Nevada’s billion-dollar gaming revenue streak continues; August results boosted by reopened showrooms and attractions

Mask mandates to enter Nevada’s casinos, showrooms and other entertainment venues weren’t a detriment to the state’s gaming industry.

Casinos rocketed to their sixth-straight $1 billion gaming revenue month in August and put Nevada on pace to crack the $12 billion annual revenue figure casinos statewide have reached just three times, the last being in 2019.

Even the Las Vegas Strip, which has trailed the state percentage totals for much of 2021, is now just less than 1 percent behind its 2019 figure, thanks to a second-straight month in which gaming revenues were 20 percent above 2019 totals.

“The result was above our estimate,” Deutsche Bank gaming analyst Carlo Santarelli told investors in a research note.

The Gaming Control Board said Thursday gaming revenues statewide topped $1.165 billion during August, a 22.3 percent increase over pre-pandemic August 2019. Analysts are not using comparisons to 2020 after COVID-19 caused a 78-day shutdown of gaming in Nevada and operating restrictions disrupted the gaming industry through much of the year.

The $1 billion per month streak, which began in March, is the state’s second longest in 14 years. Nevada casinos collected $1 billion or more in gaming revenues for eight straight months between November 2006 and May 2007.

The August totals followed a July that brought Nevada’s largest single-month gaming total of all time — $1.36 billion.

On the Strip, casinos recorded nearly $625.7 million in gaming revenue, which trailed July’s single-month record of $793.7 million. Downtown Las Vegas casinos saw nearly $64.2 million in gaming revenues during August, and the area is up 23.2 percent for the calendar year compared to 2019.

Resorts World Las Vegas on the Strip and Circa in downtown Las Vegas were not open in 2019.

Wells Fargo gaming analyst Daniel Politzer said the Strip’s good fortune carried into the Las Vegas locals market, which also gained some “calendar benefit” with August beginning on a Sunday. That allowed slot machine revenues from many casino operators from the last day of July to be counted in the August totals.

Gaming revenues from the neighborhood casino areas in unincorporated Clark County and Henderson are trending ahead of 2019 overall totals.

“We view these results as strong and supportive of our positive view on the fundamentals on the Las Vegas Strip and Las Vegas Locals gaming markets,” Politzer wrote in a research note.

Macquarie Securities gaming analyst Chad Beynon told investors he continues to believe that Strip gaming numbers will continue to trend above 2019 levels. He cited his investor meeting last month with MGM Resorts International Chief Financial Officer Jonathan Halkyard, who said increased group business would provide the market an additional boost.

“We still support our view that Las Vegas Strip revenues can return to (their) prior peak in 2022, benefitting from non-gaming growth,” Beynon said, citing the openings of Allegiant Stadium, new convention space at the Caesars Forum Conference Center and an expansion of meeting space at Wynn Las Vegas.

Gaming Control Board Senior Economic Analyst Michael Lawton credited several special events during August for the gaming figures.

The United States played Mexico in the 2021 CONACAF Gold Cup final on Aug. 1 at Allegiant Stadium, and two Cirque Du Soleil shows returned to the Las Vegas Strip – Michael Jackson One at Mandalay Bay on Aug. 19 and The Beatles Love show at The Mirage on Aug. 26. Manny Pacquiao fought Yordenis Ugás in a welterweight boxing match at T-Mobile Arena on Aug. 21, and rock group Guns N’ Roses performed at Allegiant Stadium on Aug. 27.

“Strong demand across markets, federal stimulus, the continued rebound of leisure travel and the return of special events and entertainment continued to propel gaming past 2019 levels,” Lawton said.

Las Vegas visitation dips

The Las Vegas Convention and Visitors Authority (LVCVA) said visitation to Southern Nevada “receded” from the market’s pandemic-era peak in July because of a spike in COVID-19 cases caused by the Delta variant. Clark County was hit early and hard by the latest wave of the virus.

Visitation was just under 3 million for August, according to the LVCVA, a decline of 9.2 percent from July’s 3.3 million visitors and down 16.2 percent from nearly 3.6 million visitors in August 2019.

Still, hotel occupancy hit 72.9 percent for the month with weekend occupancy at 87.1 percent. August’s average daily hotel room rate of $140.32 was down nearly 8 percent from July; the LVCVA said the figure was the second highest monthly mark since the pandemic began in March 2020.

