Nevada Records Another $1 Billion Month, But Las Vegas Plods Through A Cautious Recovery
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Nevada recorded $3.462 billion in revenue from its casinos during the second quarter of 2021, making it the largest quarterly gaming win in the Silver State’s history—a signal that the gambling industry is in recovery mode.
According to the Nevada Gaming Control Board, the state collected $1.2 billion in gambling revenue in June, the fourthconsecutivebillion-dollar month and a 14.6% increase over June 2019.
“If you would have told me in March that this was going to happen, I would have said, ‘Yeah, right—there's no way,’” says Michael Lawton, a senior research analyst for the Nevada Gaming Control Board. “But each month, the gaming numbers are so strong.”
Every market increased over pre-pandemic levels in June 2019, except for the Las Vegas Strip, which is down 1% compared to the same month. Downtown Las Vegas, a strong local’s market, hit its highest win total of all time with $79.1 million, a 51.5% increase versus June 2019.
Statewide, revenue from slot machines reached the highest total in state history. In June, the state collected $868.1 million in cash from slots, up 36.4% from June 2019. Slots on the Strip also collected an all-time record level of revenue in a month at $376.8 million, almost a 35% increase from June 2019.
While the Strip still needs convention business and international travel for a full recovery, American gamblers are spending enough money in Sin City to keep things afloat. Revenue from casinos on the Strip for second quarter of 2021 is the third highest of all time at $1.79 billion. The quarter is up 8.3% compared with the same quarter in 2019. But year to date, the Strip is down 11% compared to the same time in June 2019, which means the tourist-dependent Strip still needs time to recover.
“The Strip was down compared with June 2019, but it had an incredibly strong comeback for the quarter—the third best quarter for the strip all time,” says Lawton. “It's definitely trending in the right direction.”
Analysts agree—the Strip is making a faster comeback from the dog days of the pandemic, when casinos were closed for more than two months. According to a report published by Fitch Ratings in early July, the Las Vegas Strip will fully recover in 2023, a full year earlier than the firm had previously anticipated.
“This is driven primarily by a strong level of pent-up demand for domestic leisure gaming,” reads the Fitch report. “Our revised assumptions consider the potential for renewed pandemic restrictions amid slowing domestic vaccinations and uncertainty regarding virus variants….”
But the flurry of demand, driven by the fact that Americans are ready to let lose and feel confident thanks to federal stimulus money, might not last. The Delta variant has driven an increase in infections and Nevada reinstated its mask mandates across most casinos for all employees and guests. The uncertainty of the future—will there be another economic shutdown, or other restrictions—leave analysts cautious.
“These are uncertain and unprecedented times, and until we're out of it, those are the two words that we can only depend on,” says Brendan Bussmann,partner and director of government affairs with global market advisors. “The fact of the matter is, we're still early on in our recovery. Right now we're probably in the first quarter and with the mask mandate and we just got penalized on first down and we've got to figure out how to keep plugging away.”
The reinstatement of the mask mandate, which was dropped in mid-May, has casino operators on the defense to protect their slow recovery. Casinos were allowed to return to 100% capacity in May. In a letter to employees, MGM Resorts CEO Bill Hornbuckle urged everyone to get vaccinated while criticizing the state’s mask policy.
“This is another disheartening step backward, when we should be focusing on continuing our recovery,” wrote Hornbuckle. “In addition to the heart-wrenching thought of more illness and death, I fear that progressively more restrictive measures, including a return to social distancing and capacity restrictions, could be around the corner if we continue on this path. This would be a significant blow to our community, industry and economy.”
Bussmann says so long as there’s not another shutdown, he expects Vegas will “continue to ride the wave.”
“I think the biggest thing that people need to focus on at this point is sustainability,” Bussmann adds, “we've seen the pop and now it's a matter of keeping these consumers coming back.”
For Lawton, he believes July, once the numbers are in, will be just as strong as June thanks to the new Resorts World casino opening up and blockbuster, sold out events like the Colin McGregor fight and concerts like Bruno Mars and Garth Brooks. But Covid-19 variants could spell trouble for Sin City.
“I think July will probably look like what we've seen the past four months, it's just going forward after that, with the mask mandate and what we're seeing with the pandemic, it gets a little foggier,” says Lawton.
