March 2019
January Was a Very Good Month for Some,
but Not for All

The first month of 2019 is now in the books . Nationwide, the combined casino and VLT revenue for January was up 2.94 percent to $3.3 billion, compared to a year earlier. Indiana, Iowa, Missouri, and Nevada had significant decreases in win for the month, but the rest of the country reported increases, although many were minor. The calendar did not play a role, as January in 2018 and 2019 had four Fridays, Saturdays, and Sundays, although New Year’s Eve and Day were slightly different. In 2018, New Year’s Day fell on a Monday while in 2019 it was on a Tuesday, which might have had a small impact.
 
The weather could also have been a factor in some states in January, particularly in the Eastern Seaboard and the Midwest. Nationally, the month was wetter than normal - the third wettest month on record. In January, wet often means snow, and snow is not good news to most casinos, so revenues could have been depressed as a result.
 
Weather and the calendars are only situational; they change from month to month. The larger narrative for 2019 will probably be much like 2018: new casinos, more VLTs, and growth in sports betting. Those forces of expansion will drive gaming revenues up in some places, while their impact will pull down revenues in other locations and for some forms of gaming. The narrative is becoming more nuanced.
January 2019 Casino and VLT Revenue:
 
Atlantic City total gaming revenue rose 24.6% to $229.6 million. Gaming Commission, 2-19
 
Colorado casino revenue fell 0.31% to $63.8 million. Gaming Commission, 2-19
 
Delaware VLT revenue rose 11.1% to $26.0 million. Gaming Commission, 2-19
 
Detroit casino revenue rose 0.5% to $112.0 million. Gaming Commission, 2-19
 
Florida VLT revenue rose 3.7% to $49.2 million. UNLV, 2-19
 
Illinois gaming revenue rose 0.186% to $215.1 million. Gaming Commission, 2-19
 
Indiana gaming revenue fell 4.7% to $186.7 million. Gaming/Racing Commission, 1-19
 
Iowa casino revenue fell 6.4% to $102.8 million. Gaming Commission, 2-19
 
Kansas gaming revenue rose 0.64% to $31.3 million. Gaming Commission, 2-19
 
Kentucky machine revenue rose 134.8% to $14.2 million. Racing Commission, 2-19
 
Louisiana gaming revenue rose 2.4% to $236.6 million. Gaming Commission, 2-19
 
Maine casino revenue fell 2.0% to $9.5 million. Gaming Commission, 2-19
 
Maryland gaming revenue rose 7.3% to $136.9 million. Gaming Commission, 1-19
 
Massachusetts gaming revenue rose 158% to $32.0 million. Gaming Commission, 2-19
 
Mississippi gaming revenue rose 15.7% to $175.2 million. Gaming Commission, 2-19
 
Missouri gaming revenue fell 3.6% to $126.0 million. Gaming Commission, 2-19
 
Nevada gaming revenue fell 3.01% to $984.5 million. Gaming Commission, 2-19
 
New York gaming revenue rose 9.1% to $202.3 million. Gaming Commission, 2-19
 
Ohio gaming revenue rose 3.3% to $140.6 million. Gaming/Lottery Commission, 1-19
 
Pennsylvania gaming revenue rose 2.18% to $252.2 million. Gaming Commission, 1-19
 
Rhode Island VLT revenue rose 8.9% to $52.2 million. Gaming Commission, 2-19
 
South Dakota gaming revenue rose 6.3% to $25.3 million. Gaming/Lottery Commission, 2-18
 
Total gaming revenue for January rose 2.94% to $3.378 billion. David Rohn, 2-19

The other categories:
 
Connecticut slot win fell 9.0% to $71.1 million. Associated Press, 2-15-19
 
Macau gaming revenue fell 5% to $3.1 billion. Reuters, 2-1-19
 
Dow Jones rose 7.1% to close at 24,999.67. Yahoo, 1-31-19
 
Adams Index closed January at 581.71. CDC Gaming Report, 1-19

At the first of each year it is a good idea to review processes and make appropriate adjustments. One of those adjustments will be adding sports betting into the totals . That may be a bit of challenge as every state is reporting it differently.
 
