Gambling Revenues Continue to Fall in Nevada

In its latest report on gambling revenues in the state, the Nevada Gaming Commission said that total revenue for May 2012 came in at $885.1million, down -10.05% compared with May 2011. For the first eleven months of the fiscal year, state-wide revenues are up 1.26%. The Las Vegas Strip accounted for more than half of the state’s revenue, with a May total of $475.1 million, down -18.2% from May 2011. Revenues from The Strip are up 1.1% this year.

First quarter EPS estimates for MGM Resorts International (NYSE: MGM) and Ceasars Entertainment Corp. (NASDAQ: CZR) have both fallen, with an expected EPS loss of -$0.14 at MGM and -$0.91 at Ceasars. Wynn Resorts Ltd. (NASDAQ: WYNN) and Las Vegas Sands Corp. (NYSE: LVS) are expected to post first quarter EPS of $1.56 and $0.62, respectively. Wynn’s profits are expected to be lower than the same period a year ago, while Las Vegas Sands is expected to boost EPS by $0.08.

But higher profits will depend on revenues from the casinos’ holdings in Asia, principally in Macau. And revenues there are declining as China restricts visitor visas to the former Portuguese colony and sets limits on credit card spending at the Macau casinos.

Here are a few interesting numbers for the Nevada report:

• Total slot machine revenue from The Strip represented more than half the state’s win at Strip casinos.
• Penny slots provide 3x the revenue of dollar machines at Strip casinos.
• Baccarat, bingo, and 21 revenues have fallen -47%, -47%, and -36% respectively, year-over-year at Strip casinos.
• Slot machines provided about 68% of statewide revenue.
• Baccarat, bingo, and 21 revenues are down -48%, -44%, and -29%, respectively, year-over-year statewide.

The casino stocks are getting hit hard on the Nevada report. Ceasars is down more than -13% at $8.95 after posting a new 52-week low of $8.78. The previous range was $9.00-$17.90.

MGM shares are down -4.1% at $9.80 in a 52-week range of $7.40-$16.05. Wynn shares are off -4.8% at $97.18 in a 52-week range of $95.82-$172.58. Las Vegas Sands’ shares are off -4% at $39.37 in a 52-week range of $36.08-$62.09.

The Gaming Control Board’s full report is available here.

Paul Ausick