LED signs of the Hard Rock and Montbleu Hotels thank first responders in the Stateline area of South Lake Tahoe on Sept. 1, 2021. (Christian Monterrosa / The Nevada Independent)

Northern Nevada issues

Lawton said the Caldor Fire, which shut down gaming in South Lake Tahoe over Labor Day weekend, slowed activity in both the North Lake Tahoe and South Lake Tahoe gaming markets toward the end of August. Highway 50 was closed on Aug. 22 because of the fire, which disrupted visitation from the Bay Area and Sacramento in the Tahoe region.

North Lake Tahoe gaming revenues were $2.5 million during the month, a decline of 6 percent compared to August 2019. South Lake Tahoe revenue of $23.7 million was a decline of less than 1 percent, driven primarily by the timing of slot machine revenue collections.

For the calendar year, North Lake Tahoe casino revenues are up 11.2 percent and South Lake Tahoe is up 2.9 percent compared to the first eight months of 2019.

Lawton suggested Washoe County may also have experienced some disruption at the end of August because of the residual smoke and highway’s shutdown. The market, which includes Reno and Sparks, produced $90.5 million in gaming revenue, an increase of just 4.3 percent from August 2019. Visitation in Northern Nevada fell 4.9 percent compared to July, which had one extra weekend.

Other statewide gaming highlights  

Baccarat wagering during August didn’t have the impact the game had in July when revenue from the game increased more than 100 percent. Baccarat topped $93.1 million in August, 5.6 percent below the August 2019 total. Wagering on the game was $610.7 million, a decline of 7 percent compared to August 2019.

The state’s sportsbooks collected $14.3 million in revenue and took in more than $427 million in sports wagers during August. Both figures were double-digit declines compared to a year ago,an anomaly because the NBA Finals took place in August 2020 because of the pandemic.

Compared with August 2019, sportsbook revenues were down 23.4 percent and wagers were up 48.5 percent. Lawton said Nevada sportsbooks won just 3.35 percent of all wagers placed during the month.

Meanwhile, for the first eight months of 2021, sports betting revenues are up 57.4 percent and wagers have increased 36.7 percent compared to 2019.

Lawton said more than 69 percent of all Nevada sports wagers were placed on mobile apps in August.

A woman wears a protection mask at McCarran International Airport on Thursday, March 12, 2020. Jeff Scheid/The Nevada Independent)

Las Vegas airport traffic slows in August

McCarran International Airport saw more than 3.8 million passengers during August, down 8.3 percent from July. However, the airport’s international passenger total of 79,275 during the month once again showed a steady increase since the pandemic halted direct flights to and from 11 countries.

The passenger count was 14.1 percent below the pre-pandemic 4.4 million passengers in August 2019. For the first eight months of 2021, McCarran has seen almost 23.2 million passengers, 30.1 percent below the same time period of 2019.

The international total, a 76.4 percent drop compared to August 2019, included flights from just Mexico and Canada, but included nearly 15,000 more international travelers compared with July. McCarran saw more than 3.8 million international travelers in 2019, an average of more 316,000 passengers per month.

Analysts have pointed to the lack of direct international visitors into Las Vegas, which has been hampered because of pandemic related travel restrictions, as a missing component to visitation and gaming totals.

A week ago, the White House announced opened travel to the U.S. for all vaccinated foreign nationals starting in early November, including those currently affected by the U.S. travel ban.

Station Casinos facing disciplinary action for accepting post-game sports wagers

The Gaming Control Board is seeking to impose a yet-to-be-determined fine or other disciplinary action on Station Casinos after the company’s sportsbook inside Red Rock Resort accepted approximately 348 wagers on events with already known outcomes.

The problematic bets took place over a three-year period.

In a two-count complaint filed Sept. 13, the Control Board said that when the company reported an issue to regulators on March 18, it blamed a computer malfunction caused by “insufficient server memory” for its Stadium Live sports wagering program. Three times in prior years, once in 2018 and twice in 2019, the Control Board issued sports wagering regulation violation letters to Red Rock Resort.

According to the complaint, Station Casinos said the recent malfunction caused the Red Rock Resort sportsbook to issue 167 wagering tickets, which were later voided with the bets being refunded.