In 2019, there are two jurisdictions with additional categories in their totals. In Indiana, the revenue from VLTs at race tracks has been added. In Rhode Island, table games and sports betting are new this year.
 
Also, the Adams Index has been updated to reflect some changes in the industry. The two major REITs, MGP and GLPI, have been added, due to the growing significance of REITs in gaming. Churchill Downs has also been added, since is a significant player in the industry; it probably should have been on the list earlier. Golden Gaming is also becoming more important and is now on the list. And finally, Pinnacle has been deleted. The Adams Index is now based on the following companies: Boyd, Las Vegas Sands, MGM International, MGM Growth Properties (MGP), Penn National, Wynn, Eldorado Resorts, IGT, Scientific Games, Monarch Resorts, Caesars, Gaming and Leisure Properties (GLPI), Golden Gaming, and Churchill Downs.

Across the Country

Atlantic City started 2019 with as much enthusiasm as it ended 2018. Atlantic City has two new casinos and growing online gaming and sports betting, all of which contributed to an impressive 24.6 percent increase in total gaming revenue. Casino revenue was up 9.32 percent to $177.3 million.  The win from online gaming was up 53 percent to $33.6 million, and sports wagering added $18.8 million, $9.0 million of which came from the two race tracks, Meadowlands and Monmouth Park.
 
Ocean Resort and Hard Rock, the two new casinos, combined for $27.9 million of the casino win; the remaining seven casinos generated $149.3 million in win, down 17.1 percent from January 2018. The combined casino and internet revenue at Golden Nugget was up 14.3 percent to $26.7, putting the property second on the total revenue chart. But of the seven casinos that were open a year earlier, only Resorts reported an increase in casino win, up 8.8 percent to $12.6 million, with Resorts Digital, a separate entity, reporting $6.6 million in online revenue, up 65 percent.
 
The situation for the city’s nine casinos is neither stable nor sustainable. Ocean Resort has been taken over by a trustee due to its poor performance, and before the end of the year it is likely at least one other casino will be in serious financial difficulties. The overall picture is one of healthy, growing industry in New Jersey, but the details reveal something more mixed.
 
Gaming in Pennsylvania and New Jersey have been locked together for more than ten years. During the majority of that time, Pennsylvania took market share from New Jersey. However, with the expansion of gaming in Ohio, New York, Maryland, and Massachusetts, Pennsylvania is beginning to feel the pain of competition. It has become vulnerable to forces outside its borders, like New Jersey.
 
The most exposed casino in the Keystone State is the Sands Bethlehem, which is the closest casino to the new casinos in New York. In January, revenue at the Sands was down 4.27 percent to $39.3 million, a trend that is nearly a year old. But the Sands was not alone; of the twelve casinos in the state, seven reported a decrease in casino win. The best performing casinos are those closest to Philadelphia and Pittsburg: Parx was up 8.56 percent to $49.5 million, and Rivers was up 12.7 percent to $30.3 million. In January, there were six sports books in operation in the state. In the first full month of sports betting, with a handle of $30.0 million, the win was $2.6 million.
 
Casino revenues in New York are still on the upswing, because of the four casinos that opened since December 2016. The newest is Resorts World Catskills, which opened in February of 2018; when it opened, it added 2,100 slot machines to the existing 4,000 slot machines in the state’s casinos. In January, Resorts had $13.0 million in win, Tioga Downs had $5.6 million, del Lago reported $10.7 million, and Rivers added $11.3 million to the total. Total casino revenue was up 49 percent to $40.6 million.

Also in the Empire State, the racinos, feeling the pressure of the new casinos, are adjusting. VLT win in New York was up 2.1 percent, but with fewer VLTs: in January there were 18,428 VLTs, down 3.7 percent from the previous year. It can be expected that more racino VLTs will be taken out of the market as revenues continue to shift to casino slots.
 
