If pressed for a prediction, I’d say 2011 will be a good year for the Strip, not so much for the rest of the Silver State. Just when I was feeling a bit queasy about November’s gaming revenues, Dr. David Schwartz took a gander at them that made me feel like Sunny Jim. Acknowledging two months of declining baccarat play, he writes, “that’s bad news, since general levels of play aren’t rising.”
An $822 million statewide gross — for a 6% decline — makes it the second-weakest month of 2010 and “the worst November since 2003.” Of all major jurisdictions, only North Las Vegas had a good month (greatly to the delight of Station Casinos, no doubt), up 3.5%, while Laughlin stayed flat. Slot win on the Strip (+10%) and the Boulder Strip (+0.5%) was largely manufactured through tighter holds and the increasingly prevalence of penny slots (which is tantamount to the same thing). Actual slot handle was down in both jurisdictions. Sports bettors came out ahead, with underachieving NFL teams costing sports books $2 million-plus. Downtown took another hit, off 8% from last year.
Heavy table play out on Boulder went for naught as locals casinos hit a terrible run of bad luck. There was a bit less play on most Strip tables (though it was a terrific month where craps was concerned) and the Boulevard’s lifeline — baccarat — saw $129 million less being wagered. Weakness in that game along was enough to move the Strip from revenue-positive to negative for the month. So Strip baccarat play wilts as it ascends in Macao — and while Steve Wynn‘s Vegas baccarat room is out of commission. Coincidence?
Schwartz’s critique of the waning fortunes of the greater Reno area (-21% in the city, -19% countywide), which I foolishly thought had struck bottom, are so dire I can’t bring myself to summarize them. Wall Street analysts were at pains to minimize the November figures, employing terms like “minor bumps” and predicting much better things from December’s data. Although 2010 has been by far the strongest year for baccarat drop in living memory, stock analysts say last November still suffered by comparison with an extraordinarily strong 11/09.
The gaming report coincided with the Las Vegas Convention & Visitors Authority‘s monthly tourism report. The two documents intersect to tell a familiar narrative: More visitors (+1%) spending less. More room nights (2%) were occupied, weekend occupancy was very modestly up, as were drive-in traffic in general (3%) and from California in particular (5.5%). Against this one must set another drop in fly-in visitors (-1%). Conventions were much fewer in attendance (-15%) and number (-17%), although MGM Resorts International expects to make up lost ground and then some next year. CEO Jim Murren also plays up continued strength in visitation and play from overseas, as opposed to obviously anemic domestic business. On a side note, it seems that Borgata sale to Leonard Green isn’t such a done deal and MGM is shopping its half of the property elsewhere. Innnnnnnteresting.
Growth isn’t paying for itself, not yet anyway. A 3% increase in room inventory is further diluting whatever strength the recovery possesses. Hotel occupancy is down 2% midweek and 1% overall, with lower-end lodgings faring worse in the year-over-year comparisons. John Q. Public‘s interest in Las Vegas may not have abated by he seems reluctant as heck to reopen his wallet here … certainly not when pensions and home values have gone down the privy.
Mr. Sunshine. Elsewhere, Sheldon Adelson puts the most positive spin he can on the likely loss of Sites 7 & 8 (left) in Macao. OK, so he’s pushing it just a teensy bit when he claims to be “happy — happier than if I were going build on it.” However, he acknowledges that Sands China‘s development timetable is too protracted, in the sense that the company would be perilously close to the expiration of its concessions in Macao by the time its full slate of properties would open, at their current pace. Adelson doesn’t think his casinos will be nationalized because Stanley Ho‘s would have to be confiscated, too. (Although, let’s face it, the ailing Ho’s chances of lasting that long don’t look at all good.)
Generally speaking, whether it involves caps on table games or guest workers, Adelson makes persuasive arguments that the glass is half-full. As for his evident resignation about Sites 7 & 8, if heavily leveraged Las Vegas Sands is to pursue potential new opportunities in Massachusetts and Florida, it may well have to pull some money off the table in Macao. Hard to quibble with that.
Man with a plan. When an ambitious, multi-pronged rescue scheme for Atlantic City was outlined by New Jersey Gov. Chris Christie (R), it seemed like a legislative long shot. Surely it would be watered down beyond recognition or hijacked by the horsey set, bent on clinging to the state’s dying parimutuel industry. Nothing of the sort. Execution of the Christie plan is close at hand and The Press of Atlantic City has a detailed rundown.
As though to rain on Christie’s parade, his bete noire — MTV‘s Jersey Shore — was featured on Today yesterday morning, as Matt Lauer interviewed Snooki with the deference normally accorded to a reigning pontiff. Gov. Christie’s chagrin at what the simian antics of she and “The Situation” are doing to the Garden State’s image is quite understandable. On the bright side, that Missing Link theory of human evolution has persuasive new evidence.