The Gaming Control Board released the November 2011 revenue results for Nevada casinos this morning. I've banged out two reports, and am now ready to pull everything together in a quick, easy-to-read narrative.
This appears, at first blush, to be a good month for Nevada casinos with no qualifications. There were, however, a few qualifications, though November was still a net positive for the state and the industry.
First, lets put November in context. The state's gaming industry has been on a bit of a roller coaster, with an apparent recovery trend through much of the first half of 2011 ended by two consecutive months of declines (August, September). Then came October, which had an 8.12% increase in year/year revenues. Some started to believe that the recovery was back on track.
November makes it more likely that the state can anticipate further (modest) growth in its gaming industry. For the month, the state had a 7.06% increase in gaming revenues. And nearly every major reporting area posted positive results. For the first time in as long as I can remember, all five of the reporting areas I look at for my monthly reports (Statewide, Las Vegas Strip, Downtown Las Vegas, Boulder Strip, Washoe County) reported gains. That in and of itself is good news.
The even better news for the longterm is that this wasn't another May or June, where fluctuations in baccarat hold powered huge revenue gains for the Strip that trickled down to the rest of the state, which was either stuck in neutral or headed in reverse. November saw moderate revenue increases nearly across the board, which says to me that, throughout the state, people are gambling more.
It's worth saying that both slot and table handle--the amount that's actually gambled--increased in most parts of Nevada along with revenue. That means that the revenue gains didn't just come as the result of tighter slot machines. People really gambled more than they did last year. That's another positive sign.
That's not to say it was all milk and cookies in November. The increases in handle were slight, meaning that the free-wheeling mid-00s aren't back. Also, November 2010 was a historically weak month for the state, and particularly for table games on the Strip. Some of the increase in November 2011 is simply a result of things returning to (relatively) normal.
Concerns about the Strip are balanced out by the fact that the Strip's casinos didn't have a spectacular month at the baccarat tables, with handle up from last year but nowhere near the highest it's been, and the Strip still performed well. That speaks to a moderate recovery at a variety of player levels, not just booming high-action play covering for weakness in the mass market. People never stopped gambling in Las Vegas, but it appears that they're doing a bit more of it than they had been.
The Boulder Strip is interesting. For most of 2011, it's led the rest of the state--even the Strip--in revenue increases. This is a real head-scratcher, since the local economy is still, in precise technical jargon, bumping along the bottom. Most of us who live in Las Vegas have seen our net worths reduced by the real estate collapse; construction jobs are still scarce; casino employment is also lagging. So why is gambling on the locals-heavy Boulder Strip on the rise?
I've got two theories: One is that locals, having lost so much, are figuring "the hell with it" and gambling more. Having walked away from underwater houses, does another couple hundred a month on video poker really make a difference? There's no evidence to back this theory up, though, and it doesn't answer the question of where people who've lost jobs would get the money to gamble.
The second is that those who were staying on the Strip earlier are trading down to the Boulder Strip properties. It's worth saying that some of the places included in that reporting area are really "locals-plus" casinos, marketing heavily to out-of-state overnight guests in addition to running promotions for locals. I'd really like to know how much of the Boulder Strip bump is from Green Valley Ranch and the M Resort, but that information isn't available to me.
Overall, it was a positive step forward for Nevada gaming. Depending on how December closes out the year, this could presage a much better 2012 for Nevada casinos.