GGRAsia – Las Vegas Strip revenue down on baccarat slump

Las Vegas Strip revenue down on baccarat slump

Nov 27, 2014 Newsdesk Latest News, Top of the deck, World

Las Vegas Strip gaming revenue fell by 5.6 percent year-on-year in October to US$520 million, mainly due to a drop in baccarat win (i.e. the amount staked minus prizes paid), show data from the Nevada Gaming Control Board published on Wednesday.

Baccarat win on the Las Vegas Strip fell by 35.5 percent year-on-year to US$97.3 million in October, according to official figures. For the three months to October 30, baccarat win fell 24.9 percent year-on-year to US$345.3 million.

In July, Union Gaming Research LLC linked some of June’s 155-percent year-on-year rise in the Strip’s baccarat win with channel checks suggesting a rise in Chinese visitors to the Nevada gambling hub.

Baccarat is the table game of choice for Chinese and many other East Asian gamblers. There were 311 baccarat tables on the Strip as of October 30.

“Removing the impact of baccarat and slot hold, we estimate normalised revenues were -1 percent year-on-year,” said Cameron McKnight of Wells Fargo Securities LLC.

“Baccarat volumes were 15 percent year-on-year while core mass table (excluding baccarat) volumes were 4 percent year-on-year and slot volumes were +4 percent,” Mr McKnight said in a note on Wednesday. “The strength in slot volumes, a key indicator of the mass market, is positive; however, the continued decline in table volumes is notable,” he added.

Statewide in Nevada, gaming licensees reported total gaming win of US$913.6 million in October, down by 4.3 percent from a year earlier, said the Nevada Gaming Control Board.

Brent Pirosch, an analyst with CBRE in Las Vegas, told Bloomberg News that the fall in baccarat win suggests the drop in spending by Chinese high-rollers seen in Macau has spilled over to the United States.

In Macau, market-wide gross revenue for VIP baccarat dropped by 4.1 percent year-on-year in the first nine months of 2014 to MOP166.5 billion (US$20.8 billion). The figure is from data issued by the Macau regulator.

Gaming analysts have attributed the market-wide decline in Macau to a range of factors, including the ongoing anti-corruption campaign in mainland China and a significant drop in credit volumes by Chinese banks.

Other markets, such as Singapore, have also seen declines in baccarat play. Corruption investigations by the mainland government against high ranking Chinese officials and businesspeople, plus the sluggish mainland economy have had a negative effect on many casinos’ VIP business.

“It’s a global VIP problem,” Mr Pirosch told Bloomberg. “It really only takes a few guys not playing, less than 100 folks, really driving that high-end play.”