Chronology of the Recession

Here is a chronology of the recession month by month as depicted in the Las Vegas Review Journal. The months were counted down until they got to month #23 when the state gaming revenue finally went up.

The articles are accompanied by images of that month previous to the month the year before:

#	Month	Article	Web link Title	Author
25	Jan 2010	10-Mar-2010	http://www.lvrj.com/business/nevada-gaming-revenue-down-3_2-percent-in-january-87227207.html ' rel='nofollow' target='_blank'> Nevada gaming revenue down 3.2 percent in January	HOWARD STUTZ
24	Dec	12-Feb-2010	http://www.lvrj.com/news/gaming-revenues-fall-by-biggest-percentage-ever-84117117.html ' rel='nofollow' target='_blank'> Casino revenues take plunge	HOWARD STUTZ
23	Nov	13-Jan-2010	http://www.lvrj.com/news/casino-gaming-income-grows-81305347.html ' rel='nofollow' target='_blank'> Casino gaming income grows	HOWARD STUTZ
22	Oct	10-Dec-2009	http://www.lvrj.com/news/breaking_news/Nevada-gaming-revenues-decline-116-percent-in-October-78962952.html ' rel='nofollow' target='_blank'> Nevada gaming revenues decline 11.6 percent in October	HOWARD STUTZ
21	Sep	11-Nov-2009	http://www.lvrj.com/business/state-showing-some-life-at-last-69740927.html ' rel='nofollow' target='_blank'> State showing some life at last	HOWARD STUTZ
20	Aug	9-Oct-2009	http://www.lvrj.com/business/august-drop-is-20th-straight-monthly-dip-but-analysts-see-positives-63835582.html ' rel='nofollow' target='_blank'> August drop is 20th straight monthly dip, but analysts see positives	HOWARD STUTZ
19	Jul	11-Sep-2009	http://www.lvrj.com/business/58935267.html ' rel='nofollow' target='_blank'> Revenue tumbles yet again	HOWARD STUTZ
18	Jun	12-Aug-2009	http://www.lvrj.com/business/53029242.html ' rel='nofollow' target='_blank'> Gaming revenue at 2004 level	HOWARD STUTZ
17	May	10-Jul-2009	http://www.lvrj.com/news/50460082.html ' rel='nofollow' target='_blank'> Gaming win has upside, downside	HOWARD STUTZ
16	Apr	6-Jun-2009	http://www.lvrj.com/news/47117757.html ' rel='nofollow' target='_blank'> Gaming revenues continue slump	HOWARD STUTZ
15	Mar	8-May-2009	http://www.lvrj.com/business/44579422.html ' rel='nofollow' target='_blank'> Edging closer to stability	HOWARD STUTZ
14	Feb	8-Apr-2009	http://www.lvrj.com/business/42656982.html ' rel='nofollow' target='_blank'> Casino revenue falls	HOWARD STUTZ
13	Jan 2009	11-Mar-2009	http://www.lvrj.com/business/41077932.html ' rel='nofollow' target='_blank'> Gaming revenue keeps sliding	HOWARD STUTZ
12	Dec	12-Feb-2009	http://www.lvrj.com/news/39483742.html ' rel='nofollow' target='_blank'> Annual gaming revenues suffer sharpest drop in state history	HOWARD STUTZ
11	Nov	9-Jan-2009	http://www.lvrj.com/news/breaking_news/37335099.html ' rel='nofollow' target='_blank'> Gaming revenue, visitor count continue to fall	HOWARD STUTZ
10	Oct	11-Dec-2008	http://www.lvrj.com/news/35952509.html ' rel='nofollow' target='_blank'> Gaming revenue dives again	HOWARD STUTZ
9	Sep	13-Nov-2008	http://www.lvrj.com/business/34385654.html ' rel='nofollow' target='_blank'> Gaming win heads down	HOWARD STUTZ
8	Aug	10-Oct-2008	http://www.lvrj.com/business/30737069.html ' rel='nofollow' target='_blank'> Eight months of declines put state's casino win at 2006 levels	HOWARD STUTZ
7	Jul	11-Sep-2008	http://www.lvrj.com/news/28232334.html?numComments=27 ' rel='nofollow' target='_blank'> Nevada is 'struggling,' may finish '08 poorly	HOWARD STUTZ
6	Jun	13-Aug-2008	http://www.lvrj.com/business/26861409.html ' rel='nofollow' target='_blank'> Latest decrease 'ain't bad'	B SPILLMAN
5	May	11-Jul-2008	http://www.lvrj.com/news/24444904.html ' rel='nofollow' target='_blank'> Gaming tax collections sink	ED VOGEL and HOWARD STUTZ
4	Apr	12-Jun-2008	http://www.lvrj.com/business/19817134.html ' rel='nofollow' target='_blank'> Gaming revenues tumble again	HOWARD STUTZ
3	Mar	10-May-2008	Low and Behold	HOWARD STUTZ
2	Feb	10-Apr-2008	http://www.lvrj.com/business/17455964.html?numComments=13 ' rel='nofollow' target='_blank'> Funk and fear in February	HOWARD STUTZ
1	Jan 2008	8-Mar-2008	http://www.lvrj.com/business/16412321.html ' rel='nofollow' target='_blank'> State gaming win dips	HOWARD STUTZ

A game specific view for the strip of the recession was that Blackjack started off the recession by crashing for months #1 through #5, (it actually began two months earlier, but was generally obscured because slots were still increasing).

