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January 2018
What a Difference a Blizzard Makes
The first month in 2018 did not start well for the U.S. gaming industry - gaming revenues in January were $3.233 billion, a decline of 1.68 percent compared to a year earlier. The calendar can account for only 0.73 percent of the decline, with one more Sunday in January 2017 than in 2018.

Weather is always a factor in January, and this year it did have an impact in many jurisdictions. On the opposite side of scale, there were more casinos and VLTs in New York and Kansas and Illinois in 2018, pushing revenues up in those states. And since the broader economic indicators were positive, that should not have had any negative impact on gaming revenues.

January 2018 Casino and VLT Revenue:
Atlantic City gaming revenues fell 9.9% to $184.3 million. Gaming Commission, 1-18
Colorado casino revenue rose 5.7% to $64.0 million. Gaming Commission, 2-18
Delaware VLT revenue fell 29.7% to $23.4 million. Gaming Commission, 2-18
Detroit casino revenues fell 0.53% to $111.4 million. Gaming Commission, 1-18
Florida VLT fell 11.6% to $41.7 million. Gaming Commission, 2-18
Illinois revenues rose 4.2% to $214.7 million. Gaming Commission, 2-18
Indiana gaming revenue fell 1.6% to $162.2 million. Gaming Commission, 1-18
Iowa casino revenue fell 0.36% to $109.9 million. Gaming Commission, 2-18
Kansas gaming revenue rose 2.9% to $31.1 million. Gaming Commission, 2-18
Louisiana gaming revenue fell 3.8% to $230.9 million. Gaming Commission, 2-18
Maine casino revenue fell 2.0% to $9.7 million. Gaming Commission, 2-18
Maryland gaming revenue rose 1.2% to $127.7 million. Gaming Commission, 1-18
Massachusetts gaming revenue rose 2.4% to $12.4 million. Gaming Commission, 2-18
Mississippi gaming revenues fell 9% to $151.3 million. Gaming Commission, 2-18
Missouri gaming revenue fell 1.0% to $130.8 million. Gaming Commission, 2-18
Nevada gaming revenue fell 2.05% to $1.01 billion. Gaming Commission, 2-18
New York gaming revenue rose 17.4% to $185.5 million. Gaming Commission, 2-18
Ohio gaming revenue rose 0.81% to $136.1 million. Gaming Commission, 1-18
Pennsylvania gaming revenue fell 1.6% to $248.8 million. Gaming Commission, 1-18
Rhode Island VLT revenue fell 35.8% to $21.8 million. Gaming Commission, 2-18
South Dakota gaming revenue rose 6.3% to $25.3 million. Gaming/Lottery Commission, 2-18
Total gaming revenue for January fell 1.68% to $3.233 billion. David Rohn, 2-18

The Other categories:
Connecticut slot win fell 4.1% to $78.8 million. New London Day, 2-15-18
Macau gaming revenue rose 36.4% to $3.3 billion. Reuters, 2-1-18
Walmart rose 8.1% to 106.60. Yahoo, 1-31-18
Dow Jones rose 5.4% in January to close at 26,076.89. Yahoo, 1-30-18
Adams Index rose 4.3% in January to close at 553.01. CDC Reports, 1-31-18
The Cold Facts 

There are some changes in the Adams Index for 2018. The index has been updated; it now includes Boyd, Las Vegas Sands, MGM, Penn National, Wynn, Pinnacle, Eldorado, IGT Scientific Gaming, Monarch and Caesars Entertainment. When the merger of Penn and Pinnacle is final, the index will change again. Monarch was added to list for 2018 and Walmart was taken off of it. In the past, I used Walmart as a bellwether stock, but decided it should not be in the index because it distorted the overall average. Walmart is now is listed separately as a retail bellwether, which should help to complete the economic stock market picture as shown by the Dow Jones Industrial Average and the Adams Index. The stock market is not considered to be a direct reflection of the economy any longer, but it does add to our ability to analyze the economy and its impact on the gaming industry.
