Nevada Casinos Flat in July while Macau Outperform Expectations

Home » Poker News » Nevada Casinos Flat in July while Macau Outperform Expectations

Monday, September 3rd, 2018 | Written by Shane Larson

In July, Macau’s casino market slightly disappointed analysts after generating $3.14 billion in revenue, or 10.3% more than during the same month in 2017. An increase of up to 13% had initially been forecast, but still growth was infinitely higher than Nevada’s casino industry which saw its revenue fall by 0.2% to $996.4 million over the same period.

Meanwhile, Macau has now released its latest results for August, and in a hugely positive development the Chinese resort’s gambling market beat analyst predictions for the first time in four months, with revenue increasing by 17.5% to $3.3 billion. Analysts had originally forecast a median expansion of 15% for last month based upon a growth range of between 12-18%.

Nevada Casinos Flat

Nevada’s casino industry reported a slight revenue decrease in July, marking just the second month business has declined this year, the other being in January when revenue dropped by 2.05%. Mostly accounting for the lackluster performance was a challenging year-on-year comparison versus the almost $1 billion that was taken in July 2017, as well as a reduced hold rate recorded at its gaming tables.

Slots Up, Table Games Down

The Silver State’s slots segment accounted for $667.9 million of the $996.4 million collected in July, or 5.6% more year-on-year. On the other hand, table games posted a 10.2% revenue contraction to $328.7 million, with roulette the only table game experiencing gains (+1.5%) last month after generating $32.8 million. Meanwhile, baccarat earnings dropped by 16.4% to $101 million year-on-year; blackjack was down by 6.6% to $93.4 million; and craps revenue slid by 13.3% to $35.1 million.

“Game and table win was the reason statewide win was off, which was due to baccarat and mini-baccarat recording lower volume amounts, but the decreases were primarily the result of lower hold,” explained Michael Lawton, senior research analyst for the administration division of the Control Board. “Due to slot collection timing, July benefited compared to last year; however, it wasn’t enough to make up for the lower hold percentages recorded by baccarat, min-baccarat, twenty-one, craps and roulette.”

Las Vegas Strip Woes

In July, the Las Vegas broke a five month winning streak after business fell by 5.75% to $533.1 million. Once again, slot machine revenue was in positive territory and improved by 3% to $227.5 million, but was ultimately unable to offset the Strip’s table games segment which posted a 13.7% revenue decline to $255.5 million.

Negatively impacting the numbers was a lower table game win percentage that contracted from 15.8% in July 2017 to just 13.6% this July. Once again bucking the trend was roulette (+1.5%), with all other table games seeing their revenues drop, including blackjack (-11%), craps (-18.4%), and baccarat (-18%).

On the plus side, Nevada’s other casino markets fared considerably better, with Boulder Strip revenue higher by 18%, North Las Vegas up 15%, Downtown Las Vegas improving by 8%, and South Lake Tahoe spiking by a massive 25.5%. While Reno, like The Strip, noted a slight 1.4% revenue decline in July, “The Biggest Little City in the World” these days derives an increasing share of its revenues from the major tech and startup firms that have chosen to set up in the region, including such companies as Google, Apple, Tesla, Panasonic and Switch.

Macau Revenues Soar by 17.5%

Nevada’s casino market may be struggling to remain above water, but on the other side of the globe the world’s biggest gambling hub, Macau, continues to impress by regularly reporting double digit growth each month. August was no exception, either, with the $3.3 billion it generated up by 17.5% year-on-year, and representing its second highest tally this year behind February. Furthermore, Macau has now extend its winning streak to 25 consecutive months.

Helping to explain some of the impressive growth is a favorable comparison to August of last year, a month in which parts of Asia were decimated by Typhoon Hato, in addition to an extra day in this year’s calendar. Nevertheless, the latest positive financials has led research and advisory firm Union Gaming to revise its third-quarter forecast upwards, although concerns still exist that China may seek to punish US casino companies operating in Macau over US President Donald Trump’s trade war, including the likes of Las Vegas Sands, MGM Resorts and Wynn Resorts.

According to Grant Govertsen from Union Gaming, the latest results are a “cause for optimism”, with Macau forecast to generate $3.03 billion in September, or 15% more than in the same month last year. GGR for Q3 is then expected to increase by 14% versus the previous 13% prediction, and commenting upon the market going forward, the analyst stated:

“.. we continue to believe that mass market remains the strongest segment, likely at or north of a 20% growth rate, with VIP remaining in the mid-teens. Based on recent conversations we’ve had with VIP junkets, we get the sense that business remains good and is maintaining a mid-teens trajectory despite fears to the contrary. To date, there has been no negative reaction (or even precautions) taken by VIP customers as it relates to trade wars and the potential impacts thereof. By and large, VIP and other premium customers have not changed trip frequency or their wallet size.”