Las Vegas strip revenue down 7.7 percent in January; analysts

Las Vegas strip gaming revenue in January fell 7.7 percent year on year to $532.3 million, brought down by a 26.3 percent decline in baccarat, and below expectations of single digit growth, according to analysts.

According to Wells Fargo, the results were impacted by a number of factors including: the change in Super Bowl timing (which was held in January in 2015), a strong January performance in 2015, an extra calendar Sunday this year, and a drop in mass market volumes of 12 percent.

Slot revenue was flattish/up at 0.7 percent year on year at $258.5 million. While Baccarat revenue fell 26.3 percent year on year to $101.4 million.

“January marked the fourth consecutive month of declines in baccarat volume and the 8th decline in the last 9 months,” said Deutsche Bank.

Table revenue ex-baccarat was down 5.5 percent year on year to $172.3 million, and drop declined 20.3 percent year on year.

“Overall, 2015 ended lackluster in Vegas from gaming revenue growth perspective, flattish/down -0.4%, dragged down mainly by baccarat down -14%, as revenues ex-baccarat came in line with our expectations of low single digit growth, up +3.7% for the year,” says UBS analysts.

Union Gaming analysts say they remain positive on the Las Vegas market due to growth in airport passenger volume, which they expect to continue at least for the first half of 2016.

“Although GGR on the Strip was off in January, we remain constructive on the overall business, and expect gaming revenue trends will normalize as the year progresses. We continue to see low-single-digit GGR growth on the Strip in 2016, but reiterate the real area of growth will be in room revenues, other non-gaming amenities, and continued cost improvements by major operators.” said Union Gaming.