In Massachusetts, January revenue was up dramatically due to MGM Springfield, which had $19.6 million in revenue. By contrast, Plainridge Park reported $12.3 million, down 0.8 percent from 2018. MGM Springfield had a slot win of $13.0 million from approximately 3,000 slots; Plainridge Park had $12 million from 1,250 slots. MGM may have taken a small percentage of the Plainridge’s revenue, but given that it has table games and hotel rooms (Plainridge has neither) and nearly 2,000 more slot machines, it is hardly tearing up the market.
 
MGM Springfield’s biggest impact has been on the two Indian casinos in Connecticut. Foxwoods reported slot win of $31.0 million, an 8.5 percent decrease and the lowest amount in 25 years. Mohegan Sun had $40.7 million, down 9.4 percent and its smallest amount in 18 years. The two casinos had 8,634 slot machines between them, down 321 from last year, but 5,280 fewer slot machines than in January of 2009 when regional expansion first began to have an impact.
 
Maryland gaming revenue is still growing, although no new casinos opened in the last twelve months. The 880-pound gorilla in the Maryland is MGM National Harbor, whose presence and growth are forcing other casinos to adapt. In January MGM had $56.2 million in revenue, up 11.9 percent from the previous year; it has added 427 slot machines and 23 table games since January 2018. Live! Casino & Hotel reported $46.2 million in casino win, up 6.3 percent, with 23 fewer slot machines in January, but still the most in the state, at 3,827. Horseshoe Baltimore had $20.1 million in win, up 0.6 percent; since last year, that casino has taken 8 slot machines and 9 table games off the floor. The other three casinos in the state had essentially the same number of slots and table games in both January 2018 and January 2019. Ocean Downs and Rocky Gap had revenue increases in January, but Hollywood reported a 4.3 percent decline to $5.4 million.
 
In Ohio , the total casino win was $62.4 million, down 0.95 percent. The racinos won $78.2 million from their slots, up 6.9 percent, with slot win per machine per day up 6.2 percent to $222. Together the casinos and racinos reported gaming revenue of $140.6 million, up 3.3 percent. The four casinos in Ohio reduced the number of table games to 400 from 411 a year earlier, and slot machines to 7,292 from 7,317. The seven racinos have increased the number of their slot machines by 116 to 11,384 games.
 
VLT win from Indiana’s two racinos was $33.8 million, the same as last year. But the casino gaming win fell 5.7 percent to $152.9 million. The casinos had 18,088 slot machines in January, 738 less than in 2018 and 676 tables, 8 fewer that the previous year. Since Indiana no longer charges an admission tax, the number of people entering the casinos in no longer available; in January 2018, admissions totaled 8,509,264. By way of comparison, in January 2012, the year that neighboring Ohio opened casinos, casinos in Indiana had 14,485,531 admissions, with 22,636 slot machines, 737 table games, and $203.8 million in casino win.
 
Illinois may have reached its peak in revenue growth. Since 2013, the growth has been driven by the dramatic increase in VLTs year-over-year. But total gaming revenue in Illinois increased by a mere 0.18 percent in January, with increasing VLT revenues essentially offset by an equal drop in casino revenues.
 
In January, there were 30,845 VLTs in Illinois, 2,442 more than last January, and VLT revenue was up 9.8 percent to $120.4 million. Casino revenue fell by 9.8 percent to $94.7 million and admissions fell 11.2 percent to 733,469. Since last January, the casinos have taken 232 slot machines off the floor, leaving 9,711. Table games at the casinos remained essentially the same at 318 tables, with fewer blackjack tables, but more poker and blackjack-plus games.
 
The situation in Louisiana is very much as it was last year. Louisiana has authorized its riverboat casinos to move to land, but none have actually done so. Sports betting has been discussed but not yet legalized.
 
