Vegas result not as bad as it looks

Gaming revenues for Vegas Strip casinos in March fell 9.6 percent compared to the year before, with roughly half of the drop driven by baccarat, a result that’s not as bad as it looks, UBS wrote in a note.

Excluding baccarat, underlying revenues were down 4 percent for the month, still below the research house’s expectations of low single digit growth.

UBS notes that Baccarat revenues were down 34 percent YoY, with win rate of 8.31 percent, significantly below last year’s 14.83 percent, meaning baccarat drop was actually up 18 percent YOY in March after 6 consecutive months of YOY declines. 

“While underlying revenues are not down as much as headline, March overall is below our +3.5% estimates for Vegas, even when excluding baccarat. This brings Q1 Strip gaming revenues to flat YOY, with revenues ex. baccarat up +1% vs. our estimate for MGM for Q1’15 Strip gaming rev +3.5%”

“Wynn reported below expectations results in Vegas yesterday, indicating Vegas is not experiencing a recovery (partly a function of stronger dollar, and softer Chinese demand) according to mgmt. Wynn has seen summer trends not pickup in the same way they did last year,” analysts Robin Farley and Arpine Kicharyan said.