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Nevada Casinos Continue Record-setting Pace in June 2005;
Receives Healthy Kick from Wynn Las Vegas
By Rod Smith, Las Vegas Review-Journal
Knight Ridder/Tribune Business News

Aug. 12, 2005 - Nevada casinos continued their record-setting pace in June, winning just shy of $1 billion, thanks to a healthy kick from Wynn Las Vegas for the second month in a row.

While the gaming win set a record for June, it fell short of breaking the $1 billion mark reached for the first time ever in April and hit again in May.

With a total win of $954.2 million, the state exceeded last year by $99.9 million, an 11.7 percent jump.

Strip revenues rose to $489.6 million, up 16.4 percent from $420.6 million in June 2004.

June also marked the 11th straight month that the gaming win increased over the same month a year earlier and was well ahead of the $878.2 million won in April, Frank Streshley, senior research analyst for the state Gaming Control Board, said.

"Special event-wise, it was a quiet month and not a big month for conventions," he said. "But the numbers are still being pushed by the opening of Wynn Las Vegas and the demand for visitation to Las Vegas."

Brian Gordon, a principal in Las Vegas-based financial consulting company Applied Analysis, called the results "pretty impressive," but added that the opening of Wynn Las Vegas makes them difficult to assess.

"You really have to look at growth on a same-store basis, casinos properties that existed in both periods," he said.

"The 16 percent growth on the Strip was very impressive. Blackjack alone was up 30 percent. You had very strong table activity and a respectable increase in slot revenues as well," Gordon said.

Factoring out the effect of Wynn Las Vegas, however, the increased win at Strip properties would have been closer to 8 percent, he said.

"The Strip without Wynn was still positive, but not as positive as the numbers appear on the surface," Gordon said. "That also means that Wynn's long-term contribution to the Strip could be very impressive."

Deutsche Bank analyst Marc Falcone said results from high-end business were particularly impressive, also thanks to the opening of Wynn Las Vegas. He said the $2.7 billion resort can be expected to keep propelling results on the Strip and in Nevada.

Statewide, the baccarat volume increased to $253.3 million, up 119.5 percent from June 2004, but the win declined to $33.8 million, down 16.5 percent from the year before.

"Despite baccarat hold issues this month and last, we are encouraged by the strong table volume trends witnessed on the Las Vegas Strip as we continue through the seasonally soft summer months," Falcone said.

Statewide, slot machines accounted for $656.9 million of the total win, up 9.4 percent from a year earlier. Table games accounted for $285.2 million of the total win, up 15.6 percent from a year earlier.

The gaming win in South Lake Tahoe increased 1.4 percent to $25.6 million from $25.3 million. Gaming win in Elko County was $21.1 million, up 10.8 percent from $19 million a year earlier. The win in the Carson Valley area was $10.4 million, up 11.8 percent from $9.3 million a year earlier.

By contrast with other areas of the state, the win in downtown Las Vegas casinos was $51.4 million, down 2.9 percent from $52.9 a year earlier, and the win in North Lake Tahoe was $3.3 million, down 3.4 percent from $3.4 million a year earlier.

"Downtown Las Vegas continues to struggle -- it posted its third straight month of declines -- but the (Las Vegas) locals market was very strong, as was Boulder Highway," Streshley said.

Based on the taxable revenues generated in June, the state collected $55.2 million in percentage fees in July, up 1.3 percent from $54.4 million in the previous June.

The tax collections also fell short of the May 2005 Economic Forum's projection of $57.4 million by 3.9 percent.

Gordon and Streshley both said the tepid tax revenue growth was caused by the timing of the casino's revenue collections, and should balance out to an average rate of growth closer to the growth in casino winnings over the course of the year.

Falcone said gaming operators on the Strip can be expected to capitalize on continuing increases in demand for vacations on the Strip, boosted by a solid convention schedule for the third quarter.


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