Atlantic City experienced nearly a 10 percent decline in revenue in January. Casino revenue fell 12.6% to $162.4 million, but in keeping with the trend, internet gaming revenue was up 16.7% to $18.8 million. The Casino Control Commission had a ready explanation for the drop in casino revenue - the weather. "What a difference a blizzard makes," Jim Plousis Chairman of the CCC said. "When people are stuck in their homes by more than a foot of snow, and temperatures are dipping into single digits, they don't come to Atlantic City." People (in New Jersey) can avoid bad weather by staying home and playing casino games online, for money. And that continues to be the major narrative in Atlantic City: it is the gamblers that stay at home that are pushing revenues up, while the number of gamblers that go to the Boardwalk dwindles.
Maryland had its first full month of an equal comparison, with January 2017 being the first full month of operations for MGM National Harbor. MGM reported more revenue in January 2018 than 2017, but only marginally: the increase was 2.9 percent to $50.2 million. Maryland Live and Horseshoe Baltimore also had only slight changes: Live was down 1 percent to $43.5 million and Horseshoe was down 0.7 percent to $20.0 million. Of the other three casinos in Maryland, two (Hollywood and Rocky Gap) were down 1.2 percent and 1.1 percent respectively; Ocean Downs was up 23.6 percent to $4.5 million. (Ocean Downs has added table games since last year.) The rest of year will be interesting as both Maryland Live and Horseshoe Baltimore are going to do whatever they can to recapture some of the market share they lost to MGM last year.
Massachusetts will have only one casino - a racino - operating until the third quarter of 2018, when MGM Springfield will open. The MGM company is spending nearly a billion dollars on the property; unless it is a complete disaster, it should generate between $25 and $50 million a month in revenue. MGM Springfield will certainly impact Penn National's Plainridge Park operation, but at the same time it will grow the state's gaming revenue significantly.
In Massachusetts there is a third shoe waiting to fall: Wynn Boston Harbor is scheduled to open in June of 2019. At the moment there are still many questions to be answered about that property. With the scandal and drama around Steve Wynn and his name, the property could get a new name and still open on time. However, the Massachusetts Gaming Commission is reviewing the license and, in particular, the company's fitness for a casino license. In the commission's most recent statement, it said that Steve Wynn could not be separated from the company because of the amount of stock he owns. That implies that commission is going to hold the license hostage as long as he owns stock. This story will continue to unwind, but it will not have any direct impact on Massachusetts gaming revenues for at least the next 15 months.
As is to be expected, both New York and Kansas had more gaming revenue this January than last. Kansas has one more casino, Kansas Crossing. In January it accounted for $2.6 million of the $3.2 million increase in the state's gaming revenue. February and March will be the last months of an unequal year-over-year comparison, since Kansas Crossing opened on March 31, 2017. It has 625 slot machines, 16 table games, and 123 hotel rooms, which makes it a relatively small operation, but still has driven revenue up in the comparisons.
New York had new casinos in 2017. Of the total increase of $27.5 million in gaming revenue for the state in January, the new casinos generated virtually all of it: $27.1 million. New casinos will continue to drive the revenue increases in New York, at least until March 2019. But in the meantime, the VLTs are holding their own. There is of course one major factor that is not in the equation: Indian casinos. There are 12 Indian casinos in New York, with the latest, Oneida's Point Place, opening in March 2018. The revenue from Indian casinos are not public, but are certainly significant in comparison to other commercial casinos in the New York state.
The other state with new capacity driving the numbers is the ever-present Illinois with its increasing VLTs. The state's first VLTs were set out for play in September 2012, a total of 61 units that month. In January 2018, there were 28,403 VLTs in the state, 14.2 percent more than a year earlier, VLT revenue increasing by 15.9 percent, to $109.6 million. Casino revenue in the state continued its downward spiral, dropping 5.6 percent to $105.1 million. In January 2013, when there were only 3,381 VLTs generating $9.7 million in revenue in Illinois, casino revenue was $191.9 million; in January 2018, casino revenue in was 45.2 percent less.
