July 2019
May Featured an Extra Friday, Sports Betting,
and a Bad Month on the Strip

The monthly growth in gaming revenue that has characterized 2019 flattened out somewhat in May. The total for casino, sports, VLT and (included) online win was $3.769 billion, up 2.49 percent from 2018. The calendar was a major factor in the increase, with the extra Friday in 2019 creating a 1.9 percent theoretical advantage. This year also has the advantage of legal sports betting in five states, compared to one state in May 2018.
 
Considering that travel on Memorial Day weekend was the highest in the 21 st century, the results for May are underwhelming, especially when considering the additional sports betting. The increase exceeded the theoretically-expected amount, but not by much. The less-than-stellar growth rate might be the result of a maturing of the industry in Maryland, Illinois, and New York. But probably most important, Nevada gaming, which makes up nearly 30 percent of the national figure, was off 5.9 percent.
 
The overall picture for May 2019 is not dark, it’s just not as bright as it was last May. And year-to-date, revenues are up 3.00 percent to $18.395 billion, which is better than last year’s 2.81 percent increase.

May 2019 Casino and VLT Revenue:
 
Atlantic City gaming revenues rose 27.1% to $276.7 million. Gaming Commission, 6-19
 
Colorado casino revenue rose 3.3% to $73.4 million. Gaming Commission, 6-19
 
Delaware gaming revenue rose 5.9% to $33.9 million. Gaming Commission, 6-19
 
Detroit casino revenues rose 0.88% to 125.7 million. Gaming Commission, 6-19
 
Illinois gaming revenues rose 8.4% to $265.9 million. Gaming Board, 6-19
 
Indiana gaming revenue rose 1.1% to $230.1 million. Gaming/Racing Commission, 6-19
 
Iowa casino revenues rose 6.1% to $130.8 million. Gaming Commission, 6-19
 
Kansas gaming revenue rose 9.0% to 36.6 million. Gaming Commission, 6-19
 
Kentucky historic racing win rose 141.7% to $18.6 million. Racing Commission, 6-19
 
Louisiana gaming revenue fell 0.33% to $272.1 million. Gaming Commission, 6-19
 
Maine gaming revenue rose 1.6% at $12.2 million. Gaming Commission, 6-19
 
Maryland gaming revenue fell 2.7% to $152.2 million. Gaming Commission, 6-19
 
Massachusetts slot revenue rose 153.4% to $37.0 million. Gaming Commission, 6-19
 
Mississippi gaming revenues rose 2.1% to $184.3 million. Gaming Commission, 6-19
 
Missouri gaming revenues rose 5.0% to $152.5 million. Gaming Commission, 6-19
 
Nevada gaming revenue fell 5.9% to $981.8 million. Gaming Commission, 6-19
 
New York casino/VLT revenue rose 4.0% to $234.1 million. Gaming Commission, 6-19
 
Ohio gaming revenue rose 10.4% to $169.4 million. Gaming/Lottery Commission, 6-19
 
Pennsylvania gaming revenue rose 3.75% to $290.6 million. Gaming Commission, 6-19
 
Rhode Island VLT revenue rose 8.8% to $61.6 million. Gaming Commission, 6-19
 
South Dakota gaming revenue rose 8.6% to $30.1 million. Gaming/Lottery Commission, 6-19
 
Total national gaming revenue rose 2.49% to $3.769 billion. David Rohn, 6-19
 
Total national Year to date gaming revenue rose 3.00% to $18.395 billion. David Rohn, 6-19


The other categories:
 
Dow Jones Industrials fell 6.6% to 24,815.02. Yahoo Finance, 5-31-19
 
Adams Gaming Index fell 11.7% to 544.73. CDC Gaming Reports, 5-31-19
 
Macau gaming revenue rose 1.8% to $3.2 billion. Reuters, 6-1-19
 
Connecticut gaming revenue fell 3.9% to $85.2 million. Hartford Business, 6-15-17


Across the Country

Atlantic City is still riding the wave of online gaming and sports betting. That may not last, but for the time being that wave is obscuring the underlying problems. Total gaming was up 21.1 percent, with the casino win up 15.3 percent to $222.9 million, including $44.0 million from Hard Rock and Ocean Resorts, the newer casinos. Of the older casinos, only Caesars and Resorts were up over 2018 and their combined increase was only $700k. Those two facts hint at the problems below the surface numbers.
 
