Nevada casino revenues rose 5.7 percent in May, propelled by a strong 11.9 percent gain on the Las Vegas Strip that pushed year-to-date revenues out of the red and into the net positive column, according to figures released on Tuesday.
But analysts stopped short of saying the strong increase marks a turnaround for the state’s gaming market, where growth has slowed amid the economic slowdown.
Nevada casinos posted a gaming “win” — money left after all bets were paid — of $844 million in May, according to the Nevada Gaming Commission.
That figure brought total casino revenues for the first five months of the year to $4.07 billion, up 0.8 percent compared with the same month last year. At the end of April, statewide gaming revenues had been down 0.4 percent for the year to date.
Of the state’s May revenues, Las Vegas Strip casinos accounted for $385 million, or nearly half of the total.
Lehman Bros. analyst Joyce Minor said the May increase on the Strip was not unexpected because several calendar factors worked in the market’s favor. But she said the magnitude of the gain — the largest percentage gain since July 2000 — came as a pleasant surprise.
“We have heard that both convention and tour travel demand was very solid in May,” she wrote in a research note. More about Situs Slot Deposit Pulsa Tanpa Potongan
But Minor added that the situation could still turn around in the months ahead. “We expect June results to still be decent,” she wrote. “August becomes a tougher comparison with (last year’s) 15.2 percent gaming growth on the Las Vegas Strip.”
Outside the Strip, the only other major market posting a strong year-on-year gain in May was the Boulder Strip where revenues rose 13.1 percent to $57.8 million.
Revenues continued to slide in northern Nevada, where the gaming win was down 3 percent to $97.8 million in the Washoe County market that includes Reno and Lake Tahoe. Washoe County gaming revenues have now dropped in four of the first five months of 2001, with some analysts attributing the attrition to growing competition from Native American casinos.
Revenues also dropped a hefty 26.7 percent to $16 million in North Las Vegas, possibly reflecting growing competition for casinos in the area owned by Station Casinos Inc. (NYSE:STN – news), said UBS Warburg analyst Robin Farley.
“The decline…indicates that Station Casino’s North Las Vegas properties…are probably still being hurt by new competition from the $175 million Suncoast which opened in September 2000,” she wrote in a research note.
As a result of the competition, Farley said she expects Station’s North Las Vegas properties to suffer year-on-year declines in revenues and operating income until the fourth quarter when Suncoast will mark its first anniversary.