Blackjack was only joined by a drop in revenue for slots and the rest of the pit in month #6.

Baccarat was stable until month #9, and then crashed only for seven months #10 through #16 . It began recovering to pre-recession levels by month #23 and soared in months #24 & #25 with the opening of ARIA to record levels.

As of month #25 everything is still headed downward except for baccarat. Only blackjack has been consistently falling for the entire period and has last by far the greatest percentage of revenue.

Don't blame it all on the recession. Slots are competing with slot clubs in alternative states, they are now competing with online gaming. Slot jockeys are finding less of a reason to come to Nevada for their fix. Convention business is way down which may bring the casual gambler.

Blackjack seems to have it's own troubles. There is an undercurrent of dissatisfaction with the corporate alterations of the game. Statewide the level of blackjack play is now down to 1997 levels

Vegas is becoming increasingly reliant on baccarat. The base of players who participate in this game are much smaller than the general visitor to Vegas which is bad news to the mass market budget casinos (like Circus Circus). If this trend continues it seems as if some casino closings are inevitable.

While Baccarat has certainly peaked in the past six months and 21 is still on the decline, the graph below shows that Other Games, Craps, and Roulette still make up close to 20% of total revenue. Blackjack is down from about 15% pre-recession levels to about 12% today (down 20%). Whether you can attribute that to 6-5 and H-17 games I don't know. As noted in another post, Win% is down.

Bacarrat is up to about 30% of total revenue which represents about 100% increase over a year previous. Certainly, it is doubtful that this trend will continue and it looks like this trend has only occurred over the past six months. Is the increase in bacarrat revenue a function of the casinos offering new and major perks to their customers or it is natural growth.

Up until about June of last year, Slots were still making up 55% of total revenue which is constant from about January 2007. Slots has only been dropping precipitously in the last six months. Is this a function of the later stages of the recession as slot players stay away from Vegas as they no longer have money to play with? It kind of makes sense that as the recession deepens, people stop travelling and the ones that stop travelling first are the slot players. As well, it is unclear as to what is fueling growth of the Penny slots? Is it because the games are more popular, or are they just cheaper to play? People are leaving nickel and higher denomination slots in droves to play the penny games, so maybe there is a segment of the population who come to Vegas simply for the entertainment and to do some cheap gambling.

This may be a stupid question but do the stats for 21 include the variations such as Super Fun 21 and Spanish 21, or does it just cover blackjack.

I know it would make no sense, but thought I would ask to be sure.

Actually I don't know if Super Fun 21, Spanish 21, and Blackjack Switch are included under Blackjack. There is a category called 'other games" which may include these variations. I suspect not, because they have a different name. There was a strong movement to give 6:5 blackjack another name, but the gaming commission nixed the idea.

If you are going to do the games as a percentage of the overall take, just keep in mind that the overall gaming revenue has declined dramatically. For the Las Vegas strip revenue from games was $3.22 billion in Jan 2008 and $2.65 in Jan 2010.

From October 2007 to Jun 2008 (beginning) slots and most table games had only dropped by a fraction of a percent. Blackjack had already dropped by 6% in those eight months. But room rates and spending was already starting to weaken, and interest rates were starting to creep up destroying some of the profit.

I am quite interested by the correlation on the revenue graph between the BJ and Other Games lines. They seem to increase and decrease at similar rates. I was wondering if this is more to do with the type of player. If casual players play more BJ, the 21 variations (hence the above question), and carnival games, whereas more serious gamblers take the Baccarat, Craps and Roulette.

Roulette and Craps dont seem to vary much, which makes me think they appeal to consistent gamblers, whereas the deeper rise and fall of the BJ/Others seems to imply more casual interest.

I know this is going off on a slight tangent and I apologise.

I composed the chart below to show the contribution of Baccarat and "21" handles (Win / Win%) to the Year over Year Revenue figures for TABLE Games, taking the Blackjack numbers out of the Year over Year amounts then the Baccarat amounts. What the graph shows in general is how much a game has taken the Year over Year Handle numbers up and down.

