Record returns on Baccarat on the Vegas strip

Baccarat slaughtered its all time monthly return and made $205 million in Baccarat in February on the strip (up from 57.7 million last February). That means a collective drop of about $10 million in all other sources of gaming. The previous record was $140 million in December.

The gaming board said win from
Blackjack on the Strip fell 6.4 percent
craps grew 4 percent and
roulette jumped 59.7 percent
Keno was off 10.9 percent
Pai Gow winnings increased 114.3 percent
sports books posted an 11.3 percent gain
slot win statewide fell by 7 percent.

The gaming revenue jumped a massive 33% on the strip. Not surprising since all the pit games and poker was only $200 million last February.

The win percentage seems to have hit an all time high of 17% indicating that people were either very unlucky or they were playing for a long time.

All other geographic regions of Clark County dropped. Baccarat is a minor part of gaming off the strip.

See my blog for an article and charts showing how Baccarat has displaced blackjack and other games of chance in this recession on the strip.

it would be interesting to know the actual figures for all of these games. i wonder how much slot wins falling by 7 percent is.

Quote: rudeboyoi

it would be interesting to know the actual figures for all of these games. i wonder how much slot wins falling by 7 percent is.

There are 171K slot machines in Nevada in unrestricted gambling locations. Last February they made $559.58 million, so which is $3,271 on average per machine. Slots dropped 7% which is about $39 million overall or roughly $230 per machine for the month.

There is an additional 15K slot machines in what are considered to be restricted locations which have a maximum of 15 slot machines. These are mostly bars, convenience stores, drug stores, gas stations, some restaurants, transit stops, etc. These are not reported in the above averages, but data is collected every 90 days.

Slots still represent 2/3 of the gaming revenue statewide, but are rapidly dropping below half on the Las Vegas strip. Traditionally a slot machine in Nevada makes as much or more gross revenue as a hotel room, but much more profit. Logic said if you build a hotel room and the guest plays a slot machine you come out ahead. This building boom in hotel rooms has resulted in a room for every 14 residents of Nevada (as opposed to for every 66 residents in the USA). Not even Hawaii comes close to this ratio, but upwards of 50K rooms could be sitting empty on a weeknight during a slow month.

The sheer numbers of slot machines around the country are making it less attractive to go to Nevada simply to play slots. Indeed almost all games are way down, except baccarat. Mini-baccarat was a normal sized table game that was supposed to attract small time baccarat players. It features the same mathematical odds as full sized baccarat. Unfortunately it doesn't permit some of the superstitious behavior that, in particular, Asian players are obsessed with. This includes bending, folding and/or tearing the cards as they are played. A small table with limited bets simply can't throw away a thousand decks of cards in a week. So the baccarat obsession seems to be pretty much a Vegas thing. There are actually quite a lot of mini-baccarat tables in Atlantic City, but there is no equivalent boom.

This take of $205 million on the Vegas strip for baccarat is truly record setting. In contrast, all of the pit games combined including sports, race, and poker made $200 million last February for the strip casinos.

The hunt for the Asian gambler has now taken on epic proportions. Although all of the major Vegas corporations are now vested in Macau, they still want to bring the biggest whales to Vegas where the tax rates are much lower.

There is a bit of backlash as Vegas corporations are systematically trying to hunt the Asian American gambler. Much like the backlash when cigarette companies began targeting African Americans, or blue collar women in particular.

Quote: pacomartin

Baccarat is a minor part of gaming off the strip.
Baccarat has displaced blackjack and other games of chance in this recession on the strip.

Is it true that Baccarat means Asian or DotCom millionaire?

They just posted the slot numbers. Baccarat on the strip got within 1.5% of slots for the month of February, which is absolutely unprecedented.

Great analysis, Frank.

It shows that some of the casinos have the availability to adapt.

My guess is that Wynn and Sands (Venetian, Palazzo) with operations in Macau is transferring their high end VIPs from China to Vegas. Because 39% of gaming win goes to the Macau government while 6.75% of gaming win goes to Nevada, casinos have a GREAT INTEREST of moving their Macau business to Vegas as they receive a 32% premium on gaming revenue. My feeling is that as the relationships between the VIPs in Macau grew with both the Sands and Wynn becoming familiar with gaming operations there, they wooed their higher end VIPs to come to Vegas. It's a win-win: the higher end VIPS get an expanded perk of getting the high roller treatment in Vegas, while the casinos reap much lower tax rate on its revenue and could easily afford to expand the perks to them. With the recession, Wynn and Sands were probably more apt to take this gamble (as there was no guarantee that these VIPS would take the perk or lose while they were in Vegas) but gamble they did, and they did well.

