Springtime Blues for Gaming

On May 10, the Gaming Control Board released the Nevada gaming numbers for March. They contained a bit of a surprise. The previous five months had seen gains for the entire state, driven by a slowly recovering Las Vegas Strip. But March saw a dramatic fall-off in gaming win for both the Strip and the state, which declined 15 percent and 11 percent, respectively. What gives?

There are three issues behind the Strip’s sudden fall off the recovery wagon:

1.  The Friday effect: This refers to the distortion in slot win that happens whenever the month ends on a weekend. Casino operators put off collecting the contents of bill validators until the weekend is over. Because handle is reported electronically, the usual tipoff for a Friday effect is an unusually low slot hold percentage. March fit the bill, since it ended on a Saturday night, and the statewide slot hold was 6.55 percent, a 4 percent decline from February’s total. This likely depressed the slot win numbers by perhaps as much as 5 percent.

That still wouldn’t have made March a winner for Nevada (total slot play fell by 7 percent), but it did make a bad month worse. It’s worth nothing that slot handle—the amount actually gambled—rose slightly in March, so there is at least a silver lining to the slot gloom.

2. Baccarat woes: Baccarat players gambled less money and they won (proportionally) more in March 2012. In other words, the casinos were (taken together) unlucky in not getting enough action in the month, and unlucky at the tables. Baccarat hold on the Strip fell from 12 percent in March 2011 (about its historical average) to 8 percent, a decrease of nearly one-third. But the total amount played fell from $709 million to $494 million, so even if
they’d have had average luck, casinos still wouldn’t have broken any baccarat records.

3. Other table games: Despite a 32 percent jump in sports book win, table games apparently didn’t get much spillover from March Madness visitors. In addition to baccarat’s decline, blackjack, craps, and roulette all slumped in March. On the Strip, non-baccarat table game win fell 11 percent. While lower hold percentages for blackjack and roulette exacerbated the decline, table handle fell by about 6 percent, so there was a definite drop in play, in addition to volatility issues.

For some of the numbers behind this post, see Nevada Gaming Statistics: March Comparison  and Nevada Gaming Statistics: The Last Six Months.