April 2019
What did Punxsutawney Phil have to say?

Although Punxsutawney Phil predicted an early spring, that didn’t arrive by the end of February. And regardless of when spring does come, this winter is the wettest on record for a large part of the country. Mary Loftness, a gaming consultant, says two factors will probably depress gaming revenues in the first quarter: the extremes in weather, and changes in federal tax withholding in 2018 that will reduce tax refund checks by an estimated 17 percent.
 
The tax refund and the weather will both be part of the narrative for the next couple of months, but in February neither seemed to have a big impact, except in few isolated jurisdictions. Gaming revenues in February reached $3.522 billion, an increase of 2.96 percent over February of 2018. And for the first two months of 2019, revenue was up 2.95 percent to $6.901 billion. That’s not a bad way to begin the new year, eh?

February 2019 Casino and VLT Revenue:
 
Atlantic City gaming revenues rose 25.6% to $241.2 million. Gaming Commission, 3-19
 
Colorado casino revenue rose 1.4% to $62.3 million. Gaming Commission, 3-19
 
Delaware VLT revenue rose 1.1% $27.4 million. Gaming Commission, 3-19
 
Detroit casino revenues rose 4.1% to $114.5 million. Gaming Commission, 3-19
 
Florida VLT rose 2.9% to $48.8 million. Gaming Commission, 3-19
 
Illinois casino/VLT revenues rose 2.9% to $226.5 million. Gaming Commission, 3-19
 
Indiana gaming rose 1.5% to $207.8 million. Gaming Commission, 3-19
 
Iowa casino revenue fell 7.0% to $103.9 million. Gaming Commission, 3-19
 
Kansas gaming revenue fell 0.61% to $32.5 million. Gaming Commission, 3-19
 
Kentucky historical racing machine win rose 122.2% to $16.0 million. Gaming Commission, 3-19
 
Louisiana casino/VLT revenue fell 2.6% to $253.1 million. Gaming Commission, 3-19
 
Maine casino revenue rose 3.9% to $10.5 million. Gaming Commission, 3-19
 
Maryland gaming revenue rose 0.1% to $136.8 million. Gaming Commission, 3-19
 
Massachusetts gaming revenue rose 176% to $34.0 million. Gaming Commission, 3-19
 
Mississippi gaming revenue rose 2.5% to $175.2 million. Gaming Commission, 3-19
 
Missouri gaming revenue fell 4.0% to $134.2 million. Gaming Commission, 3-19
 
Nevada gaming revenue fell 0.62% to $1.011 billion. Gaming Commission, 3-19
 
New York casino/VLT revenue rose 5.8% to $211.9 million. Gaming Commission, 3-19
 
Ohio gaming revenue rose 5.4% to $155.0 million. Gaming Commission, 3-19
 
Pennsylvania gaming revenue rose 0.4% to $263.9 million. Gaming Commission, 3-19
 
South Dakota casino/VLT revenue rose 2.4% to $25.1 million. Gaming/lottery Commission, 3-19
 
Rhode Island gaming revenue rose 13.0% to $56.2 million. Gaming Commission, 3-19
 
Total Casino Revenue: National gaming revenue rose 2.96% to $3.522 billion. David Rohn, 4-19

The other categories:
 
Macau gaming revenue rose 4.4% to $3.13 billion. Macau Business, 3-1-19
 
Connecticut Indian casino slot win fell 7.5% to $77.7 million. Gaming Commission, 3-19
 
Dow Jones Industrial Index rose 3.5% to 25,907.77. Yahoo, 2-28-19
 
The Adams Index rose 2.3% to 595.48. CDC Gaming Reports, 2-19


Across the Country

Atlantic City: Since the Hard Rock and Ocean Resorts casinos opened and sports betting began, Atlantic City has been on a run, outperforming the nation. In February, the combined casino, sports, and internet revenue in New Jersey was up 25.6 percent to $241.2 million, and up 25.1 percent year-to-date to $470.8 million. In February, casino win was $197.7 million, up 15.7 percent; internet gaming win was $31.7 million, up 44.4 percent; and sports betting revenue was $12.7 million. For Hard Rock and Ocean Resorts, both open for less than a year, the combined win was $37.7 million, including sports and online gambling. Four other properties reported an increase: Caesars,10.7 percent; Golden Nugget, 5.8 percent; and Resorts, 24.5 percent. The bad news is that Bally’s, Borgata, and Tropicana reported decreases. Still, with only three properties reporting a decrease, February was the best overall month for the casinos since Hard Rock and Ocean Resorts opened.
 
