Nevada casinos’ 34-month streak of $1 billion win ‘the new normal’
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In pre-pandemic times, months when Nevada's casinos took in more than $1 billion in gaming win were considered outstanding.
However, after hitting $1 billion in gaming win for 34 consecutive months, that threshold has become "the new normal," Mike Lawson, the Nevada Gaming Control Board's senior economic analyst, said recently on Nevada Newsmakers.
"Yes, it is the new normal," Lawton told host Sam Shad. "You know, 34 months in a row is quite a streak. In the last 12 months, or the calendar year 2023, we averaged $1.3 billion (a month) in gaming win. So if we were going to all-of-a-sudden miss $1 billion, we'd have to fall off by 23 percent."
Lawton doesn't see the $1 billion monthly gaming win streak ending soon.
"No one's telling us, 'Stop. Hey, look, we see it. We're seeing some softness. We're seeing a slowdown on the horizon,’” Lawton said.
"We're not hearing that," Lawton continued. "So, yeah, it seems like it's the new normal for sure."
December 2023 was the last month recorded in the streak.
"I looked back and I said, pre-pandemic how many times has the state done $1 billion? And it's 49, historically," Lawton said. "So we've done 34. We might end up being at a place where we do – you know – 49 in a row, which is going to tie the 49 in total that the state had ever done before."
The state's gaming industry has shown a steady revitalization since the pandemic of 2020 saw casinos shuttered for 78 days, leading to a 34.6 percent decline in revenue.
Yet Nevada rebounded to produce $13.4 billion in gaming revenue in 2021 and $14.8 billion in 2022.
The 2023 year brought a record $15.5 billion in gaming revenue, breaking the 2022 record by 7.4 percent.
November's Las Vegas Grand Prix – the first of an expected 10-year run for Formula One racing in Las Vegas – was the biggest contributor for the year's record gaming-win numbers, Lawton said.
Yet the December opening of the $3.7 billion Fontainebleau Las Vegas on the north end of The Strip and the September debut of the $2.3 billion Sphere were also major drivers in the gaming-win success of 2023.
"For the calendar year, obviously, I don't think you can argue that the F1 race was the signature event for the whole year," he said, later adding, "the event delivered."
The F1 race turned a traditionally slow month into a record breaker – making November 2023 the top November in state gaming history with a $1.37 billion gaming win total. It also marked Nevada's third-highest gaming-revenue month ever.
"When you look at the numbers and when you start peeling them back a little bit, November is not our greatest month for gaming," Lawton said. "When I think pre-pandemic, it (November) hit $1 billion twice and the last time pre-pandemic was 2006."
The Strip, long considered the economic engine of the state and a major source of state taxes, took in most of the profits from the race, Lawton said.
Meanwhile, some off-Strip and downtown properties said the F1 race, and the road closures it produced, hurt their businesses.
"The focus of that event was The Strip, right? And The Strip is the one that that generated all the growth," Lawton said. "If you were to exclude The Strip from those revenue totals, the state was going to be up a fraction point, 3 percent or about $1.9 million."
The F1 race was designed to attract the wealthiest of visitors, Lawton said.
"So this was a Strip event and that's what they were catering to, these luxury properties," Lawton said.
Baccarat, a card game invented in Italy in the 1500s and historically popular with French aristocracy, is a game played at The Strip mega-resorts by wealthy patrons, many of whom are foreign nationals.
The wealthy "Whales" were fond of playing baccarat during F1 week and their luck was not spectacular.
"Baccarat play was a significant driver in November," Lawton said. "Baccarat win on The Strip alone accounted for nearly 80 percent of the entire growth for the state. So it was definitely a Strip-focused event at the luxury end."
Taxes from baccarat winnings by Strip casinos helped keep Nevada's state government solvent during the Great Recession of 2007-08, according to state gaming records. The game was also a source of great profits during the week of the F1 race, Lawton said.
Baccarat win remains volatile in Nevada's system of corporate gaming. If the house loses or the "Whales" don't fly to Las Vegas, it will be difficult to match November 2023's monthly gaming-win in 2024, Lawton said.
Success in Nevada's gaming economy often is based on comparisons of the same month of the previous year.
"When you have those months where baccarat is the driver, you're going to have to turn around the following year and you're going to face that comparison," Lawton said.
"And are you going to beat it? Well, you know, it depends," he said. "It depends on a lot of things. Is the play going to be there and are you going to hold?
"So it's a volatile game," Lawton continued. "It's not like slot machines where you can kind of count on that every month. Statistically, baccarat fluctuates a little bit."
The F1 race also became a major marketing tool to attract future visitors to Las Vegas, Lawton said.
"It was the most watched race in the circuit for the calendar year," he said. "So think of the exposure that that brought to Nevada, Las Vegas, Clark County, The Strip. So that was a really eye opener for me. Not only were there all these hundreds of thousands of spectators (in Las Vegas), 59 million people watched on TV."