However, the Control Board said the company was already “well aware of prior computer errors related” to the Stadium Live program.

According to the complaint, gaming regulators told the sportsbook operators they needed to have a “redundant monitoring process” in place to ensure wagers were not accepted on events where the outcome has been determined. 

The Control Board said the company failed to ensure that process was in place

“Respondents are responsible for any violation related to the Stadium Live program,” the Control Board wrote in the complaint. “Toleration of such repeated violations constitutes ground for license revocation or other disciplinary action.”

The complaint was signed by all three board members.

A spokesman for Station Casinos declined comment on the complaint.

A hearing date for the Nevada Gaming Commission has not been determined. Station Casinos and the Control Board can still reach a stipulated settlement to avoid a hearing.

In recent months, Station Casinos has been running an advertising campaign for its STN Sports app featuring Instagram comedian Matt Cutshall.

In 2018, sportsbook operator CG Technology paid a $2 million fine – $1.75 million in penalties and $250,000 to the Nevada Council on Problem Gaming – to settle a four-count complaint filed by the Control Board. One of the counts involved accepting bets on games and events that had already concluded.

Record-setting July gaming numbers fueled by special events and pent-up demand

From Garth Brooks to Colin McGregor to Usher, the Strip welcomed a return of headliners and special events during July.

Las Vegas visitors didn’t just spend money on high-priced event tickets. Some of the Benjamins landed on gaming tables and inside slot machines.

The result was the Strip’s largest ever single-month revenue total as casinos reported $793.7 million during the month, the Nevada Gaming Control Board said Thursday. The total was 46.2 percent higher than July 2019 and blew well past the previous single-month mark of $696.1 million recorded in February 2013.

The figure helped propel the state to nearly $1.36 billion in gaming revenue during July, the fifth straight month of $1 billion or more in gaming revenue — eclipsing the previous single-month record (in May) of $1.23 billion. The last time Nevada saw five consecutive months of $1 billion or more in gaming revenue was December 2007 through April 2008.

The Strip also saw more than 3.3 million visitors during the month, according to the Las Vegas Convention and Visitors Authority. The figure was the market’s highest single-month total since the pandemic dampened tourism visitation in March 2020.

Macquarie Securities gaming analyst Chad Beynon said in a research note said July’s record gaming revenues came “with little to no convention or group business.”

Earlier this month, Beynon hosted a talk between MGM Resorts International Chief Financial Officer Jonathan Halkyard and Macquarie clients. MGM Resorts operates 10 resorts on the Strip, and Halkyard said at the meeting that the company expects to return to pre-pandemic revenue levels by the middle of 2022.

Halkyard added that he expects all Las Vegas casino operators to report record July numbers.

The Strip wasn’t alone in fueling record state gaming revenue. July revenues of $100 million collected by Washoe County casinos were the highest single-month figure for the Northern Nevada market since August 2002. Elko County saw revenues of $34.2 million, eclipsing its previous single month record recorded in March.

Gaming analysts have offered comparisons to 2020, when the pandemic closed casinos statewide for 78 days, and COVID-19 operating restrictions and health and safety protocols sent Nevada's gaming industry plummeting to its lowest single-month revenue total since 1997.

The bulk of the July gaming revenue came in ahead of the Control Board reimposing a mask mandate on casinos on July 30 that required facial coverings be worn by employees and customers regardless of vaccination status.

For the first seven months of 2021, statewide gaming revenues are up 5.8 percent compared to 2019 when Nevada recorded $12 billion in gaming revenue for only the third time in its history.

The record total didn’t help the Strip’s overall number, though; gaming revenues there are down 3.47 percent compared to the first seven months of 2019. Washoe County gaming revenues are up 23 percent compared to 2019, while Las Vegas locals market casinos are up 16.1 percent over 2019.

Strong July calendar

Control Board Senior Economic Analyst Michael Lawton called July “the perfect storm” for gaming revenues on the Strip because it included five weekends, the Fourth of July holiday and the first full month of operations from the $4.3 billion Resorts World Las Vegas, which opened on June 24 and is the Strip’s first all-new megaresort in more than a decade.

