Only five states reported less revenue in April 2018 than in April 2017; with that one fewer Saturday, the strength of most jurisdictions was significant. Although each jurisdiction has an individual narrative, there are some national trends that should be noted. One trend is that much of the increase is still coming from an increase in the number of casinos and VLTs.
New Jersey, the increase in online gaming revenue once again saved the month for Atlantic City. The casinos in Atlantic City generated $191.4 million in win, up 0.3 percent from 2017, but online gaming revenues grew 10.6 percent to $23 million. Borgata, Tropicana, and Ballys were down in April, a threatening trend considering there will be at least one more casino in Atlantic City beginning June 26
th and that the growth of online revenue has been slowing.
Pennsylvania is beginning to show signs of wear and tear. Table game revenue fell 6.2 percent to $74.6 million and slot revenue was up slightly, 2.3 percent, to $206.1 million. For most of the last twelve months, either table games or slots have been down while the other was up. In April, the calendar could easily account for the decline, but there is more to the story.
Part of the reason that the trend in Pennsylvania has not been good is New York. The Sands Bethlehem, the number two casino in Pennsylvania for gaming revenue, was down slightly in slot revenue in April, but down 19.76 percent in table game revenue. The property's management is blaming the new casinos in New York, saying table game players have found games closer to home. That factor is only going to get worse as the casinos in New York increase their marketing. However, the bigger threat coming down the line for existing Pennsylvania casinos is home-grown expansion. That hasn't happened yet, but it is coming.
New York now has four casinos, which reported $43.6 million in win in April. The newest casino, Resorts Catskills, did $10.8 million, a nice number for some casinos, but considering that Resorts cost over a billion dollars, it is clearly underperforming. The revenues from VLTs in New York grew by nearly 20 percent to $180.9 million, putting New York gaming on solid ground. But things may get shaken up soon. MGM has just purchased Empire City Casino in Yonkers for $850 million and will certainly put some effort into increasing its revenue; Yonkers is only 20 miles from New York City and that certainly justifies serious marketing. That is not good news for the other casinos in New York and terrible news for the Sands in Pennsylvania.
Maryland, MGM National Harbor is still driving revenue growth. In April, MGM had a 15.6 percent increase in revenues, to $57.7 million. A major competitor, Live!, was up 3.3 percent to $46.8 million. The Horseshoe Casino in Baltimore was the only casino in the state to report less revenue, down 11.5 percent to $21.7 million. With the exception of the Horseshoe, the Maryland landscape seems to be stabilizing as the other five casinos in the state absorb the impact of MGM National Harbor. The $1.4 billion National Harbor casino was a good investment for MGM, costing only slightly more than Resorts Catskills but generating five times the gaming revenue.
Detroit was an interesting case. The three casinos reported a 2.5 percent increase and if the theoretical decline of 4.5 percent is added to the equation, that increase looks really nice. A big factor was the closing, on April 6
th, of Caesars Windsor (in Canada), due to a labor strike. Although MGM Grand Detroit, Greektown, Motor City, and Caesars Windsor are not in the same jurisdiction, they are in the same market - just four miles separates Windsor from Detroit. It will not last forever, but Detroit finally caught a break after suffering for years from the increased competition in the neighboring state of Ohio.
Illinois continues to show revenue increases because of the increase of VLTs. The state's casinos are trending in the opposite direction. Casino win in the Land of Lincoln in April was down 5.3 percent to $115.2 million, with admissions falling 6.5 percent to 927,311. In 2012, the last year before VLTs, casinos win was $142.1 million and 1,345,746 customers went through the turnstiles. So customer count is down 31 percent in six years. The majority of those lost customers probably can be found gambling at one of 28,942 VLTs in the state - that number is up 10.2 percent from last year. The VLT win was $128.5 million, an increase of 16.3 percent. The viability of VLTs in Illinois is clear to the major gaming corporations, with Boyd Gaming recently spending $100 million to buy 1000 VLTs in 200 locations. . The only good news for the casinos in Illinois is that the state legislature failed to pass legislation that would have added either 10,000 or 12,000 additional slot/VLTs in the state.
Louisiana does not fit into either the expansion or increased competition model; weather and the oil economy are often primary factors in the Bayou state. In April, the issue was weather, I think. Whatever the cause, casinos in Louisiana did not have a good April, with revenue was down 8.1 percent. However, video poker was up slightly 4.1 percent to $51.1 million and racetrack slots were also up over 4 percent to $30.1 million. The other markets were down: Harrah's New Orleans fell 31.7 percent to $24.0 million, Baton Rouge casinos were down 12.1 percent, Lake Charles fell 1.8 percent, and Shreveport-Bossier City fell 5.5 percent to $54.2 percent. The casinos have recently got some good news: legislation passed (in May) that allows the casinos to move from their anchored riverboats into structures on land.
Mississippi also has its share of weather-related impacts, and competition has hit the river counties hard. Tunica is down approximately 50 percent since 2007. At the same time, the costal casinos are doing well, at least as long as there are no hurricanes. In April the Mississippi costal casinos were up 8.5 percent to $108.4 million and the river casinos were down 14 percent to $74.1 million.
Nevada gaming revenue was up 7.5 percent in April. That was a significant increase when the 4.59 perecent theoretical decline is taken into account. The Strip was up 5 percent to $499.5 million, which is great news given that baccarat was down 17.6 percent. Every jurisdiction and every game category was up: Downtown Las Vegas 15.6 percent, North Las Vegas 15.3 percent, Boulder Strip 22.7 percent, Carson Valley 7.1 percent, South Shore 12.6 percent, North Shore 1.2 percent, Washoe County 1.9 percent, and Churchill County casinos up 3.6 percent, to $1.78 million in April. Table games, slots, and sports win were all up.
Despite the overall good news, the slot result was a mixed blessing. Slot coin-in was up 2 percent, but win (for the house) was up 10 percent, which might not be an anomaly. According to a UNLV analysis, over the last 14 years the slot win percentage in Nevada has increased by 33 percent. The hold varies from jurisdiction to jurisdiction: for example, slot machines on the Strip are holding 8.3 percent in 2018, while in Reno that number is 5.25 percent. The Silver State built its casino industry on loose slots that attracted customers, so a dramatic move in the opposite direction is not necessary good news, even though it means an increase in earnings for the slot machine operators.
Four months into 2018, it is apparent that gaming is set to have a good year for all of 2018. There are more good things on the way, with Hard Rock Atlantic City and, perhaps, Ocean Resorts opening in June, and MGM Springfield planning on an August opening. But the really big news is going to be sports betting: Delaware, New Jersey, West Virginia, and Mississippi all plan on booking sports bets before the end of the summer. That's not only a source of new revenues; it's a way to attract more customers to casinos, to do other gaming.