September 2018
July Was Not a Great Month,
But It Could Have Been Much Worse
For the gaming industry, July was not the sort of month for parades, balloons, and popping Champagne corks. There was something missing – actually, two somethings: a Friday and a Saturday. July 2017 had five full weekends with five Fridays, five Saturdays, and five Sundays, but 2018 had only four Fridays and four Saturdays. According to the David Rohn formula, July 2018 should have been, in theory, down 4.12 percent compared to 2017. In fact, total revenue from casinos and VLTs was up 1.02 percent to $3.6 billion. The 1 percent increase rather than a 4 percent decline can be easily explained. In New Jersey there were two new casinos, sports betting, and robust online gaming; Illinois has experienced ever-increasing VLTs; Maryland saw strong performance by MGM National Harbor; and the nascent casinos in New York are continuing to grow.
Year-to-date, for the first seven months, the national numbers were up 2.91 percent to $24.7. There are pockets of weakness in the country, but on a national basis the industry is very healthy, as evidenced by the increase in revenue in July despite two fewer weekend days.
The other factors that normally affect gaming are still positive: unemployment fell to 3.9 percent, personal income increased 0.4 percent, disposable income increased 0.3 percent, and customer spending was up 0.3 percent; customer confidence and GDP were up; and the long-running bull market shows no sign of ending. There are a few red flags: interest rates are creeping up, housing prices may be peaking, fuel prices are closing in on four dollars per gallon, and credit card debt is high. But so far these negatives are just indicators of the potential for a slowdown.
July 2018 Casino and VLT Revenue:

Atlantic City gaming revenue rose 12.8% to $302.1 million. Gaming Commission, 8-18
Delaware VLT revenue fell 15.2% to $28.3 million. Gaming Commission, 8-18
Detroit casino revenue rose 0.25% to $119.3 million.  Gaming Commission, 8-18
Colorado casino revenue fell 0.51% to $77.3 million.  Gaming Commission, 8-18
Florida slot revenue rose 0.4% to $45.4 million.  Gaming Commission, 8-18
Illinois gaming revenue rose 5.0% to $240.1 million. Gaming Commission, 8-18
Indiana gaming revenue fell 0.98% to $191.1 million.  Gaming Commission, 8-18
Iowa casino revenue f ell 2.0% to $124.2 million. Gaming Commission, 8-18
Kansas gaming revenue rose 3.2% to $34.5 million. Gaming Commission, 8-18
Louisiana gaming revenue fell 4.0% to $269.9 million. Gaming Commission, 8-18
Maine gaming revenue fell 1.5% to $12.9 million. Gaming Commission, 8-18
Maryland gaming revenue rose 5.6% to $146.5 million. Gaming Commission, 8-18
Massachusetts gaming revenue fell 1.9% to $15.1 million.  Gaming Commission, 8-18
Mississippi gaming revenues fell 0.5% to $186.3 million.  Gaming Commission, 8-18
Missouri gaming revenue fell 2.0% to $150.5 million.  Gaming Commission, 8-18
Nevada gaming revenue fell 0.2% to $996.4 million. Gaming Commission, 8-18
New York VLT revenue rose 6.7% to $221.9 million.  Gaming Commission, 8-18
Ohio gaming revenue rose 2.7% to $158.6 million.  Cleveland Plain Dealer, 8-8-18
Pennsylvania gaming revenue fell 3.3% to $277.4 million. Gaming Commission, 8-18
Rhode Island VLT revenue rose 1.4% to $42.7 million. Gaming Commission, 8-18
South Dakota gaming revenue rose 1.8% to $28.0 million. Gaming/Lottery Commission, 8-18
Total national gaming revenue for July rose 1.02% to $3.668 billion. David Rohn, 8-187
Total gaming revenue for 7 months of 2016 rose 2.91% to $24.745 billion. David Rohn, 8-18
The Other categories:
Connecticut slot win rose 0.3% to $98.5 million.  Associated Press, 8-18
Macau gaming revenue rose 10.3% to $3.13 billion. Reuters, 8-1-18
Kentucky historical horse racing win rose 17.0% to $7.8 million. Racing Commission, 8-21-18
Adams Index rose 1.2% to 547.84. CDC Gaming Reports, 8-1-18
The Dow rose 4.7% to 25,415.19. Yahoo Finance, 8-1-18
The Jurisdictional Narrative:

The main story in July in Atlantic City was about sports betting and new casinos, not missing weekend days. July was the best month Atlantic City has seen in a long time. Casino win was up 10.1 percent to $272.3 million, though not counting the $32.7 million from the new Hard Rock and another $17.0 million from Ocean Resorts, the other seven casinos generated $250.1 million, down 7 percent from last year. Online gaming continued its growth, up 25.8 percent in July to $25.8 million. July also included one totally new source of gaming revenue, sports betting. Sports betting in Atlantic City and at Meadowlands and Monmouth Park race tracks was $3.8 million in July.
Detroit revenues were up slightly, due to the lingering effect of the strike that closed Caesars Windsor, across the border in Canada. Detroit has been battered for years by casinos in Ohio, Indian casinos in Michigan and Wisconsin, and by VLTs in Illinois, so any let up in competitive pressure must have felt good to the city’s three casinos.
