Tuesday, August 12, 2008

Las Vegas Gaming Revenue Falls By About 1%, Atlantic City By 6.6%

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Nevada's casino gaming revenues fell by 1.1 percent in June while gaming revenues at casinos on the Las Vegas Strip, which accounts for about half of the state's total gaming revenues, declined by 3 percent.

KeyBanc Capital Markets analyst Dennis Forst told AP that most other states reported June data a month ago with average results down 1.8 percent. "July is expected to be a more difficult month. Not only do Las Vegas Strip casino operators face tough comparisons to last year, when "gambling win" jumped 14 percent, but July 2007 had one more weekend day. Also, fuel prices remained high this July, which further drove down consumer confidence."

Nevada gaming revenue is down about 2 percent for the year, while the Las Vegas Strip is down 1.5 percent for the year.

J.P. Morgan analyst Joe Greff said that "the month of June was actually worse than it appears since casinos in June benefited from a quirk in the reporting method that included slot-machine win from May 30 and 31 -- both weekend days. As such, we believe the slot win and slot hold percentage was artificially high this month. After adjusting for this issue results on the Strip were down 5.1% year over year."

Steve Kent of Goldman Sachs said "the pain could be around for a while".

Atlantic City casinos reported a 6.6 percent decrease in July gaming revenue compared to the same period last year. Only two of the 11 casinos in Atlantic City reported increases in their July gaming revenue - Harrah's (19.7% increase) and the Borgata (1.9% increase)

Bill LaPenta, director of financial analysis for Spectrum Gaming Group, said, "July is one of the two big months for Atlantic City, of course. The 6.6 percent decline is about on pace with the year-to-date decline. The decline might have been less were it not for the decline in table games, which contributed more than usual for the month."

Visitors to New Jersey's beaches may be getting upset, according to Bloomberg News. "New Jersey's 127-mile coast on the Atlantic Ocean has 43 communities with public beaches, and all but five charge swimmers, sunbathers and picnickers for entry. Ten of them increased fees this year, by an average of almost 20 percent, according to a report from the Public Advocate's office. Admission is as much as $12 a day."

July slot machine revenue was down 7.2 percent while table game revenue declined 5.1 percent, according to the state's gaming commission.

Mohegan Sun and Foxwoods are expected to report on their July slot machine revenues later this week.