The latest numbers from the Gaming Control Board and Convention and Visitors Authority indicated that Las Vegas is making some incremental progress when it comes to visitation and gambling volume that is expected to continue through November. Circa will help build on that.
During earning calls over the last two weeks, gaming companies with their cost-cutting of staff and other expenses are touting their adjusted earnings. Properties are bringing back some shows since the state has increased capacity to 250 and are scheduling group meetings because they can host up to 1,000 people with 250 people each.
Properties are also excited because Gov. Steve Sisolak is talking about increasing those meeting levels in early 2021. With the use of rapid COVID-19 testing, casinos say it gives people more comfort to come to Las Vegas to attend shows and meetings, the latter which is critical to mid-week visitation.
But a lot of question marks remain and even that was raised during earnings reports.
Coronavirus cases continue to rise in Nevada and the rest of the nation and U.S. health experts are talking about a difficult winter as European countries have started locking down with rising caseloads and deaths. Casino hours in Massachusetts have been cut back because of a COVID-19 outbreak.
MGM Resorts International said they are looking at what was described as slow-period plans as soon as December weekdays. It did not provide details.
#BREAKINGMGM Resorts International said they are looking at what was described as slow-period plans as soon as December weekdays. It did not provide details No fireworks on #LasVegasStrip for New Year’s Eve https://t.co/jdGWjbsdxk
— KTNV 13 Action News (@KTNV) October 29, 2020
December is expected to be extremely slow with the National Finals Rodeo relocating to Dallas-Fort Worth this year.
But we can worry about that in a few weeks. We know that while people aren’t flying to Las Vegas in any greater numbers since casinos reopened June 4, more and more people are driving here from California, Arizona and Utah.
Visitation rose 170,000 or 11% in September from August and with it, room occupancy climbed on the Strip and downtown. Visitation at 1.7 million is still down about half but it was down 57% in August.
It wasn’t due to air traffic that was down from August, but there were about 6,000 more vehicles a day crossing the Southern Nevada border over September 2019. October numbers through the 28th showed some 18 days with double-digit increases year-over-year from Southern California and gaining.
September weekend occupancy was 66.1%, up from 63.1% in August. It was 95.6% a year ago September. Weekday occupancy was 38.5%, up from 34.4% in August. It was 85.1% a year ago in September.
“That’s some good news and things are moving in the right direction,” said Brent Pirosch, CBRE gaming analyst. “More people are coming, and that’s good for jobs. I know some operators are talking about limiting weekday operations in some cases, but that’s not the end of the world. There will continue to be some adjustments as operators try to figure out what’s appropriate.”
The LVCVA canceled the NYE’s fireworks show on the Strip, but Pirosch said while it’s good marketing for Las Vegas, that won’t affect visitation. There are other reasons to come and bringing back entertainment helps that, he said.
For the month, Las Vegas Strip gaming revenue was down 39% from September 2019, but it was much better than that for mass-market customers, Pirosch said. The 39% decline was due to losses for VIP play for baccarat. Excluding baccarat, it was down 28% year-over-year but up 25% from August.
“The market is headed in the right direction,” Pirosch said. “The people that want to and are able come are making efforts to get here. The operators are doing their best to provide them amenities as best as they can. The market is moving in the right direction. It’s just going to take some time.”
Locals’ casinos remained the best segment and were down only 1.5% from September 2019. Downtown gaming revenue fell 21.5% in September year-over-year, but was up 45.6% over August.
“I’m still pretty bullish on downtown,” Pirosch said. “Circa is going to create a lot of excitement in the market. Downtown has been up five of the last six years. There has been a lot of capital investment in that market. They have the tools and talent to continue to make strides. They have a greater share of locals in their customer base than the Strip.”
Boyd Gaming CEO and President Keith Smith said during an earnings call that Circa will play an important role for downtown in drawing visitors. It’s a higher-end product that differentiates from others with the exception of the Golden Nugget.
The gaming numbers released from the Nevada Gaming Control Board showed that in September football bettors did better than their historical trend for the first month of the season.
Sports wagering for September with all major sports going at once was $572.2 million — up 5% year-over-year — the highest September ever and fourth highest in history, according to Michael Lawton, senior research analyst for the board.
The sportsbooks won $32.9 million, down $19.2 million or 36.8% from September 2019. The sports pool hold was 5.72% in September 2020 versus 9.53% in September 2019.
Football betting volumes were down 41.3% or $155.8 million due to several factors including the NFL starting on 9/10 vs. 9/5 in 2019, making for one less weekend of NFL in this year, Lawton said. Football hold was 4.81% versus 10.35% in 2019.
“The 4.81% ranks as one of the lower September hold percentages on record, although not the lowest,” Lawton told Gaming Today. “The average hold in September the last 10 years is 10.5%.”
Race books won $3.3 million, an increase of 22.7% over last year, Lawton said. Race books booked their own wagers for the Kentucky Derby.