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February 2018
Let's Face It - February Was A Weak Month
Nationally, gaming revenue was up 2 percent to $3.361 billion in February. But this is the first month in recent history that new casinos and VLTs did not drive enough of an increase in revenue to push the national total up. If you back Nevada out of both 2017 and 2018 numbers, then the national total was down slightly, 0.22 percent, compared to 2017. (Nevada revenue accounts for nearly one third of the national total, so if Nevada has a good month, it drives the national figure up. It is rather like the situation in Nevada itself: if baccarat win is up, the Strip does well, and if the Las Vegas Strip is up, then the state is up.)
The calendar was not a factor in February, as both years had four Fridays, Saturdays, and Sundays. But for the first two months of 2018, weather was a major factor in the central and northeast regions of the U.S. The impact varied from state to state, but it was significant in some states in January and again in February.
There is one more factor to put on your watch list this year - the economy, which is becoming less stable than in 2017. Interest rates are going up, oil is over $60 a barrel, and the stock market is shaky. Walmart, my bellwether indicator, was down 15 percent in February after a year of steady price increases. Walmart started 2017at $66.66 and finished the year at $98.75, an increase 49 percent; that makes the recent decline in stock price an important sign of changing times. Still, in general, the economy is still growing, unemployment is extremely low and customer confidence surged in February to its highest level since November 2000. The overall picture may not look as bright as it did last year, but it is a long way from being dark.

February 2018 Casino and VLT Revenue:
Atlantic City gaming revenues fell 6.5% to $192.1 million. Gaming Commission, 3-18
Coloradocasino revenue fell 6.4% to $61.4 million. Gaming Commission, 3-18
Delaware VLT revenue fell 3.5% $27.1 million. Gaming Commission, 3-18
Detroit casino revenues fell 6.1% to $110.0 million. Gaming Commission, 3-18
Florida VLT fell 2% to $47.4 million. Gaming Commission, 3-18
Illinois casino/VLT revenues rose 6.5% to $220.0 million. Gaming Commission, 3-18
Indiana gaming revenue fell 8.7% to $161.7 million. Gaming Commission, 3-18
Iowacasino revenue fell 5.2% to $111.8 million. Gaming Commission, 3-18
Kansas gaming revenue rose 5.9% to $31.9 million. Gaming Commission, 3-18
Louisiana casino/VLT revenue rose 0.89% to $259.9 million. Gaming Commission, 3-18
Maine casino revenue rose 3.9% to $10.4 million. Gaming Commission, 3-187
Maryland gaming revenue rose 6.1% to $136.5 million. Gaming Commission, 3-18
Massachusetts gaming revenue rose 15% to $13.8 million. Gaming Commission, 3-18
Mississippigaming revenue fell 0.58% to $170.9 million. Gaming Commission, 3-18
Missouri gaming revenue fell 3.0% to $139.6 million. Gaming Commission, 3-18
Nevada gaming revenue rose 7.7% to $1.018 billion. Review-Journal, 3-28-18
New York casino/VLT revenue rose 8.2% to $199.9 million. Gaming Commission, 3-18
Ohio gaming revenue rose 1.09% to $147.1 million. Gaming Commission, 3-18
Pennsylvania gaming revenue rose 1.64% to $262.8 million. Gaming Commission, 3-18
South Dakota casino/VLT revenue fell 3.1% to $24.4 million. Gaming/lottery Commission, 3-18
Rhode Island VLT revenue fell 0.5% to $38.7 million. Gaming Commission, 3-18
Total Casino Revenue: National gaming revenue rose 2.05% to $3.361 billion. David Rohn, 4-18

The Other categories:
Macau gaming revenue rose 5.7% to $3.01 billion. Macau Business, 3-1-18
Connecticut Indian casino slot win rose 2.4% to $84.0 million. Gaming Commission, 3-18
Kentucky historical racing machine win rose 16.6% to $7.2 million. Gaming Commission, 3-18
Dow Jones Industrials fell 4.0% to close at 25,029.20. Yahoo, 2-28-18
Adams Index fell 6.4% to 526.68. CDC Newsroom, 2-18
Walmart fell 15.48% to close at 90.01. Yahoo, 2-28-18
"Weak Month" 

