Nevada iGaming Revenues Dive 22.5% In August

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Monday, September 29th, 2014 | Written by Adam Brown

The Nevada Gaming Control Board (GCB) has just released its latest gaming results for August revealing a dramatic 22.5% decrease in online poker revenues to $742,000, compared to July’s tally of $985,000. Overall, Nevada casinos generated $920.2 million last month, a 3.7% decline compared to August 2013, and ending five consecutive months of gains for the Silver State. Nevada subsequently received $50.7 million in taxes, 1.25% less than a year earlier.

Baccarat a game of big swings

Nevada‘s gaming market contracted by almost 4% in August with the Las Vegas Strip generating $553.2 million in revenues, 6.08% less than the same month last year, but still representing 60% of the state’s total gaming revenues.

Nevertheless, year-over-year comparisons were always going to be challenging as August 2013 saw gaming revenues increase statewide by 11.2% and by more than 20% on the Strip, assisted by a record-breaking baccarat win. This August, however, $24 million of the
$35 million drop statewide was caused by lower baccarat revenues, without which state revenues would have been just 1.4% lower and 2.3% lower on The Strip. Commenting on the figures, Stifel Nicolaus Capital Markets gaming analyst Steve Wieczynski, stated:

“We would caution investors from reading too much into the headline, as the figure was predominantly driven by a decline in baccarat hold.”

Despite the lower baccarat figures, the game will continue to be key in driving the Nevada gaming industry forward, and last year accounted for most of the state’s 5% increase in revenues. This August, an industry used to enjoying large baccarat gains got a taste of the downside of the volatile game, and as Michael Lawton, senior research analyst for the state gaming agency, explained:

“It’s a game that can have some big swings.”

August slightly disappointing

Casino revenues were slightly disappointing last month, especially with just three local markets, Mesquite, North Las Vegas and downtown Las Vegas, showing an increase in gaming revenues in August. However, Macquarie Securities gaming analyst Chad Beynon is predicting Strip revenues to rebound in September, while locals market are expected to benefit from new investment on the Strip in the near future.

One such investment was the opening of the The SLS Hotel & Casino Las Vegas on August 23rd following a $415 million renovation, with another being the proposed construction of the Resorts World Las Vegas by the Genting Group, which could cost up to $7 billion to complete.

“We think when major development projects really get into vertical construction and hire skilled laborers, this could get the ball rolling for top-line increases. In the interim, the promotional environment is stable and operators are looking to reprogram assets to be less-gaming dependent,” explained Union Gaming Group analyst Robert Shore.

Online poker takes a major hit

Most disappointing of all for Nevada was the huge 22.5% drop in online poker revenues the state experienced, which totaled $742,000 compared to July’s win of $985,000. Furthermore, iPoker revenues from Nevada’s three online poker sites were the lowest monthly figure so far this year, although industry experts had warned monthly results would fall following Nevada’s busy summer season which included the 45th World Series of Poker, and a successful collaboration between the tournament series and the WSOP.com website.

Compared to August 2013, however, when Nevada’s online poker industry collected just $677,000, August 2014’s iPoker revenues were 8.65% higher, and between September 2013 and August 2014 Nevada has now collected $11.075 million in online poker winnings.

WSOP celebrates year anniversary

Ultimate Poker may have been Nevada’s first regulated online poker site to launch in April 2013, but WSOP.com has since taken over the mantle of the state’s most popular site, and is currently showing 120 cash game players over a seven-day period according to PokerScout, compared to a mere 60 players for Ultimate.

The WSOP.com site launched its real money offering on September 19th and is now celebrating its year anniversary with a number of special deals and promotions, including the nine event Anniversary Tournament Series. In a departure from its previous stance on sponsored pros, WSOP.com also announced that 2012 WSOP Main Event champion Greg Merson had now been signed as its sponsored ambassador, with Bill Rini, WSOP.com’s Head of Online Poker, stating:

“Greg is a terrific ambassador for the game of poker. He loves the game, is passionate and opinionated about its future, and he will help us spread the word about our offerings and ensure the poker playing community has a respected, experienced voice to help shape WSOP.com moving forward.”