During 2007, "21" led the year over year growth by about 5% (standard deviation of 17%) while Bacarrat lagged year over year growth by 1.49% (sd = 35%). Bacarrat was quite volatile.

During 2008, "21" still had a 2.3% growth (SD 10.70%) while Bacarrat grew by 10.70% over YoY growth (SD=22%). You can see that around November 2008, Bacarrat takes over growth while "21" lags (February 2009 was the only exception when "21" contracted by 28% but Baccarrat was off by 50%. (Year over year contracted by 37%).

For 2009, "21" had a 26.3% contraction (SD 16%) while Baccarat grew by 38.9% over YoY growth (SD = 39%).

Even though "21" is off on the strip, it remained flat in 2008 and 2007 compared to other games and was constant with the year over year growth figures. 2009 was the year that 21 suffered severely while Baccarat took over.

If the proliferation of 6-5 games and bad reasons were the reason for 21's demise, you would have seen the Year over Year revenue contribution steadily drop but that isn't the case. Therefore the reason for 21's demise is purely, I feel, the recession.

These numbers are for HANDLEs ($Win / % Win) for the Strip casinos only. The source of the data is the Nevada Gaming Commission.



Here is the same chart looking at the Revenue contribution of 21 and Baccarat to the Year over Year revenue figures. Results are similar, with more variance.



I am certain that 21 would include all of the variants of Blackjack, including Switch, Spanish and 6-5.

Quote: boymimbo

Bacarrat is up to about 30% of total revenue which represents about 100% increase over a year previous. Certainly, it is doubtful that this trend will continue and it looks like this trend has only occurred over the past six months. Is the increase in bacarrat revenue a function of the casinos offering new and major perks to their customers or it is natural growth.

I suspect that it is not accidental. In August of 2009 the Baccarat handle was larger than every other game combined. There was no fight, special event or Chinese New Year. I assume that the big four are trying to get healthy by a prolonged concerted effort to seek out baccarat players. They make no secret that in general these are the new whales. Since it is impossible to get any statistics and the casinos are very close mouthed it leads to speculation.

I asked the Las Vegas Sun times reporter if she had any insight into how much money is made in the special gaming suites in the Encore and Palazzo that are separate from the main casino. She did not as that is very closely guarded secret. But we assume that the big play is all baccarat.

It is difficult to even find a picture of the Sky casino in Las Vegas, but here is a picture of the one in Macau.

Quote: boymimbo

As well, it is unclear as to what is fueling growth of the Penny slots? Is it because the games are more popular, or are they just cheaper to play? People are leaving nickel and higher denomination slots in droves to play the penny games ...

I don't think there is a great mystery here. Penny slots win almost a third of the time you play if you do maximum lines. Almost two thirds of the time the win is actually a loss since the return is less than you put in. But the machine just keeps on singing and ringing and showing videos or funny cartoon characters. It is simple operant conditioning.

Some people just find dice and cards boring. A machine that sings all day is more entertaining than one that goes "plink plink". They are up to 21% of the machines on the strip and 23% of the machines in Nevada (except for the location with restricted licenses of up to 15 machines).

The charts that I posted above were erroneous and I have corrected them below. (I was subtracting the 21 handles from the YoY number to get the %. What I should have been doing is simply showing the difference in YoY Revenue without the games.



What the graph shows in general is how much a game has taken the Year over Year Handle numbers up and down.

YoY Handle Growth

Year	21 Handle	Bacarrat Handle
2007	1.75% (SD 5.55%)	-1.58% (SD 11.56%)
2008	0.85% (SD 4.31%)	2.70% (SD 5.71%)
2009	-9.74% (SD 5.36%)	10.85% (SD 8.45%)

What the graph shows in general is how much a game has taken the Year over Year Revenue numbers up and down.

Another interesting chart. The chart below shows the share of Slot Revenue as a percent of total revenue. What I like about this chart is that it shows a very linear trend.

The share of penny slots has been constantly going up from about 10% in January 2006 to about 24% today.
The share of nickel, quarter and dollar slots combined has been constantly declining from about 43% of revenue in January 2006 to the same as penny slots today.
The share of multi-denominational slots has increased from 35% to about 44%
Megabucks and Other slots are not included in this chart as their contributions are less than 5% each.

The number of units has mirrored the revenue share below. There are 11,228 penny slots on the strip in 2010 compared to 5,298 in January 2006, while the number of nickel, quarter, and dollar slots has declined from 27,903 to 14,264 in the same period. The number of multidenom slots has incrased from 19,342 to 23,040 in the same period.

With the higher win %s on the penny slots and the gravitational and evolution of these very entertaining games, it is no wonder. Slot makers are also replacing alot of the traditional single denomination slot machines with multidenominational ones which would explain its increase in share.

This once again is for Strip Casinos only.