Thursday, August 11, 2011

Atlantic City vs Vegas Gaming

  • Atlantic City revenue fell 6.5% in July, as slot win fell 3.0% and table win (ex-poker) declined 14.1%. The decline in July compares to declines of 3.7% in June, 6.7% in 2Q11, and 7.3% in 1Q11.
  • The 14.1% decline in table win was driven by a 172bp decline in table hold and 3.2% decline in table drop. Atlantic City gaming revenues fell 9.6% in 2010 after declines of 13.2%, 7.6% and 5.7% in 2009, 2008 and 2007, respectively. July 2011 marked the 35th straight month of decline for the market, which has been negatively affected by the economy and competition from neighboring states (particularly Pennsylvania).
  • Borgata outperformed the market. Revenues were down 0.2% at the property (second best in the market behind Harrah's 1.1% gain). Table win increased 0.1% as a 5.9% increase in drop offset a 66bp decline in hold. Slot win was down 0.3%, better than the market average decline of 3.0%.
  • Only one property in Atlantic City experienced a gain in July. Harrah's was up 1.1%. Trump Taj Mahal (-22.5%), ACH (-13.2%), and Bally's (-9.7%) experienced the largest declines.
  • Market-wide table hold of 13.5% (down 172 bps year over year) was below the normal 14% to 17% range. Only Showboat (17.8%) held above the normal range, while Borgata (11.4%), Caesars (12.7%), and Resorts (9.9%) all held below the normal range.
  • Market-wide slot win fell 3.0%, driven by a 4.0% decline in slot handle. Slot hold was up 10bps year over year. Three properties generated an increase in slot handle during the month: Borgata (+0.8%), Caesars (+7.3%), and Harrah's (+2.8%). The three properties with the largest declines in slot handle were Trump Taj Mahal (-15.7%), Golden Nugget (-13.3%), and Resorts (-11.3%).

Right now there are so many promos in AC, you can gamble for free. Except for the Borgata, all the casinos seem to be chasing the same slot dollars. It's so bad there, they'll be bringing back the diving horse!

Vegas, however is a different story.

  • Positive momentum for Las Vegas visitation and hotel data continued in June; visitation, air traffic, hotel occupancy and RevPAR all increased. Increased visitation supports hotel room revenue growth as well as other revenue streams (such as food and beverage and entertainment), which all have been playing a role in improved operating results on the Las Vegas Strip this year.
  • Las Vegas June visitation was 3,324,290, up 7.0% year-over-year. Convention visitation was up 2.0% at 358,642 in June (versus flat in May, a 2.2% increase in April and a 10.8% increase in 1Q11) while "leisure visitation" (total visitation minus convention visitation) was up 7.6% versus a 3.7% increase in May, a 5.2% increase in April and a 4.0% increase in 1Q11.
  • RevPAR increased 21.1% in June, driven by a 13.1% increase in ADR to $101.15 and a 6.4 percentage point increase in occupancy to 88.5%. RevPAR increases averaged 16.6% in 2Q11 versus a 16.1% average increase in 1Q11.
  • McCarran Airport traffic (enplaned/deplaned passengers) increased 5.6% to 3,592,523. Average daily traffic on 1-15 at the Nevada/California Border grew 1.7%.

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