The Gaming Control Board released the February gaming numbers this morning, and at first blush the numbers looked catastrophic. Baccarat win down 41 percent. Total casino win down 20 percent. It seemed as if the specter of a double dip recession wasn’t quite dispatched with several months of improving results.
But a look at the calendar made the numbers a little easier to understand. Last year, Chinese New Year fell squarely in the month (February 10), while this year it fell on January 31, so much of the Asian high rolling play that’s buoyed the Strip happened in January. Also, in February 2013, casinos got unusually lucky at baccarat, holding 16.6 percent of all money wagered. This February, things returned to a more typical 12.9 percent hold.
So a combination of the calendar and the quirks of fate made this February’s high rolling play pale in comparison to last February’s. Once, that would have been a blip on the radar, but with the increasing focus on baccarat, this combination of stats and scheduling made the comparison to last year a sad one.
I’m not suggesting the results aren’t significant: They are. They demonstrate how important high-end play has become not just to the Strip casinos that specialize in it, but to the state as a whole. This is a tale I’ve been telling for a while now, but only because it’s true, and because it has profound implications. The mass market for Nevada gambling, I argue, never really recovered from the recession, and the industry is being kept afloat primarily by international high end play.
What should keep us up at night is that the pipeline of international (chiefly Asian) high end play is as delicate as it is lucrative.
It’s not that the casinos invested so heavily in courting this play have made bad decisions: they’ve made the only logical choice in pursuing the only group in the world that, seemingly, has both discretionary income and the desire to spend it gambling. The problem is that, if anything disrupts the pipeline of players—and there are many things that could, ranging from pandemics to air travel disruptions to tighter high roller financial reporting requirements—the industry itself would be threatened. Absent a healthy, growing base of mass market players, Nevada’s casino industry will live or die by the desire and ability of international millionaires to gamble here.
Of course, if anyone has an idea for figuring out how to get domestic visitors—who seem to have both less pocket change and confidence in the future than they did before the recession—to gamble more, more than one casino would be happy to listen.
The other item of interest is that in this month, for the first time, the GCB broke out interactive (online) poker as its own line item. We now know that, last month, Nevada’s three online sites earned a combined $824,000—about 9 percent of total poker revenue. Absent that play, Nevada poker would have continued its decline, but with it, poker earned the state’s casinos slightly more revenue than last year.
David G. Schwartz is the director of UNLV’s Center for Gaming Research.