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November 2017
Like a Hot Air Balloon, Revenue Goes Up, Up
in November
 
Gaming revenue in November was up 3.8 percent to $3.225 billion compared to a year ago, for the first eleven months of the year, revenue was up 3.7 percent to $37.7 billion. And for a change the calendar was not a factor: in both 2016 and 2017, November had four Fridays, Saturdays, and Sundays.
 
The usual "expanded capacity" explanation is still part of the national narrative, but consumer spending was also on a record-breaking pace in November. The three super-shopping days in November, Singles' Day, Black Friday, and Cyber Monday, had exceptional sales volumes. Moreover, the stock market has been in record territory all year, and the other common economic measures - housing prices and sales, income, and employment - also were up. Each is finally above the levels reached just before the Great Recession arrived. All-in-all, the economy appears to be set to close the year as one of the best since the Clinton administration in the 1990s.
 
The overall economy was certainly a factor in the health of gaming industry in November. All but three states reported increases in gaming revenue. For once the majority of the growth cannot be attributed to more casinos or VLTs. And the three states with less revenue were clearly anomalies, the results of bad weather and bad luck.


November 2017 Casino and VLT Revenue:
Atlantic City gaming revenues rose 4.6% to $206.4 million. Associated Press, 12-13-17
 
Colorado casino revenue rose 5.8% to $66.6 million. Gaming Commission, 12-17
 
Delaware gaming revenue rose 2.8% to $32.5 million. Gaming Commission, 12-17
 
Detroit casino revenues rose 1.4% to $113.1 million. Gaming Commission, 12-17
 
Florida VLT revenue rose 2.1% to $423.3 million. Gaming Commission, 12-17
 
Illinois gaming revenues rose 7.0% to $220.8 million. Gaming Commission, 12-17
 
Indiana gaming revenue rose 5.8% to $ $166.4 million. Gaming Commission, 12-17
 
Iowa casino revenues rose 3.9% to $117.2 million. Gaming Commission, 12-17
 
Kansas gaming revenue rose 12.5% to $32.2 million. Gaming Commission, 12-17
 
Louisiana gaming revenue fell 1.4% to $243.6 million. Gaming Commission, 12-17
 
Maine gaming revenue rose 12.3% to $10.9 million. Gaming Commission, 12-17
 
Maryland gaming revenue rose 41.9.5% to $130.5 million. Baltimore Sun, 12-5-17
 
Massachusetts gaming revenue rose 5.7% to $12.9 million. Gaming Commission, 12-17
 
Mississippi gaming revenues rose 4.1% to $162.0 million. Gaming Commission, 12-17
 
Missouri gaming revenues rose 3% to $137.9 million. Gaming Commission, 12-17
 
Nevada gaming revenue fell 2.3% to $909.0 million. Gaming Commission, 12-17
 
New York VLT revenue rose 21.1% to $188.0 million. Gaming Commission, 12-17
 
Ohio gaming revenues rose 7.9% to $142.3 million. Gaming Commission, 12-17
 
Pennsylvania gaming revenue rose 1.57% to $253.5 million. Gaming Commission, 12-17
 
Rhode Island gaming revenue fell 2.1% to $37.1 million. Gaming Commission, 12-17
 
South Dakota gaming revenue rose 1.6% to $25.0 million. Gaming/Lottery Commission, 12-17
 
Total gaming revenue rose 3.86% to $3.2225 billion. David Rohn, 12-29-17
 
Total gaming revenue year-to-date rose 3.72% to $37.757 billion. David Rohn, 12-29-17
 
The Other categories:
 
Connecticut slot win rose 3.2% to $85.8 million. New London Day, 12-16-17
 
Macau gaming revenue rose 22.6% to $2.8 billion. Reuters, 12-1-17
 
National horse racing handle rose 6.39% to $890.8 million. Blood-Horse News, 12-7-17
 
Dow Jones Industrial rose 2.79% to 24030.90. Yahoo Finance, 11-30-17
 
Adams Gaming Index* rose 16% to 4560.79. CDC Newsroom, 12-1-17
 
*Much of the Adams Index increase is a reflection of an error in calculations: for the last few months Isle of Capri was included in the Index, even though it ceased trading in May. This month Eldorado Resorts has replaced Isle in the Index, as was the case for the NASDAQ. The Adams Index now consists of Boyd Gaming, International Game Technology, Eldorado Resorts, Las Vegas Sands, MGM Resorts International, Penn National Gaming, Pinnacle Entertainment, Scientific Games, Wynn Resorts, and Wal-Mart.
More than just Hot Air! 

New Jersey and Atlantic City continued to show positive results in November, with 2017 being the best year the city has had in ten years. The upward trend has been driven by the double-digit growth of online gaming. In November, Internet gaming was up 20 percent to $20.6 million; casino revenue was up 4.6 percent to $206.4 million. The casino growth is particularly impressive because two of the properties, Bally and Harrah's, were down significantly. The remaining five casinos had a very strong month, with Resorts up 18.6 percent and Golden Nugget up 15.2 percent. Borgata, which has a 30 percent market share in the city, was up 5.7 percent to $64 million; its change is extremely important to the city's figures as a whole.
 
