Come for the Neil Diamond reference, stay for the analysis of the gaming numbers! I've got plenty of the latter after the jump:
Superficially, it looks like the second straight month with a 6% or so decline statewide. Some people might be reaching for the panic button. But it's not time to hit that button just yet.
The reason why I'm not rending my clothes over what seems to be a starting negative trend is that the number I've said is the real one to watch--slot handle--actually increased. A year ago when we were in the first stages of the "baccarat recovery," I cautioned against getting too excited about monthly revenue increases when they were driven solely by more high-end play--which really benefits only a few casinos--and incremental gains in slot revenue eked out by higher hold percentages. The real sign of a larger recovery for the Nevada gaming economy has always been the slot handle. Last fall and winter, that continued to fall.
Since the summer, however, slot handle has been gaining, which I think is a sign that the overall demand for gambling in Nevada is growing, however slightly.
The reason that revenues aren't keeping pace with the growing handle is that, yet again, slot hold percentages fell. While one school of thought considers lower hold a negative (less potential revenue converted into win), I know I'm not alone in believing the opposite.
Here's why: lower hold percentage means, fundamentally, slot players won more. Let me repeat that: slot players won more. That's got to be good news for casinos, long-term. For all of the griping you hear about machines getting tighter (and, truth to be told, hold percentage has been steadily climbing for years, though that's chiefly due to migration to higher-hold low denom games), you haven't heard anyone saying that machines have been looser lately. Yet, if you look at the numbers, they have.
This is the opposite of what I call the Garrulous Jackpot effect. Whenever anyone hits a royal or lines up three sevens, you hear all about it because people like to share when they have something nice happen. Unless you're afraid that people will ask you to borrow money or pick up the check, in which case you put on your best (video) poker face and say, "Meh. I just about broke even." People rarely boast about their slot losses. So you get conditioned to assume that winning at slots is the norm since that what everyone talks about, and if you keep on playing you'll join that happy majority soon.
That digression aside...it was certainly an interesting month on the Strip. Slot revenues increased. Outside of baccarat, table revenues increased. But baccarat play--which has buoyed the Strip so much over the past year--fell by more than a third. With no aberrations in the hold percentage, that meant the VIPs just weren't playing like they were last year. I half-facetiously asked on Twitter whether Asian high rollers were saving up for Golden Week in Macau, which set the basis for a strong October there, and it's entirely possible that there's a link between the two numbers.
Elsewhere, Downtown declined, but not as badly as the Strip, with an increase in slot handle that bodes well for the future. The real story is on the Boulder Strip, where an unknown (to me at least--if you've got the inside story let me know) high roller absolutely killed it at blackjack, possibly winning a few million dollars and driving down the month's average blackjack hold to under 3%.
I wonder if he's talking about his big win with his blackjack buddies. If so, the Ebullient Blackjack Effect might be driving revenues next month.