Analysts Forecast Continued Decline In Strip Gaming Revenues

After a fourth consecutive year-over-year monthly decline in Las Vegas Strip gaming revenue, analysts don’t expect to see any turnaround when November and December numbers are reported, given a tough comparison to a year ago. At the same time, the Durango Casino & Resort’s celebrating its one-year anniversary Thursday is boosting locals casino revenue growth.

No one is in a panic over the Strip decline, primarily attributed to a drop in baccarat hold and tough comparisons against the second half of 2023.

Baccarat Decline And Soft Visitation Contribute To Gaming Revenue Drop

Strip gross gaming revenue of $692.1 million in October was down 3.1% year over year, influenced by a decline in baccarat hold from 15.3% to 11.9%. Year-over-year Strip baccarat win decreased 23% as drop decreased 2%.

“Looking ahead, the Strip faces tough comparisons in both November and December, months in which baccarat hold in 2023 was 19% and 22%, respectively,” said Carlo Santarelli, an analyst with Deutsche Bank. “We expect year-over-year gaming-revenue declines in both months and we believe hold around F1 was as expected — less favorable than it was in 2023.”

Santarelli pointed out that the October calendar contained eight weekend days in both 2023 and 2024. He noted that September 2023 ended on a Saturday and made the October 2024 comparison a touch tougher.

Strip table-game hold was a 15% average for all of 2023, which makes it challenging for 2024, according to Joseph Greff with J.P. Morgan.

Barry Jonas, an analyst with Truist Securities, cited soft visitation data for Las Vegas, with Strip hotel revenue per room and average daily rates down 10% and 8%, respectively, in October. That’s expected to decline in November, based on room rates monitored.

Las Vegas’s monumental events, such as F1, brought up visitation that can’t be replicated after the first time, according to casino consultant Brendan Bussmann, managing partner of B Global. He agreed about the challenges in the short term, but continues to be optimistic for long-term growth.

“These continue to be interesting and challenging economic times,” Bussmann said. “With the uncertainty heading into the election, a lot of people pulled back on things. We’ll see what happens in a post-election world. We’ve been flirting back and forth with a recession for the last two to three years and there’ll be some ups and downs along the way. As you continue to see other states with revenue stagnant, it’s a challenge.”

Locals Casinos See Growth Despite Strip Decline

There was good news in October.

Helped by the Strip, statewide slot win of $932.3 million increased 4.2% or $37.6 million and coin-in of $12.3 billion was up $424.8 million or 3.6%. October’s slot win established a new all-time monthly record, beating the previous high of $914.1 million set in June 2024.

“Relative to October 2019 levels, Strip slot revenue of $428 million increased 40%, as handle was up 37%, implying hold rate increased 21 basis points to 8.3%. Year-over-year, win was up 5% with handle up 4% while hold was up nine basis points,” Greff said.

Despite the drop on the Strip in October, Deutsche Bank reported Las Vegas locals casinos net a 4.5% increase in October from $261.5 million to $273.2 million. The Durango opening is credited, even though those year-over-year comparisons will start to change when compared to that property rather than before its arrival.

“When looking at slot handle and table revenue, a better measure given the accounting methodologies, we believe gaming revenue for the month was up roughly 2%,” Santarelli said. “Recall, November is the last month prior to the lapping of Durango, which opened on December 5, 2023.”

Bussmann said it would be nice to have more information on where the 4.5% increase is coming from, but assumes it’s Durango, which fills a gap in southwest Las Vegas where neighborhood residents had no nearby options. “You literally had a void and your closest casinos were Red Rock, Orleans, and South Point. There’s nothing around Durango.”

Jonas suspects some cannibalization on the market from Durango, as well as some aggressive competitive promotion responses to its opening, though he said the metrics are gradually improving.

Despite some of the gloom, there’s more good news when looking historically relative to October 2019 levels. Strip gaming revenue increased 29%, locals gaming revenue increased 27%, and statewide gaming increased 26%, Greff said.

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