Although the economy contributed to gaming's growth in November, the old story-line - expansion - was still relevant. The first category of expanded capacity has been with casinos, with Maryland, New York, and Kansas having more casinos in November 2017 than in 2016. In Maryland and New York the new casinos drove very large increases in revenue in November, as they have all year.
 
Maryland's casino revenue was up 41.9 percent as a result of $50.6 million generated by MGM National Harbor. Once again Maryland Live and Horseshoe Baltimore paid the price, with declining revenues: Maryland Live was down 13.5 percent to $43 million, and the Horseshoe was down 20 percent to $22.7 million. The total drop for the five previously-existing casinos was 13.1 percent. MGM opened in December 2016, so beginning in January 2018 the year-over-year comparisons will be even more interesting.
 
New York's combined casino and VLT revenue was up 21.1 percent, it has three new casinos, which together generated $29 million in gaming win. The casinos accounted for the majority of the increase, however, VLTs were up 2.4 percent to $159 million. There were 19,094 units in New York in November, up from 18,144 a year earlier.
 
Casino revenue in Kansas increased 12 percent, the lion's share of that coming from Kansas Crossing. That's the state's new casino, reporting $2.4 million in gaming win for the month.
 
The second category of expanded capacity in 2017 has been VLTs, with Illinois and South Dakota the two states with increases. For 2017, their VLTs have reported an increase in overall revenue as a result of those added units.
 
The numbers in South Dakota are very small. Because of the state's remote location and unique casino environment it is insignificant in the national picture.
 
Illinois, on the other hand, is very significant in the national narrative. It is significant because other states are looking at it as a model for potential expansion and because the numbers themselves are large. The number of VLTs in Illinois grew by 12.3 percent to 27,787 in November, generating $112.4 million in win, an increase of 18 percent compared to a year earlier. November was also the first month that the revenue generated by the VLTs exceeded casino revenue in Illinois; the casinos had $108.6 million in November, a decrease of 2.3 percent.
 
In Ohio both the racinos and the casinos reported increases. The four casinos were up 6.9 percent to $66.4 million, lead by Jacks Cleveland with $16.9 million. Ohio's seven racinos had $75.9 million in win, up 8.9 percent. Two racinos outperformed Jacks: Hard Rock with $18.7 million and Hollywood Columbus with $17.5 million.
 
In Mississippi the narrative continues to be one of two separate storylines. The weather was better in November and the Coastal casinos reported an 8 percent increase to $95.1 million. The river county casinos continue to experience competition-related decreases; in November they were down 1.1 percent to $66.7 million.
 
Louisiana was one of the states with less revenue for the month. Its riverboat casinos were still feeling the impact of the hurricane season, were down 2.2 percent in November. Land-based Harrah's New Orleans was up 7.1 percent. VLTs in truck stops and at the race track had essentially the same revenue as last year.
 
Rhode Island, another of states with declining results (down 2.1 percent), is much like an endangered species on an island. The state's gaming industry is so small that external competition is particularly harmful and threatening in the long-term. With the industry growing nationwide, even a 2.1 percent decrease in the state is significant, an indication of an uncertain future.
 
The third state with less revenue in November was Nevada. As is always the case, the explanation can be found on the Strip, in the casino pits. Baccarat was down 25 percent to $63.2 million and blackjack was down 14.5 percent, a drop of $10.7 million. In addition to the decline in table games, sports was down almost 75 percent, a drop of $7.9 million. In a characteristic statement, Michael Lawton of the state Control Board said, "If you factor out the Strip, the state would have been up." The decline on the Strip was not just in the games, however. Visitations were down by 3.7 percent, year-to-date; 600,000 fewer people visited Las Vegas in 2017, through November, compared to 2016.
 
The rest of Southern Nevada had a much better month: downtown Vegas was up 6.8 percent, North Vegas 2.5 percent, Laughlin 4.9 percent, and Boulder Strip 0.08 percent. In Northern Nevada, Reno dropped by a 0.08 percent and Sparks was flat. North Lake Tahoe revenue grew by 18.9 percent; in the rest of Washoe County, revenue was up 21.48 percent. South Lake Tahoe win fell 2.92 percent, in Elko County it was up 11.84 percent, and Carson Valley area revenue increased 10.83 percent.
 
In the other categories, Macau continues to grow after the steep decline caused by the crackdown on corruption by China that started in 2015.

A side story worth mentioning involves racing: racing handle for November was up 6.39 percent to $890.8 million. The interesting aspect is the reason cited by Blood-Horse News for the increase - that it was due to a change in federal law that raised the minimum level for reporting and withholding on gaming wins. That's a familiar argument, one used by many in the casino industry over the years when trying to get the IRS to be more generous in its reporting and withholding requirements. In a different form, it is an argument we can expect to hear more in 2018 as casinos seek lower taxation in highly competitive jurisdictions.
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