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Las Vegas Strip June Gambling Revenue Fell in Biggest Drop Since October
Las Vegas Strip gambling revenue fell 7.6 percent in June, the largest monthly decrease since October, as the U.S. casino city’s recovery from a record slump stalled on shrinking baccarat winnings.
Revenue declined to $383 million from $414.5 million a year earlier, the third straight monthly decline, Nevada’s Gaming Control Board said today on its website.
Resort operators in the largest U.S. casino and conference market, including MGM Resorts International, Las Vegas Sands Corp. and Wynn Resorts Ltd., have cut room prices and boosted special offers to attract gamblers and vacationers. The companies, during their recent quarterly earnings announcements, noted some signs of improvement in the second half.
Increased group and convention bookings in the second half of 2010 are encouraging because they allow Strip casinos to fill midweek rooms at higher rates, Jacob Oberman, an analyst at CB Richard Ellis Group Inc. in Las Vegas, said today in a client note.
Revenue for all Nevada casinos fell 6.7 percent to $763.8 million in June, the board said. Monthly proceeds for Clark County, which includes downtown Las Vegas as well as the Strip, slid 6.9 percent to $640.1 million.
Strip casinos won about 61 percent less at baccarat in June, hurting overall gambling revenues, David Katz, an analyst at Jefferies & Co. in New York, said in a note to investors.
‘Turning Point’
“The month of June was a turning point for us” as revenue at MGM’s available Las Vegas rooms increased year-over-year for the first time since October 2007, driven by luxury resort gains, MGM Resorts Chairman and Chief Executive Officer Jim Murren said in an Aug. 3 interview. “That cut us deeply in 2008 and 2009, and now we’re starting to see a recovery.”
“Business is slightly better in Las Vegas, we’re noticing a little improvement,” Steve Wynn, founder and CEO of Wynn Resorts, said July 29. The company is renovating Wynn Las Vegas’ 2,716 rooms and suites in anticipation of a recovery.
Still, competition is fierce. Las Vegas casino resorts are competing by offering too many complimentary rooms to win visitors, which is hurting rates, Robert Goldstein, head of Las Vegas Sands’ two Vegas resorts, said July 28.
“There is too much comping, but there is also too much supply in the market right now,” Goldstein said. “You will see that continue to be a problem for us and for the market in general” until travel strengthens.
Plane Traffic Down
About 18.5 million people visited Las Vegas in the six months through June, a 1.9 percent increase from 2009, according to the Las Vegas Convention and Visitors Authority. Convention attendance has fallen 4.1 percent and average daily rates at Vegas hotels rose 0.5 percent.
Passenger traffic at Las Vegas’s McCarran International Airport fell 3 percent in the six months through June, extending last year’s record 8.2 percent drop and 2008’s 7.7 percent decline, as carriers including US Airways Group Inc. cut flights in response to lower demand, data released by the Clark County Department of Aviation last month shows.
MGM Resorts fell 3 cents to $10.11 as of 2:37 p.m. in New York Stock Exchange composite trading. Las Vegas Sands increased $1.03 to $27.96. Wynn Resorts fell 101 cents to $87.08 on the Nasdaq Stock Market. All three companies are based in Las Vegas.
To contact the reporter on this story: Beth Jinks in New York at bjinks1@bloomberg.net.
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