August 2019

A New Normal Begins to Take Shape in June

The gaming industry is changing and some of new conditions were quite visible in June. Overall, it was a good month for gaming - revenues rose 5.37 percent to $3.761 billion. June caps off the first half off the year very well; for the first six months of 2019, combined VLT and casino revenues were $22.0156 billion, up 3.39 percent over the same period in 2018.
The June calendar was mixed. In 2019 it had one more Sunday, but also one less Friday than in 2018; the net result is a 0.5 percent advantage to this year, meaning if everything else was the same, 2019 should have 0.5 percent more revenue than 2018. That’s far less than the actual 5.37 percent.
The most significant factors in the growth in June came from the 21 percent increase in revenues for Atlantic City and the 11 percent increase for Nevada, since Nevada and New Jersey represent 35 percent of the total revenue in the country. Nevada’s increase was just the luck of the draw, because the baccarat win percentage was up dramatically. New Jersey is another story. It is growing from sports betting, online gambling, and two new casinos.
In short, online wagering, sports wagers, and new casinos are the conditions that are going to have significant impact on the industry over the next year, as they did in the month of June.
June 2019 Casino and VLT Revenue:
Atlantic City gaming revenue rose 21.5% to $283.8 million. Gaming Commission, 7-19
Colorado casino revenue rose 1.5% to $72.1 million. Gaming Commission, 7-19
Delaware gaming revenue rose 23.3% to $40.1 million. Gaming Commission, 7-19
Detroit casino revenue fell 1.4% to $117.5 million . Gaming Commission, 7-19
Florida VLT revenue fell 0.42% to $46.4 million. Gaming Commission, 7-19
Illinois casino revenue rose 3.3% to $246.1 million. Gaming Commission, 7-19
Indiana gaming revenue fell 2.1% to $223.1 million. Gaming/Racing Commission, 7-19
Iowa gaming revenue fell 1.3% to $120.5 million. Gaming Commission, 7-19
Kansas gaming revenue rose 3.6% to $33.8 million. Gaming Commission, 7-19
Kentucky historic racing machine win rose 135% to $18.1 million. Racing Commission, 7-19
Louisiana gaming revenue fell 7.1% to $253.9 million. Gaming Commission, 7-19
Maine gaming revenue fell 2.3% to $12.3 million. Gaming Commission, 7-19
Maryland gaming revenue fell 4.0% to $142.8 million. WBOC, 7-8-19
Massachusetts gaming revenue rose 238% to $50.1 million. Gaming Commission, 7-19
Mississippi gaming revenue rose 7.95% to $183.4 million. Gaming Commission, 7-19
Missouri gaming revenue fell 3.0% to $143.2 million. Gaming Commission, 7-19
Nevada gaming revenue rose 11.6% to $1.04 billion. Gaming Commission, 7-19
New York gaming revenue rose 4.9% to $226.6 million. Gaming Commission, 7-19
Ohio gaming revenue rose 4.5% to $161.4 million. Gaming/Lottery Commission, 7-19
Pennsylvania gaming revenue fell 0.44% to $271.0 million. Gaming Commission, 7-19
Rhode Island VLT revenue rose 8.5% to $46.9 million. Gaming Commission, 7-19
South Dakota gaming revenue rose 2.1% to $27.9 million. Gaming/Lottery Commission, 7-19
Total national gaming revenue for June rose 5.437% to $3.761 billion. David Rohn, 8-19
Total YTD national gaming revenue rose 3.39% to $22.156 billion. David Rohn, 8-19

The other categories:
Macau gaming revenue rose 5.9% to $2.95 billion. Reuters, 7-1-19
Connecticut slot win fell 8.1% to $82.2 million. New London Day, 7-15-19

Dow Jones Industrials rose 7.19% to 26, 599.96. Yahoo Finance, 6-28-19
Adams Gaming Index rose 8.3% to 589.97. CDC Gaming Reports, 6-30-19