Among the special events during the month were a concert by country music’s Garth Brooks at Allegiant Stadium on July 10, along with UFC 264, also on July 10, featuring Conor McGregor versus Dustin Poirier. Lawton also noted the CONCACAF Gold Cup at Allegiant Stadium, played on Sunday, Aug. 1, between Mexico and the U.S., saying the weekend of visitation from soccer fans boosted the July numbers.

The month also included the return of Cirque Du Soleil’s “O” show to the Bellagio on July 1, Bruno Mars’ residency coming back to the Park MGM on July 3 and the opening of Usher’s residency at Caesars Palace on July 10.

The special events, as well as visitation to Resorts World, fueled high-end baccarat play with unusually active numbers for July. Revenues from the game topped $160.1 million, an increase of 107.3 percent compared to July 2019. Wagering was up 26.3 percent to $809.9 million. The casinos’ hold percentage on the game was an uncommon 19.77 percent compared to 12.03 percent in July 2019.

Lawton said other contributing factors to the Strip’s record-setting month included a return of leisure travel, fewer COVID-19 cases early in the summer and increased discretionary spending driven by aid from the federal stimulus package.

Strip casinos' slot machines were active during July as gamblers wagered $4.8 billion on the games, breaking a 14-year-old single-month record for volume. The activity resulted in slot revenues of $459.6 million, a 6.4 percent increase over July 2019 and the largest single-month slot machine revenue ever on the Strip, eclipsing last month’s $363.7 million.

A man with his dog travel on the Las Vegas Strip on Saturday, March 27, 2021. (Jeff Scheid/The Nevada Independent)

Filling the rooms

The LVCVA said July’s 3.3 million visitors was 11.2 percent higher than June, but down 10.4 percent from July 2019. Hotel occupancy exceeded 79 percent in July with an 88.1 percent occupancy rate on weekends.

For the first seven months of the year, visitor volume is nearly 16.8 million, down 32.4 percent from the same point in 2019.

Southern Nevada’s average daily room rate was $152 in July, a 19 percent increase over May. LVCVA Vice President of Research Kevin Bagger said revenue per available room, a financial indicator, exceeded the 2019 comparable levels for the first time in more than a year, hitting an average of $120.79.

Beynon, however, told investors Thursday that Las Vegas’ convention business, which generally accounts for roughly 20 percent of all room nights, is close to non-existent.

“We believe any revenues from group and convention in 2021 is considered ‘gravy’ for the numbers,” Beynon said. “Given the convention slate, we believe the demand will be there (in 2022) should COVID permit the schedule.”

Sports betting

The Nevada sports betting industry continued its scorching pace in July with revenues of $33.3 million on wagers of $409.9 million. The figures were both all-time records for the month.

For the first seven months of 2021, sportsbooks are well ahead of the 2019 record year when the state saw $5.319 billion in wagers and $329.1 million in revenues. The Control Board said sports betting wagers are 35.5 percent over 2019 and revenues are up 68 percent.

Wagers placed through mobile apps accounted for 59 percent of July’s overall total.

Oh Canada

McCarran International Airport recorded its busiest month since January 2020 with more than 4.15 million passengers arriving and departing during July. The figure was a 7.9 percent decrease from July 2019.

In the first seven months of the year, McCarran's total passenger volume was nearly 20.1 million, down 32.5 percent from 2019.

International airline traffic had its busiest month since the pandemic began last year, recording more than 64,000 passengers which included direct flights from two countries, Mexico and Canada.

WestJet accounted for nearly 3,500 passengers of the monthly figure, adding flights to and from Vancouver, British Columbia and Calgary. The rest of the passenger volume was composed of flights to and from Mexico.

A McCarran spokesman said WestJet and Air Canada added Las Vegas flights to and from Toronto during August.

Small casino and tavern operators caution Nevada regulators about expanding online gaming

A cross-section of Nevada gaming operators has voiced opposition to expanding the state’s online gaming regulations, saying any proposed changes should be explored by the governor’s Gaming Policy Committee and ultimately approved by state lawmakers.

In a four-page letter sent last week to the chairmen of the Nevada Gaming Control Board and Nevada Gaming Commission, nearly 30 small casino owners, tavern operators and CEOs outlined reasons they believe online gaming would damage their business operations.

