There is no question any longer that regional casino markets are returning to health.
March gaming revenues, as reported in Fantini’s National Revenue Report, climbed 4.99 percent to $2.373 billion.
The results were impressive, in that:
• combined with February’s 4.1 percent advance, casinos enjoyed their best year-over-year comparisons since we began the revenue report more than three years ago;
• same-store sales jumped 1.04 percent, the first increase since October; and
• 13 of 18 reporting jurisdictions beat year-to-date comparisons.
And of the five states that did not, only Missouri is a mature market.
Delaware slot revenue plunged 13.65 percent, but its casinos face new regional competition. West Virginia same-store fell 4.37 percent, but it also is continuing to adjust to new regional competition. On an overall basis, West Virginia casino revenue jumped 12.23 percent.
Florida fell below its year-to-date rise of 15.69 percent, but its 13.63 percent increase over last March is still a healthy gain and reflects the continuing benefit of the lower tax rates on slot win and liberalized card club rules.
As before, New York and Pennsylvania continue to ramp up, though at the expense of neighboring jurisdictions such as Atlantic City and Delaware.
New York slot parlors won 11.38 percent more. Pennsylvania casino win jumped 34.66 percent thanks to the opening of SugarHouse in Philadelphia and the addition of table games. Results were a more modest -0.08 percent same-store.
The across-the-board results benefited multi-property companies. Growth among them:
• Churchill Downs 14.80%
• Ameristar Casinos 11.31%
• Delaware North 7.59%
• Penn National Gaming 6.65%
• Isle of Capri 4.92
• Peninsula Gaming 4.53%
• Boyd Gaming 2.54%
• Pinnacle Entertainment 1.94%
Note that Ameristar and Isle of Capri do not include their Mississippi properties, as the Magnolia State does not report individual properties.
If more proof was needed, earnings reports provided it. All the regional casinos showed strong profit growth as the long-promised kicker of reduced cost structure on even modest revenue increases proved itself.
Even MGM Resorts, the Las Vegas-central operator that has tried investors’ patience for so long, turned in EBITDA well beyond both analyst expectations and the company’s own guidance.
And even though stocks have risen significantly in the past year, the case can be made that we’re in the early stages of recovery, and they have a way to go.
End Of Recession
Of course, the good news could be upended if we double-dip into recession.
And there are serious bumps in the road, from the price of oil to some sense that companies are starting to contract spending in response.
Still, we see underlying strength that might take bigger hits to turn the economy back into a negative direction.
Indeed, the questions now aren’t where’s bottom or how do we stop the bleeding as much as do we slog or accelerate forward, or do we dip into another recession? And note, it’s another recession, not another Great Recession.
Perhaps the simplest way to illustrate the change is to note that worries about deflation have been replaced with worries about inflation.
So, in the springing of the year, with survival as assured as it can be in an uncertain world, if every boy’s heart turns to baseball, then every executive’s heart turns to growth.
Thus it is that people are looking at Penn National now as a growth story, not a balance-sheet survivor.
The latest edition of the Roth-Fantini Quarterly Slot Survey shows that Konami continues to gain share, that IGT has the top two lease game earnings, and that Bally increased ship share in the first quarter.
Among highlights of the latest survey of 157 North American gaming venues representing 172,000 machines:
• Konami continues to gain ground with 19 percent ship share, 15 points above its footprint and 6 percent above its trailing 12-month ship share.
• IGT ship share declined to 25 percent among the respondents, 4 percent less than its trailing 12-month share.
• WMS ship share of 24 percent was 2 percentage points below its 12-month average.
• Bally ship share rose one point to 16 percent with planned purchases of 17 percent.
• Aristocrat shipped 8 percent of games, 5 points below its existing footprint.
• Multimedia Games doubled its percentage from 1 to 2.
• IGT had two of the top four leased games with Wheel of Fortune regaining its lead over Sex and the City. They are followed by WMS’ Wizard of Oz and BYI’s Cash Spin.
• Top lease performers by company are IGT, cited by 44 percent of participants; Bally at 28 percent; and WMS at 17 percent.
• Bally leads picture-within-a-picture penetration with 31 percent for iVIEW and iVIEW DM. IGT is second at 25 percent for NexGen and sbX Media Manager. Aristocrat follows with 8 percent for Aristocrat Sentinel.
The full survey includes a variety of other information, such as purchase plans, participation vs. owned games, systems share and more.
It is available to Fantini Gaming Report subscribers for just $299 a year and $499 for non-subscribers. Individual copies also are available at www.fantiniresearch.com.