January 2019
It Was a Very Good Month; It Was a Very Good Year

The eighteenth year of the 21st century was a very good year for new casinos in New York, Massachusetts, and New Jersey. It was a very good year for sports betting in Delaware, New Jersey, Mississippi, West Virginia, and Nevada. Consequently, 2018 was a very good year for the gaming industry in the U.S. It was also pretty good year for the economy, with unemployment at all time lows, hovering around 4 percent, and wages that kept pace with job growth. Retail shopping was strong, up 5.1 percent for the year, after a record-breaking Christmas shopping season.
But it was not such a good year for the stock market. Gaming stocks in particular struggled in 2018, with some down as much as 30 percent; overall, 2018 was the worst year for gaming stocks since the Great Recession. However, it is becoming the common wisdom to separate the stock market from the economy, rather than treat the market as an economic-bellwether, as was the case in previous eras.

In 2018, gaming revenue totaled $42.692 billion, an increase of 3.96% over 2017. As for December 2018, its unfavorable calendar, with one less Friday, meant a theoretical negative 1.11 percent compared to a year earlier. But the missing Friday was not evident in the numbers: for the month, gaming revenue was up by 7.55 percent to $3.763 billion. December revenue was driven, has it has been all year, by new casinos, more VLTs, and, in the last half of the year, by sports betting. It is worth noting that only Louisiana and Connecticut reported revenue declines in December; all of the other 22 jurisdictions had more revenue in December 2018 than 2017. Champagne, anyone?

December 2018 Casino and VLT Revenue:
Atlantic City gaming revenue rose 25.1% to $258.9 million. Gaming Commission, 1-19
Colorado casino revenue rose 3.8% to $70.7 million.  Gaming Commission, 1-19
Delaware VLT revenue rose 6.1% to $32.6 million. Gaming Commission, 1-19
Detroit casino revenue rose 10% to $127.4 million. Gaming Commission, 1-19
Florida VLT revenue rose 1.8% to $48.4 million. Gaming Commission, 1-19
Illinois revenue rose 8.2% to $251.2 million. Gaming Commission, 1-19
Indiana gaming revenue rose 3.7% to $191.4 million.  Gaming Commission, 1-19
Iowa casino revenue rose 3.1% to $126.0 million.  Gaming Commission, 1-19
Kansas gaming revenue rose 1.1% to $36.1 million. Gaming Commission, 1-19
Kentucky racing machine revenue rose 104% to $14.0 million.  Racing Commission, 1-19
Louisiana gaming revenue fell 1.2% to $273.0 million. Gaming Commission, 1-19
Maine casino revenue rose 15.7% to $11.0 million. Gaming Commission, 1-19
Maryland gaming revenue rose 5.2% to $148.3 million. Gaming Commission, 1-19
Massachusetts gaming revenue rose 180% to $35.6 million.  Gaming Commission, 1-19
Mississippi gaming revenue rose 7.3% to $190.4 million.  Gaming Commission, 1-19
Missouri gaming revenue rose 3% to $152.1 million.  Gaming Commission, 1-19
Nevada gaming revenue rose 4.1% to $999.6 million.  Gaming Commission, 1-19
New York gaming revenue rose 13.5 % to $219.7 million. Gaming Commission, 1-19
Ohio gaming revenue rose 10.9% to $165.8 million. Gaming Commission, 1-19
Pennsylvania gaming revenue rose 5.2% to $277.3 million.  Gaming Commission, 1-19
Rhode Island gaming revenue rose 23.7% to $59.9 million. Gaming Commission, 1-19
South Dakota gaming revenue rose 5.0% to $27.0 million. Gaming/Lottery Commission, 1-19
West Virginia gaming revenue rose 10% to $46.7 million.  Charleston Gazette-Mail, 1-23-19
Total gaming revenue for December rose 7.55% to $3.763 billion. David Rohn, 2-19
Total gaming revenue for 2018 rose 3.96% to $42.692 billion. David Rohn, 2-19

The Other categories:
Connecticut slot win fell 2.6% to $86.7 million.  Hartford Courant, 1-15-19
Macau gaming revenue rose 16.6% to $3.3 billion.  Macau Business, 1-1-19
Dow Jones fell 8.6% to 23,331.12. Yahoo Finance, 12-30-18
Adams Index fell 29.4% to 350.99. CDC Newsroom, 12-31-18

Across the Country...

Atlantic City had another monster month in December, with total revenue up 25.1 percent. Casino revenue was up 12.3 percent to $209.1 million, internet gaming win was up 39.7 percent to $29.0 million, and sports betting added another $20.8 million. Two casinos opened in 2018: Hard Rock contributed $23.6 million to the casino win in December and Ocean Resorts added $11.9 million. The other seven casinos were down 6.8 percent to $173.5 million; only Resorts reported an increase in win, up 2.3 percent to $14.2 million. Borgata was down 0.6 percent to $57.4 million, but it still accounted for 27 percent of the total.

