The state-wide 23 percent decline year-on-year in baccarat win in Nevada casinos in July is part of a recent “pattern” relating in part to easing of Chinese demand, a Union Gaming Group LLC analyst told GGRAsia.
‘Win’ – a measurement defined by the University of Nevada, Las Vegas as the money taken in by casinos minus the total amount paid to players for winning wagers – fell 23.1 percent year-on-year in July for the baccarat segment, to approximately US$104.08 million state-wide. In the three months from May to July inclusive, aggregate baccarat win in Nevada dipped 38.2 percent year-on-year to just under US$272.36 million, show data released on Friday by the Nevada Gaming Control Board.
“The July trends are a continuation of the pattern seen for a while. In its second quarter earnings call, MGM Resorts [International] specifically pointed to weakness in Chinese demand,” Grant Govertsen of Union Gaming Group told GGRAsia on Monday.
Las Vegas Strip baccarat win was down 20.8 percent year-on-year in July, while the total amount wagered on baccarat during July was down about 35 percent from a year earlier, showed Friday’s data. Aggregate ‘win’ revenue on the Strip declined 2.1 percent year-on-year to US$525 million.
“We note that baccarat comps [comparisons] get easier in the fall [autumn],” noted Cameron McKnight of Wells Fargo Securities LLC in a note on Friday. “In our view, the weakness in [Las Vegas] Strip baccarat play is partly related to the anti-corruption initiative in China and the monitoring of Chinese visitors in Las Vegas,” added Mr McKnight.
During MGM Resorts’ second quarter earnings call on August 4, Dan D’Arrigo, the firm’s chief financial officer, said the casino operator was seeing “continued weakness in the China-sourced play”.
“That’s offset by some other pickup in other Asian markets that we’re seeing, not offsetting them entirely, but we are seeing a pickup in some other markets in Asia,” added the executive.
State-wide in Nevada in July, slot machine win rose 5.5 percent year-on-year to nearly US$600.34 million. The Nevada Gaming Control Board said casinos state-wide collected revenue of US$922.9 million in July, down 1 percent from the same month last year.
At Global Gaming Expo (G2E) Asia in Macau in May, William Scott, executive vice president of corporate strategy and special counsel at MGM Resorts International – 51-percent owner of Macau casino operator MGM China Holdings Ltd – said that 80 percent of the firm’s VIP gambling revenues in Las Vegas came from Chinese customers.
A paper in May by Morgan Stanley Research Ltd suggested Las Vegas was more dependent on regular and current Macau gamblers than investors and the market had understood.
