Downtown Las Vegas casinos enjoyed a surge in foot traffic in August, countering a trend at the nation’s casinos, including the Strip and neighborhood properties frequented by Las Vegas residents, according to a new report from Jefferies Equities Research.
As COVID-19 cases rose, national foot traffic at casinos overall dipped 18% in August and Las Vegas experienced the same trend after a strong July, setting up expectations that gaming revenues won’t be as strong as the record-breaking month.
David Katz, an equities analyst with Jefferies, reported nationwide foot traffic fell 18% compared to July and was down 26% compared to August 2019. July foot traffic nationwide was down 26% compared to July 2019.
On the Las Vegas Strip, Katz said foot traffic was down 24% from July and 22% from August 2019. The July foot traffic was down 22% from July 2019, he said. That comes off the Las Vegas Strip recording an all-time high in gaming revenue in July when Resorts World Las Vegas and Allegiant Stadium were open for their first month, bringing 3.3 million visitors to Las Vegas and the strongest showing yet during the pandemic.
Traffic at casinos frequented by Las Vegas locals fell 17% in August compared to July. It was down 42% compared to August 2019, while it was down 46% from July 2019.
The surprise came in visitation at downtown Las Vegas casinos, where volume was up 10% over July and 10% over August 2019 levels. That was after July, when foot traffic in downtown was down 25% over July 2019, Jefferies reported.
Downtown Las Vegas registered $71.2 million in gaming revenue in July, down from $79 million in June when an all-time record was set. The July numbers, however, were 35.5% higher than 2019, as downtown apparently continued to benefit from the opening of the Circa Resort & Casino in late October and in its entirety in December. Strip hotel room rates have also started to rise substantially this summer, which may create greater value for downtown.
On Wednesday, Boyd Gaming reopened Main Street Station, which had been closed since March 2020 due to the pandemic.
In Reno, August visitor volume was down 15% over July and down 28% versus August 2019. July 2019 was down 31%. Laughlin’s August volume was down 21% compared to July, but its volume was down 36% vs. 2019 levels, which was better than July’s 47% decline, Jefferies reported.
At Lake Tahoe, which has been battling wildfires, August volume was down 34% compared to July. It was down 25% versus August 2019 levels. The Lake Tahoe casinos returned to business this week after they were shut down for a week due to the wildfires, timing that hurt Labor Day weekend visitation.
As other analysts have reported, Louisiana was severely impacted when Hurricane Ida made landfall Aug. 29, wiping out power in New Orleans and leading to several casino closures for more than a week.
Jefferies reported that between Aug. 29 and Sept. 5, casino foot traffic in New Orleans was down about 90%. Roughly 80 miles away in Baton Rouge, which experienced some disruption from Ida, foot traffic was down 74% during the same period. Lake Charles and the rest of Louisiana fared better, Jefferies reported.
Among other key markets, Detroit was up 41% from July, but still down 28% versus August 2019 levels. In Kentucky, volume remained strong, down just 3% over July.
“This is an important market for Churchill Downs, as the company is looking to add 200 gaming positions at Derby City Gaming and potentially build another (historical racing machine) facility in Louisville,” Katz said.
Jefferies also highlighted Black Hawk, Colorado, where the $100 bet limit was removed in May and had a “significant addition of lodging and gaming capacity by (Monarch Casino & Resort). We believe the development should raise the gross gaming revenue ceiling for the market overall, and thus we monitor the market closely.”
In August, Black Hawk’s traffic volume was down 16% from July, though down just 12% versus August 2019 levels, which was better than July’s decline of 16%, Jefferies reported.
Earlier this week, Deutsche Bank released a report saying that they expect gross gaming revenue growth compared to August 2019 across five of six regions it tracks, with Louisiana likely to experience double-digit contraction due to Hurricane Ida.
Deutsche Bank said, however, that gross gaming revenue will decelerate compared to July in all six markets.