Across the Country

Atlantic City now has nine casinos, but two operated only for the last few days in June 2018 - Hard Rock and Ocean Resorts both opened on June 27, 2018. For those four days in June 2018, Hard Rock reported $4.1 million in revenue and Ocean City reported $3.0 million. In June 2019, Hard Rock reported $30.1 million, plus $2.4 million from online play; Ocean City had $20.1 million in June 2019, plus $300k from the internet.
Three other casinos in Atlantic City reported an increase in revenue compared to June 2018. Borgata had $71.7 million in gaming revenue including the casino, online and sports win, an increase of 9 percent; the casino win portion ($64.8 million) was up 6.5 percent. Resorts win increased 27 percent to $25.0 million, with casino win down 0.49 percent but online revenue doubling to $6.9 percent. Golden Nugget win increased 2 percent to $29.4 million, with the casino win down 23 percent to $15.7 million, but online revenue up 62 percent to $13.5 million.
Overall, casino revenue in Atlantic City increased by 13.7 percent to $236.0 million; internet win grew by 67.8 percent to $38.1 million; and sports contributed $9.7 million. July 2019 will be the first true year-to-year comparison for all nine casinos. If the trend continues Hard Rock and Ocean City will take additional market share, but internet gambling is allowing the other casinos to make up for the lost revenue, and sports betting is adding some icing to the cake.
In Maryland , gaming revenue totaled $142.8 for June, a decrease of 4 percent, the second consecutive month of declines after four years of significant increases. MGM National Harbor reported $56.8 million in revenue, down 4.1 percent; Live! had a 1.7 increase to $48.9 million; Horse Baltimore’s win for June was $18.6 million, down 18.2 percent; Hollywood was down 3.9 percent to $6.3 million; Ocean Downs had $6.8 million, down 4.8 percent; and Rocky Gap was up 7.5 percent to $5.1 million.
New York had increases in both casino and VLT revenue. VLT win was $172.2 million, up 0.29 percent; there were 17,221 VLTs in New York in June, 5 percent fewer than in 2018, across 11 VLT operations. Resorts World New York City had a 32 percent share of the VLT win, with $55.8 million, down 1.9 percent. But Resorts had an additional $15.1 million from its off-track betting (OTB) facility in Nassau, whose win was up 30 percent from 2018. The two facilities gave Resorts a total of 41 percent of the state’s VLT win.
Revenue from the four casinos in New York was up 20 percent to $54.4 million. The largest increase came from Resorts World Catskills, which reported $20.3 million in win in June, up 53 percent from 2018.
Illinois has not changed its stripes; casino revenue was down again in June, this time 4.8 percent to $110.8 million, with admissions falling 8 percent to 861,866. In response to the decline in revenues, the casinos removed another 227 slots. VLTs in the state had an 11 percent increase in revenue to $135.3 million, with the number of units increasing by 9 percent to 32,033, and the number of locations growing by 7 percent to 6992. The number of locations is extremely important because the gaming expansion bill recently passed in Illinois allows each of those establishments to add one more VLT. Establishments can begin installing the additional unit as soon as local regulations are adjusted. By the end of the year there might be 40,000 VLTs in Illinois, which would be one VLT for every 32 residents.
Mississippi had an exceptionally good month, with revenues growing by nearly 8 percent. However, the regional details were not equal. The costal casino win jumped 13.3 percent to $109.4 million, the central region was up slightly to $23.9 million, and the northern region was down 1.2 percent to $48.4 million. Sports betting added $1.6 million to the state’s total, which was less than one percent of total revenues. But sports betting appears to be driving traffic to the casinos in Mississippi; the nearby states of Missouri and Louisiana both reported decreases.
Missouri was off by 3.0 percent, but admissions were down 7.7 percent to 3.0 million. Win at the five casinos in Kansas City fell 2.5 percent to $49.5 million, admissions were down 3.5 percent. The four casinos in St Louis were down 1.6 percent to $74.6 million, with admissions down 9.0 percent. The win for the five casinos that Missouri classifies as “Out State Markets” was down 15.4 percent to $19.3 million, with admissions down 18.5 percent.