Also in New Jersey, Meadowlands and Monmouth Park racetracks generated $11.4 million of their win from sports. For all of 2018, gaming revenue in the state was up 9.2 percent to $2.9 billion, casino revenue was up 4.0 percent to $2.5 billion, and online revenue was $98.7 million, an increase of 21.6 percent. Sport betting revenue from June to December was $94.0 million and the handle was $1.24 billion. It is unclear what impact the Department of Justice’s opinion that online gaming violates the Wire Act will have on Atlantic City; what is clear is that online gaming has become a very important part of the revenue mix for the city’s casinos.
In Maryland , revenue growth slowed somewhat, clocking in at 5.2 percent for December. Total casino revenue in Maryland for 2018 was $1.746 billion, up 8.17 percent. MGM National Harbor was the story for December and for the full year; its December gaming win was $59.9 million, up 5.9 percent. Other casinos were also up: Live,6.1 percent, to $50.0 million; Hollywood Perryville, 9.2 percent; Ocean Downs, 45.2 percent; and Rocky Gap, 17.0 percent. The perpetual loser, Horseshoe Baltimore, fell 7.2 percent to $22.2 million. It will be interesting to see how the restructured, post-bankruptcy Caesars will treat the Horseshoe going forward, since that casino will certainly continue to report revenue declines as it loses market share to MGM and Live.
MGM recently purchased the Yonkers Raceway for $850 million, adding another major regional property to its portfolio. That means MGM, which now operates the dominant casinos in Atlantic City, Maryland, and Massachusetts, will be adding New York to that list. Of the MGM properties, Springfield generates the least revenue, and next year it will get more competition as the Wynn Resorts property near Boston is scheduled to open in June. MGM is trying to hedge its Massachusetts bet with a new casino in Connecticut, but nothing significant has happened to date.
For the year, New York ’s combined gaming revenue rose 11.36 percent to $2.585 billion. In December, the casinos had an increase in win of $12.4 million, 37 percent more than in 2017. There were four casinos in New York in December of 2018 and only three the previous year, with the new casino, Resort Catskills, reporting $12.4 million for December. The del Lago reported $12.9 million, up 16 percent; Rivers Schenectady had $13.4 million, up 17.5 percent; and Tioga Downs reported a casino win of $6.4 million, down 38.4 percent.

For December, the VLTs in New York reported $174.6 million in revenue, up 14.1 percent. The major VLT operator in the state is Resorts World New York City with 5,556 slot machines. Resorts had an average $336 win per machine per day; its total in December was $57.8 million, up 3 percent from 2017. Resorts also has the Nassau OTB at the same location with another 500 slot machines; that produced $14.9 million in win. So Resorts accounted for 41.6 percent of all the VLT revenue in New York, with only 30 percent of the machines. Second on the VLT list is the soon-to-be MGM Empire City at Yonkers Raceway. It has 5,222 VLTs and had a win of $52.0 million in December, an increase of 8.7 percent from 2017. Genting generated $85.1 million in gaming revenue in the state from Resorts Catskills, Resorts New York City, and Nassau OTB.
Massachusetts had a whopping 180 percent increase in December, something easy to explain: MGM Springfield opened in August. In December, MGM reported $35.6 million in win, with the other casino in the state, Plainridge Park, with revenues of $14.0 million, an increase of 10.2 percent from 2017. Massachusetts gaming revenue for all of 2018 was $271.8 million, an increase of 65.5 percent, thanks of course to MGM Springfield.
Illinois gaming revenue was up 8.2 percent. For the last four years, the revenue increase in the Land of Lincoln has been due to the VLTs. That was true again in December. There were 30,694 VLTs in Illinois in December, up 8.5 percent from 2017; the VLT win was $133.5 million, an increase of 15.5 percent. In contrast, Illinois casino win grew by only 0.85 percent, to $117.6 million; admissions increased 2.6 percent to 936,086.

For all of 2018, the casinos and VLTs in Illinois generated $2.876 billion, up 6.4 percent from 2017. But casino revenue fell 2.3 percent to $1.374 billion, with admissions dropping 6.7 percent to 10,913,072, while for VLTs, revenue grew 15.1 percent to 1.499 billion. The only thing that could change the narrative in Illinois would be more gaming options. The legislature will most likely consider additional casinos, including one in Chicago, and slot machines for race tracks.

Mississippi had a good December, aided at least partially by the New Orleans Saints and sports betting. The Saints were in the hunt for the Super Bowl and the team’s fans enjoyed their first opportunity to legally bet on the home team at home. Local media thought that excited fans also visited casinos more often because of the Saints.

For the year, Mississippi casino win was up 2 percent to $1.240 billion; coastal and lower river casinos were up and Tunica was down. The coastal casinos had the best December in 26 years, with $106.4 million in gaming revenue. By contrast, Tunica was down 1 percent and the lower river casinos were up 1 percent. Tunica was once third on the national gaming revenue list, behind Las Vegas and Atlantic City, but it has fallen a long way since then. With more competition coming, it is going to be even more challenging for Tunica. In the short-term, the coastal casinos will benefit from sports betting, but if neighboring Louisiana legalizes sports and their casinos begin to move onto to land, Biloxi will also face some challenges.

