Nevada’s gaming industry racked up $1 billion-plus in revenues every month for the past six months, with the credit going to locals, drive-in gamblers and federal stimulus checks.
“I was shocked,” Michael Lawton, senior economic analyst for the Gaming Control Board, told Nevada Newsmakers. “If you would have told me at the end of 2020 or even at the beginning of 2021, that we would be here today talking about this streak of $1 billion in gaming win, I would have laughed at you. I didn’t see it coming.”
With the big win, the state is now nearing the record for consecutive months with the gaming win at or above $1 billion.
“The all-time record is eight, so this is the second longest record, all time,” Lawton said. “The longest streak was back in November of ’07 through May of 2008. So we’re at an historic rate of gaming win.
“If we finish the year with that average continuing, we’ll hit $12 billion, obviously,” Lawton said. “That has only happened three times, 2006, 2007 and 2019. So we are really on a historic run.”
Lawton told show host Sam Shad the current streak is being driven by the locals market and drive-in customers from nearby states, as well as federal stimulus money from the American Rescue Plan Act.
“There was a lot of federal stimulus in the market, too, that was pumping up the economy,” Lawton said.
Slot machines were the favorite games, he added. “The slot play is 11 percent over 2019 levels. It is setting all sorts of records. So that’s what is really driving these numbers.”
Markets that rely on locals and drive-ins “were at pre-pandemic levels very quickly,” Lawton said. “Washoe County, the Las Vegas locals, South Lake Tahoe all got off to a strong start. Mesquite, Elko. too. That’s how it was playing out.”
The end of federal subsidies “could bring us back down,” he pointed out. “The Delta variant, we’re still not out of the woods on that …The traditional spending patterns are not back yet because everything is not yet back on line.”
According to the Las Vegas Review-Journal, rising Covid cases due to the Delta variant slowed foot traffic at the nation’s casinos in September, but analysts are expecting a solid fourth quarter, especially in Las Vegas—despite the cancellation of dozens of Southwest Airlines flights on October 10. Southwest canceled 1,900 flights across the country that weekend, due to what it called “air traffic control issues and disruptive weather” as well as labor shortages.
David Katz of Jefferies Securities noted that September foot traffic in Las Vegas, dropped 8 percent from August, but was far less than the 24 percent decline from July to August.
“We believe rising daily cases of the coronavirus experienced in Nevada during the mid-to-late summer likely impacted results, as normal seasonal trends suggest September would be better than August,” Katz said.
Bank of America analyst Shaun Kelley said Las Vegas peaked in July, but has leveled off since then by hitting “a snag due the Delta variant with group cancellations and room-rate data slowing.” But fourth-quarter room rates are currently 6 percent above 2019 levels, he said, an indication of higher demand. “Vegas remains a solid way to play the U.S. leisure recovery,” Kelley said.
