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NEVADA ECONOMY: Gaming win dips in July
$812.5 million is lowest monthly total since
December, but fall blamed on calendar
September 11, 2004 - Nevada's total monthly gaming win
dipped in July for only the second time this calendar year,
falling 1.6 percent to $812.5 million compared with $825.4
million a year earlier, the state Gaming Control Board
reported Friday.
Analysts blamed the drop mainly on the fact there were only
four weekends in the month, compared with five weekends in
July 2003, although one expressed some concerns about consumer
attitudes.
Unlike June, when the gaming win fell from a year earlier but
increased from May, the July win was down from June and was
the lowest posted in Nevada since December.
Control board statistical analyst Frank Streshley said it was
also the first month that new tax rates hit gaming revenues.
In September 2003, the gross receipts tax on gaming win was
increased from 6.25 to 6.75 percent for top-tier casino
companies.
The state collected $49.2 million in August, based on taxable
revenues generated in July, down 8.7 percent from $54.4
million the month before.
Streshley also pointed out that the soft spots were mainly in
Clark County and the South Lake Tahoe area, which had a 21.8
percent drop in gaming win.
"We don't usually look at smaller markets pulling the state
down, but that's the case this year. And in July, (South Lake
Tahoe) had (a major) golf tournament and casino play was
extremely unlucky, pulling the state down."
Still, Brian Gordon, spokesman for Applied Analysis, a Las
Vegas-based financial consulting firm, said one month doesn't
make a trend.
"The July gaming win numbers were somewhat surprising, but the
increase in the prior year, when the win was up 4.5 percent,
set a high hurdle to meet," he said.
Deutsche Bank analyst Andrew Zarnett said if you take out the
low table holds for the month, gaming revenues increased 7
percent compared with 2003.
"July really continued the strength we saw in the spring. We
expect the trend continued in August and we should keep seeing
strong results into the fall," he said.
Despite the decrease, Gordon said overall gambling activity
appeared strong statewide in July.
"The drop at table games was up 16 percent while the drop on
the slots was up 14 percent, suggesting strong activity," he
said.
Total drop is the amount wagered and lost at table games and
slot machines.
"Overall, it seems as if the activity is there," Gordon said.
"The same month, McCarran saw a record number of passengers.
But in this particular month, players fared better than they
have historically."
Eric Hausler, gaming analyst for Susquehanna Financial Group,
said the problem of relatively lucky players was compounded by
the calendar.
Because the last day of the month fell on a Sunday, July
included only four weeks of slot revenues, compared with five
in 2003, he said.
"They had an entire extra weekend last year. In addition, they
had a big surge in demand on the Strip last year at the end of
the war (in Iraq)," Hausler said.
"This year, you had a consumer hiccup in July. The economy
definitely hit a soft spot over the summer. That said, August
will be an easier comparison and September should be pretty
strong because of the timing of Labor Day this year," he said.
"Still, we're watching consumers closely. There's no doubt Las
Vegas has slowed from its torrid pace earlier in the year and
we're expecting more moderate growth rates in the back half of
the year," Hausler said.
Gov. Kenny Guinn in a statement called the latest gaming
statistics disappointing after six solid months of growth.
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