BAC: Gaming

LV Strip revenues +21% in Aug; Nevada up +12% LV Strip gaming revs increased 21% Y/Y in Aug vs. unchanged in July. Revs are now trending +10% in 3Q (vs. -5% in 2Q) and +4.5% YTD. The Aug comp of -9% was more difficult than June/July’s -15%/-11%, so on a 2-yr stacked basis, Strip revs increased +12% vs. -11% in July. There were no special events in August, and the calendar had one fewer weekend day in Aug ’10 vs. ’09. July ’10 ended on a weekend, so some TITO slot revs were pushed forward into Aug, which we est. benefited Aug. ’10 to the tune of $9M or 2% of LV Strip revenue growth.

Highest Baccarat drop in LV history

Aug’s $1.9B baccarat drop was the highest in LV history and +87% Y/Y, outpacing the previous record in Dec ’09 of $1.3B. Despite hold ~400 bps below LT average, baccarat win of $160M was the second highest ever, growing +47% Y/Y on a difficult +49% year ago comparison. Aug is typically a strong month for baccarat in LV/Macau and we would expect strong trends to continue into September and October (which could be helped by Golden Week).

Slots remain sluggish; signs of life at the tables

Despite the growth in slot win, slot “coin in” or handle was still down -1% in Aug., so our preferred measure of the health of same store play still remains under pressure. On a 2-yr stack, slot handle was down -22% in Aug vs. -18% in July and -23% in June. Core non-baccarat table drop improved for the third consecutive month to +7% in Aug. (vs. +12% in July) on an easy -24% comp. Aug ’10 was the first month in which statewide core table win improved Y/Y since Dec ’07.

Las Vegas Locals positive in Aug; up +3%

LV Locals revs improved to +3% in Aug vs. -16% in July and -5% in June. Slot handle declined -4% vs. -5% in July and -9% in June while table drop was -1% vs. -4% in July and +2% in June, so better win-hold drove some of this improvement. By market: North LV was up +14%, Boulder Strip was +3% and Balance of County was up +1% so all showed improvement. Having one less Saturday had a disproportionate impact on the Locals mkt given its heavy weekend skew.

LV RevPAR +3%, visitation +3.5% on strong convention

Strip hotel RevPAR was +3% driven mostly by ADR (+4.0%) as occupancy was still weighed down by new supply. This is the 3rd straight month of RevPAR growth, with Q3 RevPAR trending at +3%. 3.2M people visited LV in Aug, up 3.5% Y/Y. Convention attendance was +50% Y/Y, driven by MAGIC/World Market Center shows (75K/50K attendees, respectively) falling in Aug ’10 vs. Sept ’09.

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