Nevada On Six-Month Hot Streak With $1 Billion-Plus In Gambling Revenue
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Las Vegas’ luck has not yet run out.
Nevada collected $625.7 million in gambling revenue from casinos on the Las Vegas Strip in August, which is up 20% from pre-pandemic levels in August 2019, according to numbers released Thursday by the Nevada Gaming Control Board. Sin City’s revenue increase over the same month in 2019 is another sign that Vegas is continuing its recovery from the Covid-19 recession.
“I think we’re still in that trajectory of growth,” says Michael Lawton, a senior research analyst for the Nevada Gaming Control Board. “I’m not going to guarantee a $1 billion again, but the blueprint is there to continue.”
Strip revenue in August is down from July’s record-setting month. Nevada collected $794 million in gambling revenue from casinos on The Strip in July, which marked the highest all-time win total for the state. July posted a 46% increase compared to pre-pandemic revenue in July 2019.
Lawton says July was a unique month and he doesn’t read too much into the dip in Strip revenue in August. July was a “monster baccarat month” with $160 million in revenue from the card game, compared with $93 million in August. Also, July had five full weekends compared with August, which had four. “Weekend business is much stronger that mid-weed,” he says.
Brendan Bussmann,partner and director of government affairs with Global Market Advisors, says the dip from July to August is not concerning.
“There's going to be ups and downs as we continue to recover,” says Bussmann. “The only two words over the last 18 months that have been consistent, are ‘unprecedented’ and ‘uncertain.’ There's going to be bumps in the road to recovery.”
Year-to-date, revenue from Strip casinos is inching closer to pre-pandemic levels. From January through August of 2021, revenues from The Strip hit $4.327 billion compared to $4.356 billion during the same time in 2019, only a 0.67% decrease from pre-pandemic levels.
“The Strip is almost even,” says Lawton. “I think we’ll beat 2019, especially the way things are going.”
Statewide, the recovery is stronger as August marks thesixthconsecutivebillion-dollar month. Nevada collected $1.165 billion in revenue from casinos across the Silver State, according to the Gaming Control Board. The state’s win in August is up 22.3% compared to pre-pandemic revenue the same month in 2019. Calendar year to date, gambling revenue is up 7.8% from the same time in 2019.
The half year of record-breaking gaming revenue is positive, but it does not signal a faster recovery for Vegas. After July’s record-breaking numbers, Colin Mansfield, an analyst from Fitch Ratings, said the recovery timeline has not changed and Fitch is still predicting a full Vegas recovery in 2023. In a note published on Thursday, Macquarie Research referred to the outlook for Las Vegas as “positive.”
“We still support our view that Las Vegas Strip revenues can return to prior peak in 2022,” Macquarie’s note reads.
The delta variant has a lot to do with the dip in revenue from July to August. Visitation decreased 9.2% in August from 3.3 million people in July, according to the latest report published by the Las Vegas Convention and Visitor Authority. Visitation is still not above pre-pandemic levels as the number of visitors last month is down 16.2% from August 2019
“With the delta variant of the Covid-19 virus spiking during the month, August visitation receded from the pandemic‐era peak in July,” the LVCVA wrote in its report.
In July, the number of people who visited Las Vegas was up 130% compared to July 2020 and down only 10.4% from July 2019.
Lawton admits that there might be trouble on the horizon.
“We’re starting to see concerns and challenges—the delta variant, the mask mandate, flight demand is softening,” he says.
But Bussmann says there is still plenty of growth left for Vegas in 2021. The ban on international travel is set to lift in November, which he believes will help.
“We still have two great tranches of opportunity: the return of the business customer and international customer,” says Bussmann.
The sixth-month streak of over $1 billion in gaming revenue is the second-longest of all time for the state. The record is eight months, which was recorded from November 2006 to May 2007.
“The record was before the great recession, when there was a lot of money floating around that didn’t seem very realistic,” he says.
When asked if he thinks the same thing is happening now, he admits the federal stimulus has bloated the numbers, but he thinks consumer demand has outpaced the effect of the stimulus.
“One thing that gives you comfort is the strength of the demand—it’s not all inflated by artificial reasons,” says Lawton.