Louisiana , where gaming revenues from casinos and racinos dropped significant, is equally challenged. VLTs did see an increase in win in June, up 1.2 percent to $49.8 million. But riverboat win fell by 10 percent to $151.7 million, Harrah’s New Orleans saw revenues fall 5.5 percent to $22.4 million, and slots at the racetracks fell 5.4 percent to $30.0 million. The most important metric showing a decrease was admissions. Total admissions were 2,438,126, down 16 percent from June 2018. The 7.0 percent revenue drop for Louisiana in June is important, but the larger percentage loss of customers is more significant. For the fiscal year (July 2018 through June 2019), riverboat admissions are off by more than 6 million, a drop of over 20 percent. Clearly Louisiana has some serious issues; not all the drop can be attributed to sports betting in Mississippi.
In Ohio , casino revenue from the state’s four casinos was up 4.7 percent to $70.2 million; table game win was up 10.1 percent to $21.7 million; and slots were up 2.5 percent to $48.5 million, even though the casinos took 1.4 percent of their slots off the floor, leaving 7219 units. Revenue from the VLTs from seven racinos was $91.1 million, up 4.3 percent from 2018. The racinos added 400 units, a 3.5 percent increase. Both the casinos and racinos are still adjusting to the realities of the market. For the fiscal year, VLT win from the racinos was up 6.9 percent to $1.0 billion, a record. The casinos are on a calendar year; for the first six months the win was $427.8 million, suggesting that the casinos are on track for a 2.1 percent increase for the year.
Pennsylvania is in flux: sports betting is ramping up, tables games are dropping, and slots are static. In June, the win for table games was $68.9 million, a 6.3% decrease; slot win was up 0.5 percent to $198.7 million; and poker fell 5.1 percent to $4.2 million. Sports win was $2.0 million, combining online wagers ($0.4 million) with bricks and mortar revenues ($1.6 million). Fantasy sports added another $1.5 million. For the fiscal year, gross gaming win from casinos, sports betting, and online fantasy sports contests totaled $3.3 billion, a 1.84 percent increase. Slots accounted for $2.37 billion of the total, table games $885.5 million, sports betting $21.7 million, and fantasy games $23.5 million.
Nevada win was up, totaling over a billion dollars for the first time in months. Slot win was up 7.3% to $636.5 million; tables were up 19 percent to $404.4 million; and baccarat was up 114.3 percent to $157.9 million, due to a 20.1 percent hold, twice last year’s hold percentage. Blackjack was down 10.1 percent to $89.9 million, craps was up 1 percent to $36.3 million, and roulette fell 10.2 percent to $32.9 million. Sports win dropped 18.1 percent to $18.9 million on a handle of $322.4 million.
By locale: the Las Vegas Strip was up 17.6 percent to $616.6 million; Downtown Las Vegas was up 18.5 million, to $52.1 million; Laughlin was up 8.4 percent to $39.4 million; and the Boulder Strip was up 9.4 percent to $66.6 million. In the North, the South Shore of Lake Tahoe reported $16.4 million in win, down 12.0 percent, and the North Shore fell 4.2 percent to $2.1 million; Reno fell 14.0 percent to $50.7 million; Sparks was up 0.17 percent to $11.2 million; and the Carson Valley and Carson City casinos were up 3.4 percent to $9.3 million. There were two notable factors in June in Nevada: baccarat produced a $158 million-win, 39 percent of the total table game revenue for the month; and with $322 million in wagering, Nevada sports books were king of the hill once again, beating out New Jersey, which was ahead in May.
While Nevada had the largest sports handle in June, that can be expected to change as online sports wagering heats up in New Jersey and Pennsylvania’s sports betting gets going. And sports is just one of the balls up in the air at the moment. Pennsylvania is in the beginning stages of its latest expansion and Illinois and Indiana are preparing to expand. In all three states, sports betting is going be an important part of the mix over the next year. The upcoming football season will give us a much better idea of how popular sports betting will be in those three states and New Jersey. And unlike Nevada, people will be betting online, making sports wagering a larger part of the gaming mix than in the Silver State.
In short: the two most important factors that will determine the new normal will be gambling on athletic competitions, online and at casinos, and, of course, the expansions in Pennsylvania, Illinois, and Indiana.  
This report is written by Ken Adams