in 1983. In August of 2000, gaming win in this market was $44.1 million.

One factor to consider in analyzing the August report is that the three-day Labor Day weekend fell entirely within September this year, Streshley said.

Overall it was a tough summer, he said. For June through August, revenues were off 11.9 percent.

The continued decline in gaming revenue will keep the pressure on Gov. Jim Gibbons and the Legislature to deal with lower than anticipated tax revenues. A special session of the Legislature is a possibility if revenues don’t show some sign of recovery or at least stability by later this year.

Gaming taxes, a major source of state general fund revenues, are off 7.85 percent for the first three months of this fiscal year and total $153 million.

The forecast for this revenue source was a decline of 4 percent for this fiscal year, but Streshley cautioned that the target could still be hit if the industry rebounds in the second half of the fiscal year.

State Budget Director Andrew Clinger said the August report doesn’t change the budget picture one way or the other.

“We’re down about $7.5 million in gaming revenues so far,” he said. “It’s nothing too alarming at this point. We still have to wait until we get the final first quarter numbers and then we will make a decision.”

Those first quarter numbers are expected by the end of November.

With sales tax revenues included, the state is off by about $10 million from its projections so far this fiscal year, which began July 1. As to whether a special session of the Legislature will be needed, Clinger said it will depend entirely on how severe the shortfall becomes over the next few months.

But any decisions on how to balance the budget will include the Legislature, either in a special session or in cooperation with the Legislature’s Interim Finance Committee, he said.