The chairman of New Jersey Casino Control Commission helped me with the title for this month's column. Not mincing his words, Jim Plousis said that February was a "weak month." In February, casino revenue in the state dropped 8.9 percent to $170.1 million. Not even surging online revenue - at $22.0 million, up 17.5 percent - could keep total from tanking. Plousis is hopeful about a turnaround, because this summer will bring Hard Rock and possibly Ocean City Casino to Atlantic City.
Maryland did not have an extra casino in February this year, compared to last, so the year-to-year comparisons give a better picture of the status of gaming in the state. MGM National Harbor was still the driving force as it goes into its second year, with revenues up 16 percent to $53.1 million. Live! Casino was also up 1.5% to $46.9 million. The Horseshoe continued its downward slide, which started when MGM opened in December 2016, down 2.7 percent in February to $21.4 million. And Ocean Downs was up 22.4 percent due to the addition in December of table games to a formerly all-slots operation. But its total revenue was only $4.9 million, not enough to really affect the state totals.
New York did have one more casino in February than it had last year, Resorts World Catskills, accounting for $9 million in revenues. Without it, the remaining casinos were down by over 20%. However, the VLTs in the state were up 5.9% to $161.4 million. The majority of the increase in New York is due to the newly opened Resorts, although it was only in operation for three weeks in February. That $9 million may have given a boost to the state total, but it casts some doubts about the justification for the $1.2 billion investment.
Ohio was one of those "weather-beaten states." Although total VLT and casino revenue was up, two weather-related closures had an impact. Jack's Cleveland casino closed due to flooding, and the win dropped 1.8 percent. The most significant drop due to weather was Belterra Park, a racino with 1,300 slot machines, which was forced to close for nine days, resulting in a 35 percent drop in revenue. The park is no stranger to Ohio floods - it survived the "Cincinnati Flood of 1937," but when it reopened in the summer it was poetically renamed River Downs. In 1997, River Downs fell victim to another flood and lost 18 days of operation. In 2013, Pinnacle renamed it Belterra Park, possibly hoping to escape its flood reputation; if so, that didn't work for more than a few years at best.
A clue to Indiana's February can be found in the headline of the Northwest Indiana Times issue of March 8 th: "February a bitter month for NWI casinos." The general manager of Majestic Star in Gary said that February was "all about the weather." Casino revenue in northwest Indiana was down 10 percent. More importantly, patron visits were down 16.2 percent. The Horseshoe in southern Indiana, located on the Ohio River, closed due to flooding; its revenues declined over 30 percent. The total gaming win for the state was only down 8.7 percent, which indicates weather was better in other parts of the state in February.
Illinois casinos did not have a good month in February. Casino win was down 7.1 percent to $104.4 million, due at least in part to weather-related declines. Patron visits declined by 13.8 percent, with many people certainly kept away by the weather. But regardless of how miserable the weather is in Illinois, the VLTs in the state are the root cause of declines in casino revenues. VLT revenue was up 14 percent to $115.6 million, with the number of units in place for the month at 28,565, an increase of 12.6 percent over last year. For the casinos in Illinois, some hope does exist: spring and warmer weather are coming and the growth in VLTs has slowed somewhat.
Mississippi's February was a typical Mississippi month: costal casinos were up 2 percent to $97 million, but the river casinos were down 5 percent to $73 million. Revenue has fallen at river casinos every year but one since peaking in 2006. The state's neighbor to the west, Louisiana was mostly up: VLTs win rose 1.8 percent, riverboats win rose 0.63 percent, and Harrah's New Orleans casino was up 4.4 percent; only the slots at the state's four racinos were down, 2.5 percent to $28.9 million. However, visitations to the racinos, riverboats, and New Orleans were down 50,761, an important negative trend.
South Dakota had mixed results, with casinos down 12%, but the VLTs were up 1.1 percent. Delaware revenue was down 3.5% and the number of VLTs was down 1.7% to 6,262; in ten years the win has fallen 45 percent and the number of units has dropped 20 percent, from 7920. In Kansas, the increase in gaming win was related to Kansas Crossing, the state's new casino. It generates less than $3 million a month, but that is still enough to move the needle in that state.
Kentucky is not on the main list, above, because its reporting as been irregular, but it still interesting. In February there was an increase 7.5 percent in the number of historical racing machines, to 1,834, and the handle grew 16.2% to $92.3 million. Kentucky is a long way from being a big player, but Churchill Downs has yet to weigh in; that is likely to change the landscape considerably.
And finally, Nevada, the Silver State, had a good month, driven by baccarat, which pushed the Strip totals up and thus the whole state of Nevada and even the nation. Michael Lawton of the Nevada Gaming Control Board is always good for a quote that sums things up nicely: "This month's increase was driven by baccarat win on the Strip, which was up $79.7 million or 82.5 percent. As expected, due to the shift in the calendar for Chinese New Year, this February was much stronger than last February due to Chinese New Year falling in January of last year." So much (at least for one month) for competition and bad weather.
For January and February combined, gaming revenues nationally were up 0.19 percent to $6.594 billion, not much of an increase. By comparison, after the first two months of last year, the total national gaming revenue was up 1.3 percent. The 2018 increase, however small, leaves plenty of room to hope - as the weather improves, revenue growth may also improve, it did in 2017. By the end of 2017, revenues were up 3.7 percent. Something similar could happen this year: Resorts World Catskills has just begun operations, one and maybe two casinos are scheduled to open in Atlantic City in the summer, and the long-awaited MGM Springfield in Massachusetts should be taking bets in the fourth quarter of the year. Those openings, plus more VLTs scattered around, can be expected to keep the industry growing throughout 2018.

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