Las Vegas casinos look to ride hot streak into 2024
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Las Vegas Strip casinos begin the new year on a hot streak after the F1 Formula race on the Las Vegas Strip in November provided a significant boost to the region and new openings in December created strong buzz.
Las Vegas Strip gross gaming revenue jumped 22.6% year-over-year to $821M, which was the highest ever for the typically slow month and also the second highest monthly GGR tally ever. As anticipated, the incremental play tied to the F1 race came primarily on the table games side, with table win surging 61.9% year-over-year to $410.1M on a 39.8% increase in table drop. The Vegas Strip table hold of ~15% in November was mostly in line with the long-term average, but about 200 points above a relatively unlucky November 2022, noted CBRE Equity Research analyst John DeCree. He highlighted that the mix of GGR win was impacted by the novelty of the F1 race. Notably, baccarat win increased 208.7% year-over-year at Strip properties to $178.3M on a 90.1% increase in volume. Meanwhile, slot win slipped 1.3% to $410.9M during the month. "Overall, F1 drove strong high-end table game play, which likely benefited the upper tier Strip properties the most," observed DeCree.
Overall visitation to Las Vegas increased a modest 0.8% year-over-year in November, but F1 and other high-profile events helped boost Strip RevPAR by 37.1% during the month. Analysts think that the inclusion of Las Vegas on the F1 calendar could be an annual boost to November GGR for casino operators.
Looking ahead, the December report on Nevada gross gaming revenue win will include the debuts of Red Rock Resorts' (NASDAQ:RRR) new Durango Casino & Resort and the high-profile Fontainebleau resort on the Las Vegas Strip. The 67-story Fountainebleau luxury resort and casino is reported to be the tallest occupiable building in Nevada and includes 3,644 rooms and suites, a 14,000-square-foot fitness center, a 55,000-square-foot spa, 1,300 slot machines, 128 gambling tables, a 96,500-square-foot luxury retail area, and a six-acre pool setup. In January, convention traffic will spike when the Consumer Electronics Show returns to its pre-pandemic form and popular residencies on the Strip include U2, Luke Bryan, Kylie Minogue, and Adele. Las Vegas will be the center of the sports world in early February when the Super Bowl is played on the Strip.
The big picture: Nevada casinos as a whole are riding a hot steak, with 33 straight months of statewide gaming revenue of at least $1 billion in the books. Some of the companies seen benefiting from the expected 2024 environment of lower interest rates, strong revenue/tourism trends, and improved balance sheets include Light & Wonder (LNW), Golden Entertainment (GDEN), Caesars Entertainment (NASDAQ:CZR), MGM Resorts (NYSE:MGM), Boyd Gaming (BYD), Golden Entertainment (GDEN), Wynn Resorts (WYNN), VICI Properties (VICI), Full House Resorts (FLL), Bally's Corporation (BALY), and Red Rock Resorts (RRR).