Louisiana has issues of its own. The smoking ban in Baton Rouge has pulled revenue down, the sports betting in Mississippi has probably taken some of the state’s business, and the state’s casinos are still sitting on boats while the casinos in Mississippi are adapting to land.

In December, Louisiana’s riverboat revenue was down 5.1 percent to $163.2 million. In Shreveport/Bossier the win fell by 1.8 percent, Lake Charles casinos were down 8.1 percent, and Baton Rouge was off 15.5 percent. The Belle of Baton Rouge dropped 38.8 percent, fueling rumors that it might close. The land-based casino in New Orleans, Harrah’s, was up 7.7 percent; VLTs recorded an increase of 7.3 percent to $52.0 million; and the slots at the track were up 2.7 percent to $30.5 million. Total admissions for the riverboats, Harrah’s and the track were 2,453,674, down 2.49 percent from December 2017.

Total gaming revenue in Louisiana in 2018 was up only 0.42 percent, to $3.154 billion. In 2019, Louisiana will probably approve sports betting, and some of the casinos may begin to migrate onto land. Without those changes, 2019 will see even more struggles for the state’s casinos.

In the Midwest, Missouri gaming revenue increased by 3 percent to $152.1 million in December. But admissions were off 1 percent, falling to 3,367,282. For all of 2018, Missouri revenue increased 0.9 percent, to $1.753 billion. In South Dakota in December, both VLTs and casinos recorded increases, with casino win up 6.9 percent to $7.7 million, and VLT win up 4.3 percent to $19.3 million. For 2018, the state’s total was $306.6 million, up 2.94 percent.

In Ohio , both the casinos and racinos were up in December, with the state’s four casinos reporting an increase of 8.1 percent to $76.2 million and the seven racinos having a win of $89.6 million, up 12.8 percent. The casinos reduced their slot machines by nearly 200 and the racinos increased theirs by 145; the win per day per machine went from $228 in December 2017 to $254 in December 2018. For the entire year, Ohio casinos and racinos generated $1.862 billion, up 4.86 percent.

In Rhode Island , the two casinos had a good December: Twin River recorded $37.1 million, up 13.8 percent; Tiverton, nee Newport Grand, had $7.5 million, an increase of 114 percent, making its departure from Newport look better every month. For the year, casino revenue in Rhode Island increased 3.5 percent.

Nevada had a good December, although it fell short of the magical billion-dollar mark, coming in at $999.6 million. Slots were up 10 percent to $635 million, and sport betting revenue increased 27.7 percent to $44.1 million, but table game win dropped 4.4 percent to $363.8 million due to baccarat, down 14.6 percent; blackjack, off 10.9 percent; and roulette, down 9.2 percent. The pace-setting Las Vegas Strip was down 0.9 percent to $566.2 million as a result of the table game results.

Downtown Las Vegas was up 26.5 percent to $59.1 million, Boulder Strip recorded an increase to $68.0 million, and Laughlin was up 4.5 percent to $32.6 million. In the north, Reno was down 2.6 percent to $53.9 million; Washoe County reported $73.4 million in win, down 1.4 percent; Carson Valley increased 1.5 percent to $9.5 million, South Lake Tahoe casinos reported a 9.1 percent decrease to $16.8 million; and on the North Shore of Lake Tahoe, revenue gaming win was up 2.6 percent to $2.3 million. Elko County had $24.6 million, up 1.2 percent; and Lyon County casinos were up 4.5 percent to $13.7 million.

For the year, Nevada gaming revenue increased 3 percent to $11.9 billion. Only 2006 and 2007 registered larger gaming wins, at $12.6 billion and $12.8 billion respectively. 2018 was not a record year overall, but sports betting did set a record with $5 billion in handle and a win of $301 million.

The trends that influenced gaming revenue in 2018 are likely to continue in 2019. The new casinos in Massachusetts, Maryland, New York, and New Jersey will be important factors in the coming year; although the degree of their impact will lessen. Except for the Wynn property, no other major casino is expected to open in 2019. Arkansas and Pennsylvania should have at least one casino under construction by the end of the year; and it is possible that a casino or two may begin the process of moving onto land in Louisiana during the year. Georgia, Alabama, Texas, Indiana, Virginia, and Illinois will debate the possibility of authorizing additional casinos in 2019.

In 2019, the expansion which will garner the most headlines will be a repeat of 2018 - sports betting; analysts are predicting as many as a dozen more states will authorize sports betting in 2019. Unlike casinos, once sports gambling is authorized in a state, the process of promulgating regulations and opening facilities can be very fast. So, as it stands today, 2019 promises to be every bit as exciting for the gaming industry as was 2018.

This report is written by Ken Adams