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Holy cow, Nevada’s gaming win in January was up 18.4 percent over the same month a year ago! Bust out some champagne! Let’s throw a party! We’re back!
Not.
The fact that gaming win hit the $1 billion mark for the first time since September 2008 was great news for Nevada, but the reality is that there’s no indication from January numbers that a trend is under way.
We can thank the calendar for the double-digit percentage increase. In 2012, Chinese New Year fell in January. In 2011, it fell in February. That alone meant January 2012 would look stellar against the previous year.
“It was a function of baccarat strength and Chinese New Year,” said Bill Lerner, an analyst with Las Vegas-based Union Gaming Group. “It was definitely a calendar benefit since Chinese New Year was in February last year.”
Asian high-rollers have a propensity to play baccarat, a volatile game in which a player can win — or lose — hundreds of thousands of dollars in 10 minutes.
In January, the state reported baccarat win was up 199 percent on the Strip over last year. Pai gow, another game favored by Asians, was up 372 percent over January 2011. And mini-baccarat win beat the previous year by 77.7 percent.
Well-to-do Chinese visitors travel during the holidays, whether it falls in January or February. So it isn’t too surprising that the gaming win percentage increase led newscasts and resulted in banner headlines.
While hitting the $1 billion plateau was the big story, there were a few other tasty nuggets when you drill down into the state Gaming Control Board’s statistical analysis of the January numbers.
For instance, if you focus just on slot win, the least volatile of the gaming revenue numbers, the state showed a modest increase of 2.7 percent for the month.
Lerner said if you focus on the steady increase of visitor volume, occupancy rates, average daily room rate in addition to slot win, it paints a picture of a steadily improving tourism economy.
But hold the phone. Slot revenue improved statewide but was flat on the Strip, with a decline of 0.44 percent.
“I think the billion-dollar win is a big deal,” said David Schwartz, the director of the Center for Gaming Research at UNLV. “But I have a contrarian view from most that because slot revenue declined on the Strip, it’s not a good sign for a real, sustained recovery.”
Analysts should get a better indication of just how significant the Chinese New Year baccarat bump was when the February numbers come in — but maybe not.
February will have what analysts call a “tough comparison” to last year for two reasons. For one, Chinese New Year fell in February 2011, which would lead most to believe revenue would be down this year compared with last. But a second tough comparison is that February 2012 has an additional day, courtesy of Leap Year.
Michael Lawton, the Gaming Control Board’s senior research analyst, has reviewed years in which Chinese New Year fell in February one year and January the next. The last two times when that occurred, in 2006 and 2009, the February win was stronger than anticipated.
“I’m not promising anything on this for 2012, but it has happened,” Lawton said.
Other circumstances have skewed the monthly numbers in the past.
Whenever a month ends on a Friday, Saturday or Sunday, slot revenue collected on those days are pushed into the next month. That’s because the state and floor operators don’t want to disrupt the casino on weekends when they’re busiest.
In fact, revenue collections aren’t ever scheduled at the end of December because of the New Year’s holiday, so revenue in machines during the holiday is pushed into January, which almost always results in robust Januarys and so-so Decembers.
Lawton said one of the best ways to gauge sustained casino revenue trends was to monitor three-month and 12-month revenue comparisons to smooth out the collection cycles.
Keeping in mind that the November-to-January cycle still misses the Chinese New Year comparison, gaming win is up 9.3 percent over the same period a year earlier. In a 12-month comparison against the previous year, gaming win is up 4.4 percent.
Although that growth should make Nevadans happy, it isn’t quite as dramatic as double- and triple-digit percentage increases.