Sports win was $15.5 million in May, and both the handle and the win were higher than Nevada, which used to be the only legal place for sports betting. The handle in New Jersey was $318.9 million compared to Nevada’s $317.4 million; the Nevada win was $11.6 million. Sports betting is the most underserved segment of the industry and thus far its spread to other states, while positive for those states, has not had a negative impact on Nevada.
 
For Atlantic City, online gaming was up 57 percent to $38.3 million; online revenues were 13.8 percent of the total win. For the Golden Nugget, the internet gaming win ($14 million in May) is approaching the casino win ($17.1 million). With those two revenue sources combined (at $31.1 million), the Golden Nugget moves up the list from sixth to second in the city. By contrast, Borgata, the market leader, had $5.9 million from online gaming and $55.2 million from bricks and mortar, for a total of $61.1 million.
 
Illinois is still a broken record: combined casino and VLT revenues were up 8 percent, driven by the ongoing increase in VLTs. In May there were 31,844 VLTs, an increase of 9.9 percent, and VLT win was up 18 percent to $147.7 million. Casino admissions, a total 900,284, were down 3.2 percent, and casino win was down 1.7 percent to $118.2 million. The overall state growth rate may have slowed slightly, but it will get a boost from the recently passed gaming expansion legislation. The legislation permits one additional VLT in each location, to a maximum of 6 rather than 5. In May, in the Land of Lincoln, there were 7,000 establishments with VLTs.
 
Indiana showed a rare increase in May: casino revenue was up $800k to $191.9 million, probably due to the extra Friday, and slot revenue increased by $1.9 million, while table games were off $1 million. The number of slot machines remained constant with 18,094 slots in the state’s 13 casinos. The two racinos in Indiana are authorized 2000 slots each and revenue has been consistent year-over-year.
 
Indiana is struggling to compete with Illinois and Ohio, and state lawmakers have passed legislation intended to make the state’s casinos more competitive with its neighbors. Both Illinois and Indiana are now gearing up to fight a full-fledged war; the next battle is to see which can implement their new legislation first and gain a competitive advantage.
 
Louisiana r eported less than a 1 percent decline in gaming win in May. The results from the state’s four separate sources were mixed. VLT revenue rose 7.1 percent to $54.2 million despite 100 fewer VLTs. Riverboat win was down 2.9 percent to $160.0 million: Shreveport/Bossier was down 2.6 percent to $53.3 million, Lake Charles was off 1.6 percent to $61.8 million, the New Orleans market was up 3.9 percent to $24.3 million, and Baton Rouge fell 14 percent to $20.5 million. The land-based Harrah’s New Orleans win dropped 1.9 percent to $26.4 million. The slots at the tracks were up 2.9 percent to $31.5 million. Total admissions to the casinos and racetrack was off by 4.4 percent to 2,444,726.
 
Mississippi was up by 2 percent. The central and coastal regions were both up; the central region casinos by 4 percent to $25.9 million, the coast by 2.2 percent to $109.4 million. Meanwhile, the northern region, Tunica, was off by 1.6 percent to $47.9 million. Statewide sports betting win was $1.1 million on a handle of $17.4 million.
 
Maryland reported the rarest of things for its casino industry in May, a decrease in revenue. Since December of 2016, gaming win in Maryland has shown significant growth every month. In May, MGM National Harbor was down 5.1 percent to $59.1 million, the first month of declining revenues for the state’s newest and largest casino. The Horseshoe Baltimore was off 14.6 percent to $20.5 million; since MGM opened, declining revenues have been frequent for the Horseshoe. The other four casinos in the state all reported increases in May: Live was up 2.8 percent to $53.4 million, Ocean Downs was up 12.5 percent to $7.2 million, Hollywood was up 1.9 percent to $6.9 million, and Rocky Gap was up 0.2 percent to $4.9 million. The state lottery director had this to say about May: “As Maryland’s casinos reach full development of their respective markets, we will begin to see more volatility in month-over-month results. We fully expect long-term growth to continue to be positive.”
 
