Nevada iPoker Revenues Plunge 47% To New Lows In October

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Friday, November 28th, 2014 | Written by Stephen Smith

After hitting rock bottom in September, Nevada’s online gambling industry plumbed new depths in October after generating just $665,000 in revenues, the lowest amount on record this year and a full 47% less than the same month a year ago. Including revenues generated by land-based casinos, statewide earnings were down by almost 4.3% to $913.6 million, with $67 million in taxes subsequently collected by the state, a 9% improvement compared with October 2014.

Online Poker Market Cut In Half

Nevada’s online poker market has now suffered three consecutive months of falling revenues, with August’s tally down by 22.5%, September’s by 6.7%, and now October’s down by 47%. The $665,000 in revenues online operators generated last month was also significantly off the market peak reported in June of $1.037 million. That was when the 2014 WSOP was taking place in Las Vegas, and while back then Nevada’s online poker room’s could boast more than 200 cash game players at any one time, that figure is now closer to 140 cash players, according to tracking website PokerScout.

October’s result is also the last full month to include three online poker sites, as the state’s first regulated site Ultimate Poker has now shut down, leaving just WSOP.com, and Real Gaming operating. When Station Casinos launched Ultimate Poker back in April 2013, the company had high hopes it could benefit from being the first online operator in the state, but eventually it was overtaken by WSOP.com before folding its operation due to online poker revenues falling “far short of original projections.”

“Moreover, the state-by-state approach to online gaming has created an extremely cost-prohibitive and challenging operating environment. These factors have combined to make the path to profitability very difficult and uncertain. Consequently, we have decided to cease operations,” explained Ultimate Gaming Chairman Tom Breitling.

Real Gaming Launches “Ultimate Match” Promotion

In an attempt to attract refugees from Ultimate Poker to its site, Real Gaming is currently offering to match player balances from the now defunct site of up to $3,000. The promotion is scheduled to run until December 31st, 2015, and as South Point CEO Lawrence Vaughan said in a press release, recently:

“We welcome Ultimate Poker’s players and invite all to experience the latest gaming technologies and user-friendly mobile platform at Real Gaming that sets us apart from our competitors.”

Casino Revenues Down By 4.3%

Just like Nevada’s online poker market, the state’s overall gaming industry suffered a third straight month of declines with October’s tally of $913.6 million lower by 4.3% compared to $954.3 million generated in the same month last year. State gaming revenues are now down by 0.5% for the first 10 months of 2014, compared to the same period in 2013. On the Las Vegas Strip, which typically accounts for more than half the state’s gaming revenue, business was down by 5.6% to $520.3 million in October, and while slots were up by 7% to $260.6 million, baccarat revenues plunged by 35.5% to $97.3 million.

Despite the disappointing baccarat results, Macquarie Securities gaming analyst Chad Beynon saw plenty to be optimistic about in the latest figures, and commented that “these results were mildly positive to us given growth in mass tables and slot machines.”

In Clark County, which holds around three-quarters of Nevada’s residents, gaming revenue fell by 6.2% mostly due to the dramatic decline reported on the Boulder Strip (-24.2%) and North Las Vegas (-14.6%). Downtown Las Vegas, on the other hand, saw a 1.2% improvement in October to $48 million, while the balance of Clark County saw an increase of 2.4%.

In Washoe County, casino revenue were up by 7% in October, including Reno up by 7.9% to $47 million.

Baccarat 11% Of Nevada Gambling Revenues

Baccarat now accounts for around 11% of all gaming revenues in Nevada this year, and commenting on the importance of the game, analyst Steven Wieczynski from Stifel Nicolaus Capital Markets, said that baccarat “has generated average monthly revenue of $134 million over the trailing 12-month period.”

Needless to say, baccarat has become an integral part of the Las Vegas gaming economy over the past few years and playing around with October’s figures, without baccarat state gaming revenue would have been higher by 5.6%. However, UNLV’s Center for Gaming Research David Schwartz warned against cutting baccarat out of the equation, and said, “when it’s faithful to us, we count it.”