The letter originated in the corporate offices of Red Rock Resorts and is viewed by its signers as a preemptive measure even as regulators have delayed any plans to change the state’s online gaming guidelines as spelled out in Gaming Regulation 5A.

Red Rock Resorts CEO Frank Fertitta III and Vice Chairman Lorenzo Fertitta, whose company operates the Station Casinos properties throughout the Las Vegas Valley, signed the letter.

A company spokesman declined to comment on the letter. Station Casinos backed Ultimate Poker, Nevada’s online power website. The business folded after 19 months after falling short of projections.

“We want there to be a discussion, not just throw the doors open,” said Andrew Diss, vice president of government affairs for Meruelo Gaming, the company that owns the Grand Sierra in Reno and the Sahara in Las Vegas. Meruelo Gaming CEO Alex Meruelo was one of the executives who signed the letter.

Diss was the only representative from any of the companies listed as signers who would comment publicly. He said the group believes any changes concerning online gaming expansion are policy matters.

“We believe (the Gaming Policy Committee) is the proper venue,” Diss said.

In the letter, gaming executives wrote, “We strongly oppose any expansion of online gaming in Nevada. In your potential consideration of online gaming, we ask that you are deliberate in determining if online gaming is needed to grow Nevada’s economy, helpful to our local communities and consistent with our long-established regulatory framework.”

Among the concerns raised in the letter were fears that online gaming would undermine investments made by gaming developers in physical gaming locations, cannibalize small operator gaming revenue and weaken the state’s public policy and regulatory framework.

Gaming executives also expressed support for restricted gaming operations – 15 or fewer slot machines – believing licensing of out-of-state online gaming companies could damage those businesses. 

Former Gov. Brian Sandoval reinstituted the Gaming Policy Committee in 2011 after a nearly 20-year absence. He directed the 12-person panel, which the governor chairs, to create policy advice for the Legislature on four issues during his two terms – internet gaming, daily fantasy sports, eSports and legal marijuana.

Gov. Steve Sisolak has not reinstated the panel, which includes regulators, members of the gaming industry, tribal gaming leaders, lawmakers and other stakeholders.

“We believe the policy committee will be a much more inclusive way,” Diss said.

The Gaming Control Board had scheduled a public workshop in May to discuss 15 suggested changes to the regulations, including removing provisions that limit interactive gaming to just poker and changing the rules requiring in-person registration for mobile sports betting accounts. But the meeting was cancelled, and board Chairman Brin Gibson said at the time the workshop would be rescheduled after the Legislature adjourned in June. 

Regulators have scheduled a workshop for Wednesday, but it is focused on “amending the definition of wagering accounts.”

Gibson acknowledged receiving the letter but declined to comment on Monday. On Tuesday, in a statement released by the Control Board, Gibson said he “appreciates the exchange of ideas on topics of importance to the state’s gaming industry.”

The state’s largest casino operators – MGM Resorts International, Caesars Entertainment, Wynn Resorts, Las Vegas Sands and Boyd Gaming – were not represented in the letter. Other than Las Vegas Sands, the companies have online gaming operations in states outside Nevada, mostly through mobile sports betting.

A spokesman for Boyd Gaming said he was aware of the letter but declined to comment. Boyd, through its partnership with sports betting operator FanDuel, operates legal online casinos in Pennsylvania and New Jersey, where the company also operates traditional casinos.

Online gaming expansion has become a growing topic nationwide after two states, New Jersey and Pennsylvania, reported higher than normal online gaming revenues last year when casinos nationwide were closed because of the COVID-19 pandemic.

Michigan launched legal online gaming in January, joining New Jersey, Pennsylvania, West Virginia and Delaware with full-scale online casinos. Nevada legalized online poker in 2013 but there is just one such site – World Series of Poker, which is run by Caesars. The state’s small population has been one reason cited for online poker not flourishing.

According to the American Gaming Association (AGA), online gaming revenue in the U.S. was $1.69 billion in the first six months of the year, a 165.8 percent increase compared to the same six-month period in 2020.

“Online gaming has been approved in states with a limited number of commercial casinos, some without any commercial casinos at all,” gaming executives wrote. “In states with limited land-based gaming properties, online gaming may capture gaming tax revenue for the state that it otherwise would not receive by providing easier access to gaming entertainment.”