New York’s VLTs and casinos both reported increases in gaming win in May. The VLTs were up 1.8 percent to $184.9 million from 17,228 units, a decrease of 1,400. Casino win was up 13 percent to $49.2 million, with all four of the state’s casinos up; Resorts World Catskills was up the most, 26 percent to $14.8 million. Except for the Rivers casino, the casinos have reduced their slot inventory; again, Resorts by the most. Resorts removed 542 games, leaving 1612 units on the floor. Resorts World has two operations in the state, Resorts World New York City, a racino, and Resorts World Catskills. Their combined revenue in May was $76.6 million, approximately one third of the state’s total.
 
New York illustrates a trend of attempting to adjust the slot floor to what are market realities. The intense regional competition will put continued pressure on all of the casinos in the region, not just in New York, to reduce their inventories to fit the demand.
 
Pennsylvania outperformed the theoretical in May. Both table games and slots reported increases; tables were up 2.2 percent to $76.5 million and slots were up 2.7 percent to $209.5 million. Sports betting added $2.8 million in win and fantasy sports another $1.8 million. Sports handle was $35.3 million across eight casinos, with $500k of that coming from online wagering at the only casino, Sugar House, to offer that. Although the overall win was up, two casino reported decreases: Wind Creek, formerly the Sands, had $43.6 million in win, down 6.3 percent; and Harrah’s Philadelphia was down 5.6 percent to $21.2 million. The best performing casino in the state continues to be Parx; revenues at Parx were up 2.7 percent to $53.1 million. Wind Creek was second and Rivers was third with $32.5 million, up 12.2 percent from 2018.
 
Ohio casinos and racinos performed very well in May. Casino win from the state’s four casinos was up 6.8 percent to $73.4 million, with table games up 10 percent to $23.4 million, and slots up 5.2 percent to $50.0 million from 7,238 games, 20 less than last year. Hollywood Columbus had the most win, $18.9 million, up just $400k from 2018; Jacks Cincinnati was second with $18.8 million, up 10 percent year-over-year; Jacks Cleveland was up 12.8 percent to $17.9 million; and Hollywood Toledo had $17.7 million in win, up $300k. The VLT win from the seven racinos was up 13.2 percent to $95.9 million, from 11,499 units, 242 more than in 2018. All of the racinos reported increases, with the MGM Northfield being the highest grossing racino with $21.8 million in win from 2265 VLTs. Eldorado Scioto Downs was second with $16.6 million from 2239 VLTs; Miami Valley Gaming was third with $15.6 million from 1925 VLTs.
 
Nevada was down 1.8 percent in May to $936.4 million. The Las Vegas Strip was off 3.5 percent to $481.8 million; Downtown Vegas was up 2.1 percent to $61.7 million; the Boulder Strip was down 0.2 percent to $78.1 1 million, and Laughlin was down 2.7 percent to $45.3 million. In the north, Reno was up 3.2 percent to $48.9 million, Sparks was down 3.2 percent to $10.6 million, North Lake Tahoe fell 16.1 percent to $1.2 million, and the South Shore was off 12.5 percent to $13.0 million. (The Nevada gaming control boarded blamed the weather for the poor results at Lake Tahoe, saying every month this year had been challenging because of adverse weather.) The Carson Valley casinos were down 0.06 percent to $9.0 million.
 
By game type, slots in Nevada were up 1.4 percent to $679.9 million, from 140,583 slot machines in 316 locations. Table games fell 19.2 percent to $302.1 million, and baccarat fell 54.8 percent to $54.6 million with a win rate of 7.5 percent. By comparison, last May the baccarat win was $120.8 million with a 16.1 percent win rate. Blackjack fell 12 percent to $90 million, craps were up by 27 percent to $39.9 million, and roulette was up 9.9 percent to $34.8 million. And, as mentioned above, the sports win was $11.6 on a handle of $317.4 million.
 
It was not a good month for Nevada all the way around, but setting aside baccarat and blackjack, things were not that bad. And if you are looking for good news, next May the comparisons are likely to be better, unless of course baccarat continues its fall.
 
In general, once a local industry reaches maturity, it is subject to monthly variations based on luck, weather, and competition. In the past, Nevada has dealt with Indian gaming in California, Arizona, New Mexico, Oregon, and Washington. Now with the spread of sports betting across the country, Nevada is faced with yet another form of competition. Nevada has to learn to adapt, but it is not alone. Casinos and racinos in every state are going to have to continue to adapt. For the time being Atlantic City has the advantage with its sports and online gambling, but Pennsylvania has just started to ramp up. The gaming world is an ever-changing environment.
 

This report is written by Ken Adams