The Nevada Gaming Control Board announced this week the results of casino win rates for the month of June 2009, continuing a downward trend and leading to one casino chain filing for bankruptcy protection in July.
For the month of June, casinos in Nevada produced a win – the money taken in by the casinos before taxes or other deductions – of over $818 million. This was significantly lower than the same time period in June 2008, when Nevada casinos pulled a win of over $949 million. The decrease in revenue is 13.2 percent and continues a trend that has been in effect for well over a year now.
There wasn’t an area of Nevada that reported a positive win rate in June 2009 versus the same time frame in 2008. The Carson Valley area reported the biggest drop in win rate when it reported $8.1 million in win versus $9.7 million in 2008, a 15.6 percent drop. The South Lake Tahoe area wasn’t far behind when they reported a 15.06 percent falloff from 2008 (from $20.5 million in 2008 to $17.4 million in June 2009). Those areas most familiar to poker players, the Las Vegas Strip and the Downtown area, both saw win rates drop by 14.77 and 5.63 percent respectively. Overall, Clark County’s gaming win rate declined by 14.71 percent from $806 million in 2008 to $687.5 million in June 2009.
The June report continues a trend that has been in place for over a year now. For Fiscal Year 2009 – a period that covers July 1st, 2008 through June 30th, 2009 – casino win rate in Nevada eclipsed $10.7 billion. For Fiscal Year 2008, which ended on June 30th, 2008, the total was $12.5 billion, 13.72 percent more that the win rate from the most recently completed fiscal year.
The downturn in the economics of Nevada’s casino industry can be seen in two distinct places. As of this writing, such stocks as Wynn Resorts (down $2.72 to $58.16 per share), Las Vegas Sands (down .69 to $13.10) and MGM Mirage (down .05 to $8.72) are below their opening prices. Even though casino revenues have been down for a considerable time frame, the stock of those involved in the Nevada casino industry has been on the rise over the last three months, reflecting the overall upturn by the stock market.
The continued soft performance of the Nevada casino industry has also claimed its first victim. According to the website Casino Gaming Stock, Station Casinos – which holds eighteen casinos and is a prime player in off-Strip casino action for locals and in-state players – has been avoiding bankruptcy court for the past few months by borrowing heavily and trying to negotiate a good settlement for their properties. After those negotiations collapsed, Station Casinos was forced to file for Chapter 11 bankruptcy protection at the end of July.
Casino Gaming Stock reports that the news of Station Casino’s bankruptcy may be a good sign for one of its competitors. Boyd Gaming, who made a billion dollar offer to Station prior to the bankruptcy announcement and was rebuffed by Station, is rumored by Casino Gaming Stock to be considering making another offer to Station for its assets. As of press time, there was no report of Station’s reply to this offer from Boyd Gaming.