Louisiana reports four categories of revenue: VLTs, riverboats, land-based (Harrah’s New Orleans), and slots at the tracks. VLT revenue was up 11 percent to $49.1 million, despite the number of locations being down by 57 to 1,679 and the number of units dropping by 78 to 12,929. Riverboat casino win was down 4.1 percent to $139.8 million. (Details: the Shreveport market was down 5.8 percent to $45.9 million; Lake Charles was up 3.5 percent to $55.8 million; New Orleans was up .5 percent to $20.1 million; and Baton Rouge was off 20.7 percent to $20.5 million.) Harrah’s New Orleans reported an 11.5 percent increase to $22.7 million. Win from the slots at the four horse racing tracks was up 5.1 percent to $27.8 million. Admissions at the riverboats, Harrah’s and racetracks was virtually unchanged from 2018, the total dropped 4,778 to 2,229,053. Local media cited sports betting in Mississippi as the major factor for the decline.
 
And indeed, sports betting may have helped drive traffic in Mississippi . Win statewide was up 15.7 percent, with the coastal casinos (in Biloxi) up 16.7 percent to $107.4 million, the central casinos (Vicksburg/Greenville/Natchez) having a 13.6 percent increase in win to $23.3 million; and the northern region (Tunica) having a 14.4 percent growth to $44.3 million. The number of slot machines decreased by 227 year-over-year; the decrease was at Tunica, which has struggled for years. Sports betting might have been responsible for more people going to casinos, but the betting numbers are not impressive and did not add much to the total revenue. In January the state had 40 sports books, with a handle of $5.6 million and a win of less than half a million. So while sports betting in Mississippi may be nothing to write home about, it is giving heartburn to lawmakers and operators in Louisiana.
 
Rhode Island also had sport betting in January. Like Mississippi, the numbers were insignificant: $159,978 total from the state’s two casinos. The Twin Rivers casino reported combined table game and VLT revenue of $43.1 million, an increase of 1.6 percent. The Tiverton casino had a win of $9.0 million, an increase of $5.7 million over last year, when it was at its old location, in Newport (and called the Newport Grand), where it had less floor space and no attached hotel.
 
For January, the Nevada Gaming Control Board reported casino win fell 3 percent to $984.6 million, once again below the magic number of one billion dollars. Slot machine win was flat at $658.5 million. Table games were down 9.3 percent to $326.0 million, and the win from sports betting was $14.6 million on a handle of $497.0 million.
 
The Las Vegas Strip set the tone, down 4 percent to $532.3 million. The usual suspect, baccarat, was down 15 percent to $52.1 million; blackjack was down 7.5 percent to $90.2 million; and craps was down 1.6 percent to $34.7 million. The rest of the Las Vegas area had mixed results: Downtown Las Vegas fell 7.63 percent to $52.1 million, North Las Vegas was up 1.6 percent to $29.2 million, and the Boulder Strip was down 9.6 percent to $81.8 million. Visitations to Las Vegas were up 2.1 percent to 3.46 million and convention attendance increased 11.5 percent to 683,400. If the conventioneers had just played a bit more and lost a bit more, January would have been a much better month.
 
Other jurisdictions in the Silver State also reported mixed results. Reno was down 1.1 percent to $44.12 million, Sparks was up 5.5 percent to $10.1 million, casinos on the North Shore of Lake Tahoe were up 2.5 percent, and casinos on the South Shore were down 14 percent. In Carson Valley, casinos were up 8.9 percent; in Elko County, casino win was up 6.7 percent to $24.5 million.
 
One final note: gaming revenue in Macau decreased for the first time in twenty-nine months. That is probably the result of a slowing Chinese economy, the U. S./China trade war, and the new Social Credit System in China. When your sugar daddy gets mad or gets sick, you suffer.
 
In summary, the combined revenue from casinos, VLTs, and sports betting in January was up nearly 3 percent to $3.3 billion. As the detail reveals, the increase is due to added options and more capacity. But within each jurisdiction which reported increases, there were properties and categories that had declines as a result of the expansions. That is the core of the national narrative and will continue to be the narrative for all of 2019. The good news is that if the economy remains stable, no war is declared, and a major natural disaster does not occur, 2019 should be another year of overall growth.
This report is written by Ken Adams