Maryland: Maryland is one of the top four states in terms of growth over the past year. (New Jersey, New York, and Massachusetts are the other three.) However, its growth has slowed: gaming revenue in Maryland was only up a tenth of one percent in February, which is hardly anything. MGM National Harbor opened in December 2016 and appears to be peaking, reporting an increase of just 1.5 percent to $53.3 million. Then, in descending order of size: Live! was down 2.0 percent to $46.0 million; Horseshoe Baltimore was down 3.6 percent to $20.6 million; Ocean Downs, which has added table games in the past year, was up 15.5 percent; Hollywood Perryville was up 2.6 percent; and Rocky Gap was up 3.8 percent.
 
New York: The combined VLT and casino revenue in New York rose 5.8 percent. The media is full of stories of how the casinos are underperforming, but all four were up compared to last year. Total casino revenue was up 13.6 percent, although there were 120 fewer slot machines than in February 2018. VLT win was up 3.9 percent from 18,404 VLTs, 550 fewer than last year. The reduction of slot machines is a trend which is accelerating as the market adjusts to new levels of competition and consumer demand.
 
Massachusetts: The casinos in Massachusetts reported the largest percentage increase of any state, because there are now two casinos, compared to only one last year. MGM Springfield, a full casino with table games and slot machines, opened in August; in February, it reported $21.5 million in win ($14.5 million from slots and $6.9 million from table games). Plainridge Park has slot machines, but no table games; it reported $12.5 million in win for the slots, down 9.4 percent from February 2018. The attention in Massachusetts is now focused on the license for Wynn Resorts. If the state gaming commission grants that license, Massachusetts will have three operating casinos this summer.
 
Pennsylvania: Total gaming revenue was up a small fraction, 0.4 percent, with slot revenue up 0.49 percent to $189.0 million. Five casinos reported less slot revenue in February 2019, while seven had more. Statewide table game revenue rose 0.3 percent to $73.4 million, with four casinos having decreases and the other eight having increases. The Sands Bethlehem has suffered the most from the new casinos in New York, but in February its total revenue was only down $100,000 from $42.8 million last year. The state’s busiest casino, Parx, was up $100,000 to $48.6 million. Casino sports betting in Pennsylvania generated $1.9 million in revenue; fantasy sports was at $1.6 million. Sports betting should get a big boost from March Madness; then the baseball season begins. Baseball is not the best sport for betting, but with Bryce Harper now playing for Philadelphia, baseball might just be good for the books in Pennsylvania.
 
Ohio: Combined VLT and casino revenue in Ohio was up 5.4 percent. Casino win from the four casinos was up 3.4 percent to $69.9 million, with VLT revenue from the seven racinos up 6.9 percent to $84.9 million. The VLT increase was in part weather-related: in February 2018, Belterra Park was closed for nine days due to weather, while this year it was only closed for two days. Overall, the numbers show two trends. First, casinos are slowly reducing the number of table games and slot machine, with tables down by ten games to 401, and slots down 17 games to 7289. Second, racinos are increasing the number of slot machines: in February there were 11,377 VLTs, while last year there were 11,268.
 
Indiana: February was a good month for Indiana gaming, with revenue from the 13 casinos was up 1.2 percent to $168.3 million, and VLT revenue from the two racinos up 3.1 percent to $39.5 million. However, the casinos continue to struggle to adjust to competition from casinos in Ohio and VLTs in Illinois. Casinos are reducing the number of slot machines: in February there were 18,093 slots, down 695 units from a year earlier.
 
Illinois: The state’s ten casinos are also trying to adjust to the VLTs in that state. In February, casino win fell 6.6 percent to $97.5 million, with admissions down 5.2 percent to 747,476. The casinos have taken 297 slots off the floor since last year and now have 9661; by contrast, table games are essentially unchanged. For VLTs, the win was up 11.5 percent to $129.0 million. There were 6842 establishments in Illinois with VLTs in February, 447 more than in 2018, and the number of VLTs increased 8.9 percent to 31,110 units.
 
Louisiana: The total combined gaming revenue from riverboats, Harrah’s New Orleans, slots at the tracks, and VLTs was down 2.6 percent. Win from the riverboats was down 4.8 percent to $149.7 million; Harrah’s New Orleans was down 5.0 percent to $22.4 million; slots at the tracks were up 1.7 percent to $29.4 million; and VLT win was up 3.2 percent to $51.6 million, with an increase of 111 units. Admissions at the casinos and racetracks fell 6.3 percent to 2,289,221. The press in Louisiana is speculating that sports betting in Mississippi is having an impact; that may well be a factor.
 