Illinois is stuck in a grove: each month there are more VLTs than the year before and more VLT revenue, and as VLTs grow there are fewer casino customers and casino revenue in the state. In July, VLT win from 29,440 VLTs rose 15.2 percent to $120.8 million, casino win fell 3.6 percent to $119.3 million, and casino admissions fell 9.4 percent to 966,514. The trend may get worse for existing casinos, because the state legislature is holding hearings and considering expanding gaming even further, to include slot machines at race tracks, more casinos, including one in Chicago, and sports betting. Of these, only sports betting would aid the existing casinos.
Maryland’s casinos continue to exceed expectations, with revenue was up 5.6 percent in July, driven as it has been for the last 18 months by the very strong performance of MGM National Harbor. In July, National Harbor had a win of $58.3 million, up 14.9 percent. Considering the calendar handicap, that 14.9 percent growth demonstrates the strength of MGM in the Washington D. C. area market. MGM accounted for 42 percent of the total win for Maryland casinos. Ocean Downs was up 34 percent to $8.6 million, due to the addition of table games to a previously slots only operation. The other casinos did not do as well: Live! had a win of $47.7 million, an increase of 1 percent over 2017, and the Baltimore Horseshoe was down 11.1 percent to $20.4 million. The decrease at the Horseshoe is part of a trend - the casino has been down all but two months since the MGM opened in December 2016.
New York is also performing above predictions. There are now four casinos in New York; in July, those four generated $45.2 million in gross gaming revenue, compared to three casinos and $32.2 million a year ago. VLT revenues were down 1.1 percent to $176.7 million; demonstrating their strength: despite faced increased competition, revenues have remained stable, even in a month when a 4 percent decline would have been expected.
Louisiana had a spot-on 4 percent decrease. The detail, however, was not that simple or straightforward: riverboat revenue fell 6.6 percent to $168.0 million and admissions fell 6.1 percent to 2,029,567, with the Baton Rouge market down 8 percent due to a newly imposed smoking ban in casinos. The state’s gaming control board chairman placed the blame for the decline in riverboat revenue on the smoking ban, legalization of sports betting in Mississippi, and expanded gaming in Oklahoma and Arkansas. Harrah’s New Orleans was down 1.9 percent to $23.5 million, but admissions increased by 75,329 for a total of 484,701. The state’s 12,897 VLTs generated $47.6 million, up 3.4 percent. The slots at the race tracks were down 2.3 percent, with admissions off by 2.0 percent.
Kansas is having a good year. There are now four casinos in the state and in July the casino win was up 3.2 percent to $34.5 million. All four casinos posted an increase.
The increase in gross gaming revenue in Ohio was not as good as New York, New Jersey, or Maryland, but not as bad as Louisiana’s decrease. Like Louisiana, there is more than one narrative in Ohio. The racinos reported $88.9 million, up 5.2 percent from 2017, while casino win declined 0.3 percent to $69.7 million. The racinos have consistently outperformed the casinos, with 7,321 slot machines in Ohio averaging $212 a day in win versus 11,255 VLTs averaging $254 a day in win. I don’t know the reason for the difference, but I suspect parking is a big factor.
Colorado, Florida, Indiana, Iowa, Maine, Massachusetts, Mississippi, Missouri, and Pennsylvania all reported results well within the calendar-impact expectations. Pennsylvania casino revenue was down the most, 3.3 percent. The Sands in Bethlehem, the state’s leader in table game play and second highest in slot win, is being impacted by Genting Catskills in New York. In general, Pennsylvania is in flux this year, with sports betting, online gaming, VLTs outside of casinos, and mini-casinos all having been authorized. None have begun to report revenue, but eventually all will add to the state’s total gaming revenue and gaming taxes. The expansion is not likely to have a net positive impact on the existing casinos, however.
Nevada was down by a tiny fraction. As is usually the case, the cause can be found in the table games on the Las Vegas Strip. Michael Lawton of the gaming control board said, "If we would've held a little better in some table games, we would've had a really good chance probably of beating last year's number. But table games hold was a big reason why we were down slightly." The Strip win was down 5.8 percent to $533.1 million, baccarat was down 16.4 percent, blackjack fell 6.6 percent, and craps was off 13.3 percent. It was extremely hot in Las Vegas in July, so it’s not surprising that visitor volume was down 3.4 percent and convention attendance was off 19.5 percent. Still, downtown Las Vegas revenues were up 8.2 percent to $48.8 million, so the decline on the Strip was not caused by the heat, or lack of conventioneers or tourists in general; it was the result of a few high-rollers getting lucky. The rest of state had fluctuations as well; for example, Lake Tahoe was up 25.5 percent and Reno was down 1.4 percent. As Lawton implied, if the table games had held, things would have been rosy in July. Still, the numbers from Nevada were pretty good – a less than one percent decline in a month with two fewer weekend days.
In Indiana, one of the casino operators blamed the hot summer weather and the calendar for his property’s poor performance in July. But his comments about the calendar could easily be applied to the entire country: "The 4th of July being on a Wednesday this year was tough. We gave up a (fifth) Saturday for a Tuesday this year." Still, looking across the entire first seven months of 2018, such factors fade away; year-to-date the gaming industry is up 2.9 percent. The increases in casinos and VLTs have been the major factors, and they will continue to drive revenue increases for at least the next 12 months, as long as the economy stays strong. 
This report is written by Ken Adams