As well, the Macau VIP system works quite differently than Nevada, in that the majority of VIPs coming to Macau are handled through outside promoters who are paid substantial commissions and "dead chips" to bring the VIPs to the casino. As at the end of 2007, 67% of Macau's total revenue came from VIPs. When the Wynn broke ground in Macau they forced the Chinese government to allow casinos in Macau to extend its own credit to customers, thus paving the way to avoid the VIP promoter and to market directly to customers themselves.

Finally, with the substantial growth in the Chinese economy even throughout the recession, there are a great deal of Asian gamblers who can afford to play.

I think it is the driving forces above that are driving the growth in Baccarat revenue, not necessarily the American-Asian gambler.

What would be interesting to see (but we probably won't) is MGM numbers for Baccarat (and in particular, the Bellagio) as they don't have any presence in Macau.

Quote: boymimbo

What would be interesting to see (but we probably won't) is MGM numbers for Baccarat (and in particular, the Bellagio) as they don't have any presence in Macau.

A fluke in the Gaming Commission reporting system allowed us to see the ARIA baccarat revenue for the month of December. The casino was open for 15 days and each of the 21 tables averaged $1 million per week. Those are unprecedented numbers. This reporting fluke only lasted for one month because the ARIA was reported as a small hotel because it had no previous gaming revenue. Even in February the strip tables only averaged $180K per week.

I am sure that a lot of this baccarat revenue is going to the high end at MGM MIRAGE, and some is also going to Ceasars. MGM says verbally that they are getting high baccarat returns in their quarterly report, but they are not showing hard numbers. Even Hard Rock expanded and remodeled their casino in an attempt to get baccarat revenue (but it doesn't seem to be working very well).

Actually slightly less money was changed in February as December ($1.2 billion vs $1.3 billion), but the win percent was 17.04% in February. Although I expect baccarat to be more volatile in win percentage than other games (fewer players, and larger bets), the highest win percentage I've seen in five years was 15%, and the average is about 11.6%.

I am a little surprised that the win percentage went to that extreme. People must have been playing for long periods of time to grind away their bankroll like that.

Anyway slots keep plunging and hit a new low of $208m in February. With baccarat soaring to $205m they almost crossed. The gaming world on the strip is changing radically. Just a few years ago slots were more than triple baccarat.

Quote: boymimbo

My guess is that Wynn and Sands (Venetian, Palazzo) with operations in Macau is transferring their high end VIPs from China to Vegas. Because 39% of gaming win goes to the Macau government while 6.75% of gaming win goes to Nevada, casinos have a GREAT INTEREST of moving their Macau business to Vegas

Its also relatively easy to accomplish since in Asia high rollers are often members of groups represented by a point-man who handles all negotiations. Its sort of the same role that used to be played in the USA by junket organizers.

Note: IF the casinos are indeed buying Asian High Rollers, where would the accountants put the fees that are paid? It may mean that the win figures are deceptive because Comps for Bacc players have gone through the roof.

Pacomartin, or anyone else, can you explain to me win percantage calculations (or more specifically win vs drop). I've reviewed the Indiana numbers the IGC reports monthly and they offer the Drop and Win $ totals. I assume win % is just Win/Drop. But how are those calculated? Is 'drop' the amount of chips that were bought at the table?

The win percent is the percentage of the drop that the house keeps. If a player gambled all of his chips one time, then you would expect the win percent to be the same as the house advantage. But since the player gambles his chips several times, the win percent is always higher than the house average.


The smaller the pool of people and/or if some of the bets are very large, the win percentage can be fairly volatile. For slot machines it is relatively stable. These huge numbers for baccarat are relatively new and have been very volatile. Win percentages of 11.6% have been the average, but February's win percentage of 17% was far and away the largest in years. In addition the drop was very large $1.2 billion. The combination was a record breaking $205 million in gross revenue in one month. The very large win percentage must mean that people played for a long time, or were very unlucky.

Strip revenue can be further subdivided into casinos that make over $72 million in the fiscal year, and those that make under $72 million. The smaller casinos only made 7% of the strip revenue, but they are more dependent on slot machines.

Feb 2010

Casinos over $72 million/year
Baccarat	$204.572 million
Slots	$179.457 million

Casinos under $72 million/year
Baccarat	$0.46 million
Slots	$28.48 million

So you see that Baccarat out-earned slots for the major casinos.