Mississippi: Sports betting in Mississippi might have drawn some people from Louisiana casinos to Mississippi, but total sports revenue was not huge. Bettors in Mississippi casinos wagered $3.9 million on sporting events, with the win at $790K. The casinos in Mississippi did have a good month, however. The three jurisdictions each reported an increase: the Central region was up 3.1 percent to $20.0 million; the North region was up 0.8 percent to $48.6 percent, and the win for casinos on the Gulf Coast increased 3.3 percent to $100.5 million. The North region is Tunica, the most challenged region in state. That is set to get worse as two casinos have opened in Arkansas. One of them is in West Memphis, and the Memphis area is Tunica’s primary feeder market. The impact will not be seen until the April numbers are released, but it is certain to be significant.
 
Missouri: The Missouri Gaming Commission divides the state into three markets: Kansas City, St. Louis, and Out State. The Kansas City market has four casinos; in February their win was down 4.1 percent to $44.8 million, with admissions down 5.1 percent. The St. Louis market has four casinos; their win was down 2.8 percent to $69.1 million, and admissions fell 10.5 percent. The Out State market has five casinos, which reported $20 million in win. Statewide, casino win was down 4 percent, admissions fell by 9 percent to 2,886,103, and patrons declined 6.8 percent to 1,501,200. In what might seem to be good news, the win per patron was up 3.0 percent to $89.45 and the win per admission increased by 5.2 percent. But fewer customers spending more is not a good long-term strategy.
 
Rhode Island: The state also has sports betting, with Twin River and Tiverton together booking $20.6 million in February, but losing $890K. The most important factor in Rhode Island continues to be the move of the Newport Grand to Tiverton. Table game win went up 23.5 percent to $2.1 million and slot win jumped 177 percent to $7.6 million. At Twin River, win from tables was up 31.8 percent to $12.0 million, but slot revenue fell 1.7 percent to $34.5 million.
 
Nevada: The state has the most casinos and the highest gaming revenue in the country. Year-to-date, Nevada has generated 28.9 percent of the total U.S. gaming revenue. Without Nevada the national win in February was up 4.48% to $2.511 billion; with Nevada, the national increase was only 2.96%. In February, slot win for all of Nevada was $608.3 million, up 0.47 percent, and table games win was $403,2 million, down 2.1 percent, due to baccarat. And finally, poker was up 3.6 percent to $9.3 million.
 
Within Nevada, the narrative revolves around one jurisdiction, the Las Vegas Strip, and the Strip narrative is determined by table game win, particularly baccarat. For the month, the Strip was down 1.95 percent to $591.7 million and baccarat was off 25.5 percent to $132.1 million. Michael Lawton, an analyst for the state, said if baccarat had held up and the weather had been better in the north, especially at Lake Tahoe, everything would have been fine. But Tahoe is such a small percentage of the revenue it doesn’t really affect the big picture. North Lake Tahoe casinos had a whopping 24.74 percent decrease to $1.4 million and casinos on the south side of the lake witnessed a 26.64 percent decline to $14.5 million, for a combined win of $15.9 million. Bu comparison, baccarat was off $45 million. The Strip had 58.5 percent of the state’s gaming win and baccarat was 22.3 percent of the Strip’s win.
 
Downtown Vegas fared much better than the Strip, with revenue up 9 percent to $58 million. Most of the other metrics for Las Vegas were good. Visitor volume was up 1.9 percent to 3.19 million, occupied rooms were up 3 percent to 3.6 million, the occupancy rate was up 1.7 percent to 87 percent, the average daily rate was up 8.7 percent to $130.06, and convention business was up 8.5 percent. Statewide, the sports handle was $458.6 million, a record and the win was $35.8 million, up 235 percent, with the Super Bowl contributing $10.8 million to the total win.
 
In the rest of Nevada, the results were mixed. The Boulder Strip was down 0.43 percent to $$65.0 million, and Laughlin was off 0.68 percent to $44.8 million. Casinos in the Carson City area saw their gaming revenue decline by 5.8 percent to $7.5 million. Churchill County was off 4.6 percent to $1.5 million; Elko was down 0.33 percent to $23.5 million; Wendover was up 1.48 percent to $16.5 million; Winnemucca was down 12.6 percent to $1.4 million; Lyon Country was up 2.0 percent to $3.8 million; and Washoe County, which includes Reno and Sparks, reported $60.5 million in revenue, down 6.5 percent.
 
Overall, February was a good month. Even though it was the wettest February on record, revenues were up nationally by 2.5 percent. With more normal weather in March, that should be a good month as well. For April, Arkansas will be reporting revenue from the two new casinos that opened on April 1. In June, Massachusetts might or might not have another casino, when the Wynn Resorts’ Encore is scheduled to open near Boston, assuming that it receives a license. For the rest of the country, the established properties will continue to adjust to increased competition and reduced customer demand.
This report is written by Ken Adams