After a long day, I've finally finished crunching the August Nevada gaming numbers. If you want some historical perspective on this month, keep reading after the jump.
August 2011 was a strange month for Nevada casinos. Overall it was a bad month, with a 6.10% revenue decline, but the picture wasn't totally gloomy. Thanks to slot hold rising statewide, slot win rose ever so slightly. With the handle falling just as slightly, this basically means that the total amount played decreased slightly, but machines kept just enough to post a revenue gain.
This isn't all greedy casino owners tightening machines. As I argued in a paper nearly two years ago, while there's been some drift upward in hold percentages at the denomination level, players migrating to penny slots, which routinely post average hold percentages over 10%, is the chief driver of "slot hold inflation." That doesn't speak directly to August's issues, but it's not a bad thing to have in the back of your mind as you second-guess casino operators.
A quick look at the numbers (page 3 of this pdf) should make August's problems perfectly clear: the $1.1 billion or so drop in baccarat handle. That's a nearly 59% decline. For whatever reason--and you've got to imagine that the early-August stock market jitters and near-shutdown of the federal government didn't help--high-end play didn't materialize this year like it did last. Granted, August 2010 was (I think) a record month, but a 59% decline has got to symbolize something.
Besides that, it was a mostly average month for the rest of the state. Carving baccarat out of the table pie, there was actually a slight gain in table revenues statewide (0.87%) and a respectable one on the Strip (7.49%). So it might be that mid-level demand is slowly reviving just as high-end demand is faltering.
The real surprise in my book is the Boulder Strip Cinderella story. With just about every Las Vegas economic indicator still falling or stuck in neutral and a population that's actually declined, you'd expect the locals Las Vegas market to be mired in a slump. But the exact opposite's happened: the Boulder Strip has posted six straight months of revenue gains. It's possible that Green Valley Ranch and the M Resort, which also draw on visitors, are buoying the rest of the reporting area, but it's also possible that visitors are trading down to other properties on the Boulder Strip. In any event, this has to be a positive for Station Casinos and, to a lesser extent, Boyd Gaming.
In September, will we find that high-limit gamblers have become inured to big-picture uncertainty and are back to their big-playing ways again? Will the locals rebound continue? Only time will tell. But it's clear that the broader economic indicators that show reason for pessimism in Las Vegas, while they may not tell the entire story, aren't totally wrong, either.