When Nevada gaming revenue reports are released each month, all eyes are on the Strip and how much money its megaresorts won or lost. Hundreds of millions of dollars hang in the balance.
But when April’s numbers came out last week, it was downtown’s revenues that raised more than a few eyebrows. Downtown’s casinos raked in more than $48 million, a nearly 25 percent jump over April 2011.
Gaming operators rejoiced the sudden turnabout of fortune, though seasoned analysts warned the numbers may not be as robust as they seem.
Downtown gaming revenues began picking up last year, reversing a decade of steep decline. But April’s number is artificially high due to an almost 8 percent slot machine hold, the result of the “Friday effect,” said David G. Schwartz, director of the University of Nevada, Las Vegas’ Center for Gaming Research.
Slot machine handle is immediately reported to the Nevada Gaming Control Board, but win is tallied manually. When months end on a weekend, as did March, numbers are reported early to avoid disrupting the casino floor. The last few days of March were rolled into April, which caused a 12 percent drop in gaming revenues in March and April’s 25 percent spike.
Downtown is seeing revenue increases — just not a 25 percent leap that might tempt casino operators to start thinking big, Schwartz said.
“I think (downtown operators) should still be cautious. They shouldn’t build something huge. But it looks like what they’re doing is paying off,” Schwartz said.
The growth of gaming revenue downtown over the past four months is outpacing the Strip at 8.9 percent on average versus 5.7 percent.
Downtown casino owners say they are also seeing more visitors this year, though growth is difficult to gauge because the Las Vegas Convention and Visitors Authority doesn’t track downtown visitation on a monthly basis.
Online gaming launch
Fertitta Interactive LLC on Tuesday announced it will launch its real-money and social gaming company, Ultimate Gaming, an online gaming business it has been developing since its October acquisition of CyberArts Licensing LLC.
“We view it as a global opportunity,” Tom Breitling, chairman of Fertitta Interactive, said during an hourlong presentation. “We believe the timing is right to enter the world of online gaming, so we are doing so with Ultimate Gaming.”
Breitling said its free-play poker game, Ultimate Poker, will be released Friday on Facebook, with a promotional campaign to begin July 7 during Ultimate Fighting Championship 148, a pay-per-view event.
He said Ultimate Gaming is UFC’s official online gaming sponsor.
The Las Vegas-based company will launch real money poker in Nevada as soon as state gaming regulators approve pending manufacturer, service provider and operator licenses, Breitling said. That should be by the end of the year, he said.
Las Vegas-based Pinnacle Entertainment, which is owed $2 million by the bankrupt Federated Sports + Entertainment, said Friday it acquired the company and its two poker businesses, the Epic Poker League and Heartland Poker Tour.
Pinnacle, which operates six casinos in St. Louis, Louisiana and Indiana, and a racetrack in Ohio, did not reveal a purchase price for the transaction. The casino operator said it will take over all of Federated’s assets and its intellectual property.
Bluff Magazine reported on its website that a Pinnacle-controlled company submitted a winning bid of $4.5 million for the Federated assets at a bankruptcy auction in Maryland on Wednesday.
MGM suffers setback in Maryland
MGM Resorts International’s proposed $800 million hotel-casino complex in suburban Maryland suffered a severe setback Wednesday as a state working group failed to reach agreement on gaming expansion.
The issue could be revived in a July 9 special legislative session or through a ballot measure in November, but the collapse of negotiations is a blow to MGM Resorts’ planned development at National Harbor in Prince George’s County, about 10 miles from the Capitol.
The working group appointed by Gov. Martin O’Malley had two major issues to discuss: adding a sixth gaming license though only three of five planned casinos are operating, and cutting the state’s industry-high 67 percent tax on gross gaming revenues.
“As Maryland residents, we are not all that surprised by the panel’s inability to reach a consensus,” said Stifel Nicolaus Capital Markets analyst Steven Wieczynski, who is based in Baltimore. “Looking ahead, we believe (the) news likely marks a delay of the inevitable, as we expect legislators to revisit the issues in January.”
Gaming Control Board approves equipment testers
The Gaming Control Board Thursday approved Gaming Laboratories International and BMM International as the state’s first independent testing laboratories to certify gaming equipment for use in Nevada casinos.
Approval followed a comprehensive investigation by gaming control agents.
Gaming Control Board Chairman Mark Lipparelli said registered testing labs will allow the state to expand its resource base with respect to new technologies.
The agency’s technology division will now focus on establishing policy, certifying the labs and staying ahead of tech trends.
Dispute returns to court
Wynn Resorts Ltd. on Thursday won its bid to return its legal dispute with former largest investor Kazuo Okada to state court, but with the possibility that two pending cases will become three.
After an hourlong hearing, U.S. District Court Judge Larry Hicks ruled that the case hinged on interpretation of Nevada law and did not fall within federal jurisdiction. In doing so, he turned aside the arguments by attorneys for Okada entities Aruze USA Inc. and Universal Entertainment Corp. who said Wynn’s case rose or fell on the federal Foreign Corrupt Practices Act.