Ohio's racinos and casinos have come to an uneasy truce in what is not really a war but is certainly a fierce competition. Racino revenue grew by a mere $200,000 in January to $71.3 million while casino revenue fell by only $900,000 to $63.0 million, approximately 1 percent.
In Ohio, racinos have VLTs and casinos have slot machines. In January 2017 there 11,013 VLTs at the racetracks in Ohio; a year later that number had increased to 11,262 units. In January 2017 there were 7,820 slot machines in the state's four casinos; a year later, that number had dropped to 7,317. At some point, the situation will stabilize, but not until no new competition is added to the regional market area, which includes Pennsylvania, Illinois, and Kentucky. Until then, the racinos will add VLTs and the casinos will remove slot machines.
Mississippi reported 9 percent less revenue in January than last year. Both regions with casinos, the river and the coast, posted declines. The river casinos were down 12 percent to $59 million, continuing a trend that began in 2007. The costal casinos were down 7 percent to $92 million, with the Biloxi Sun Herald reporting that January was extremely cold on the coast and thus the weather may have been a factor. But revenues statewide were down 2 percent for all of 2017, causing some lawmakers to push for a lottery to replace some of the revenue being lost by the decline in casino gambling.
Total gaming in Louisiana was down 3.8 percent in January. The Baton Rouge, Shreveport, and New Orleans markets were down, as were the VLTs and slots at the tracks; Lake Charles was up. The state does not report attendance for the VLTs, but for the Riverboats, New Orleans, and the slots at the tracks, there is a clear trend of decreasing attendance. In January 2018, 2,233,831 visitations were reported by the state; in 2017 that number was 2,392,572, and in 2016 it was 2,637,802; so in the past 24 months, visitations have dropped 15 percent. As in Mississippi, the trend has caused lawmakers to look for ways to increase the tax revenue the state collects from gambling. They are floating - pun intended - two ideas: to allow the riverboat casinos to move onto land, and to legalize sports betting. What is clear is that changes are necessary if Louisiana casinos are to hold their own in an ever -competitive marketplace.
In January, Nevada gaming win topped the billion dollar threshold for the 36 th time since March 2005. However, that was 1.2 percent less than January of last year. The gaming control board had a handful of explanations: Chinese New Year is in February, there was one less weekend day in January, and baccarat fell 28.3 percent to $113.2 million. According to board spokesperson Michael Lawton, reversing the baccarat decline alone would put the state up rather than down. But add a 3.3 percent drop in visitors to Las Vegas and a decrease of 1.9 percent in hotel occupancy (to 83.3 percent), and you have a more complete picture. In a nutshell: the Las Vegas Strip was down 8.9 percent to $554.7 million and therefore the entire state was down.
Elsewhere in Nevada: Downtown Las Vegas casinos were up 1.76 percent, Boulder Strip was up 6.8 percent, Laughlin was up 3.5 percent, Mesquite up 4.5 percent, and North Las Vegas up 0.4 percent. In the rest of the state Washoe County was up 11.14 percent, Carson Valley up 7.21 percent, and South Lake Tahoe up 14.83 percent. West Wendover casinos won $14.7 million, an increase of 15.8 percent, and the rest of Elko County posted an increase of 19.26 percent. The only area outside of the Strip to report a decline was the North Shore of Lake Tahoe, which depends on skiers in the winter - but there was no snow during January.
With only one month completed in 2018, it's impossible to discern longer-term trends. However, for February we do know that weather will be a factor for many parts of the country. New casinos and VLTs will once again make a contribution, the Adams Index will be affected by the Wynn crisis, and the stock market took a tumble. Will gaming revenues in February be up or down? It is hard to say, but the early indications are not terribly positive.
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