- Nevada’s gaming industry continued to show improvement in July following huge revenue losses due to a shutdown due to the COVID-19 pandemic.
- Gaming revenue statewide was down by 26.2% from July 2019.
- Las Vegas ‘locals’ properties are rebounding quicker than the megaresorts on the Strip.
Slowly but surely, gaming revenues are improving in Nevada but there is concern about where they go from here. To this point, the recovery in the handle at the state’s casinos is somewhat uneven with revenues on the Las Vegas Strip lagging behind areas predominated by ‘locals’ oriented properties.
First, the ‘glass half full’ view: statewide gaming revenue was down 26.2% from July 2019 at $756.8 million. That’s a marked improvement from the 45.5% decline in June and a world away from the 99.6% loss in April and the 99.4% loss in May. April and May were the months during which the state’s gaming industry was closed due to the COVID-19 pandemic. That 78 day shutdown is unprecedented in Nevada gaming annals and devastated the state’s economy.
At one point, Nevada had the highest unemployment rate in the country at 30% with the Las Vegas metro area the highest of any large city in the US. Statewide, the unemployment rate is now 14% in the latest report from the US Bureau of Labor Statistics which is still one of the worst in the US trailing only rust belt dinosaurs New York (15.9%) and Massachusetts (16.1%). Neighboring Utah has the lowest unemployment rate in the country at 4.5%. The Las Vegas area no longer has the highest unemployment in the country but they are very close. Currently, the Las Vegas-Henderson-Paradise, NV Metropolitan Statistical Area has an unemployment rate of 18% which is fractionally better than Los Angeles-Long Beach-Anaheim, CA Metropolitan Statistical Area which has the country’s highest unemployment rate at 18.1%. The Salt Lake City metro area has the best unemployment picture in the US with a 6.4% figure.
THE LAS VEGAS STRIP STILL LAGGING BEHIND
The Las Vegas Strip was down -39.2% from July 2019 at $330.1 million. That is the second worst decline of any area in the state measured by the Nevada Gaming Control Board. Here’s the full July 2020 breakdown of Nevada gaming revenues by area:
The other big areas of decline were in the tourist dependent Lake Tahoe area. South Lake Tahoe had a drop of 39.70% which is fractionally higher than the Las Vegas Strip. North Lake Tahoe experienced a decline of -33.20%.
These gaming figures make clear that for the time being at least not having a large tourist trade can be an asset. The Sparks, Nevada area was actually up 2.82% over July 2019. Nondescript Wendover, Nevada–just over the border with Utah–had a decline of only -4.34%. Mesquite, Nevada–just over the Arizona border and just 40 minutes from the St. George, Utah area–was down just -0.83% over July 2019. No doubt this has something to do with Utah’s comparatively low unemployment rate.
Within Clark County, the Strip is also lagging behind other areas. This is likely to continue given the headwinds that the Las Vegas Boulevard megaresorts will continue to face. International travelers are in many cases being kept away by travel restrictions. The loss of major events, shows and nightclubs keeps certain demographics away from town. Midweek occupancy and revenue numbers have been pulverized by the complete loss of convention business.
Overall, visitor volume for July is down -61% from 2019. Weekend occupancy rate is down -42.8% and midweek occupancy is down -51.8% (which is actually not bad given the complete loss of the convention visitors). Daily auto traffic overall is down just -10% with a -16.6% drop at the California/Nevada border on I-15. The state of fly in visitors is dismal with traffic at McCarran International Airport down 61.1% over July 2019. The full database of visitor metrics at the Las Vegas Convention and Visitors Authority website is full of interesting revelations but the bottom line is that no matter how you break it down everything is ‘in the red’ by double digits.