Other signatures on the letter included downtown Las Vegas casino operators Derek Stevens (Circa Casino Resort, D Las Vegas, and Golden Gate), Kenny Epstein (El Cortez) and Jonathan Jossel (Plaza).

Golden Entertainment CEO Blake Sartini also signed the letter. Golden operates the Strat in downtown Las Vegas, casinos in the Las Vegas Valley, Laughlin and Pahrump, and a statewide slot machine route business along with a robust restricted gaming tavern operation.

Northern Nevada casino operators Anthony Marnell III (Nugget Casino Resort), Ferenc Szony (Truckee Gaming), Jeff Siri (Club Cal Neva), Rob Mederios (Boomtown), J Grant Lincoln (Baldini’s) and John Farahi (Monarch Casino Resort), were also among the signers.

DraftKings-branded sportsbook in Las Vegas a possibility through Golden Nugget Online Gaming deal

DraftKings could eventually operate retail and online sportsbooks in Nevada after the Boston-based company’s planned $1.56 billion acquisition of Golden Nugget Online Gaming, a business owned by billionaire Tilman Fertitta.

On Monday, DraftKings unveiled the all-stock transaction, which includes a commercial agreement with Fertitta Entertainment, the Texas mogul’s holding company that controls businesses across gaming, lodging, dining and entertainment sectors, including Golden Nugget casinos in downtown Las Vegas, Laughlin and three other states.

Fertitta owns 46 percent of Golden Nugget Online Gaming and will join the DraftKings board.

“Let’s be honest, they are the market leader. They are the brand,” Fertitta said of DraftKings on an early morning conference call to discuss the deal. “There is going to be a lot of consolidation in this space. We want to be part of somebody bigger. I only wanted stock so we can ride this up with them.”

Fertitta is a cousin of Red Rock Resorts CEO Frank Fertitta III and Vice Chairman Lorenzo Fertitta and is not involved in the company that controls locals gaming operator Station Casinos.  

DraftKings has grown in the past three years from a daily fantasy sports provider into a sports betting giant currently operating retail and online sportsbooks in 14 states. The company is considered either the No. 1 or No. 2 sports betting provider in those markets.

Nevada is not one of DraftKings’ markets.

However, one of the benefits listed in the investor presentation provided with the announcement was the rebranding of retail sportsbooks under the DraftKings name “at current and future Golden Nugget casinos.”

A DraftKings spokesman said in an email he couldn’t “elaborate any further” on the potential for a DraftKings sportsbook in Las Vegas. He said the investor presentation offered “very high-level touches” on market access.

During the call, Fertitta said the deal with DraftKings would remove a regulatory stipulation that prohibits Golden Nugget sportsbooks from accepting wagers on games involving the NBA’s Houston Rockets. The team is owned by Fertitta Entertainment.

“This is something that has been an issue for us being a major sports team owner,” Fertitta said. “Not being able to take bets on an iconic team like the Houston Rockets is extremely difficult anytime we enter a market. Getting rid of that problem is important to us.”

A spokesman for the Gaming Control Board said DraftKings had not filed an application for a gaming license covering the two casinos as of Monday morning. The deal between DraftKings and Golden Nugget Online Gaming is expected to close in the first three months of 2022.

“As sports betting continues to grow across the country, there are still several operators that have been looking at Nevada from the outside trying to find access,” Global Market Advisors partner Brendan Bussmann. “DraftKings may have found their way into the market through the Golden Nugget but will face some challenges with its limited location over other operators like Caesars, MGM, and Station Casinos that already have strong market access.”

Eilers & Krejcik gaming analyst Chris Grove also thought DraftKings would have a tough time gaining market share in Nevada, “where the company will be competing against deeply entrenched brands.”

DraftKings CEO Jason Robins did not address a Nevada sportsbook during the conference call. He also did not take questions. Robins said the deal expands the company’s consumer reach to include members of loyalty programs from the Golden Nugget casinos and Landry’s multiple restaurant chains and entertainment attractions. The combined programs cover more than 5.5 million members.

Robins said Fertitta would “take an active role in helping me shape the company.”

The deal gives DraftKings market access with the Rockets, including building a sportsbook at the team’s arena in Houston should Texas legalize sports betting.

Other Las Vegas ventures for DraftKings

In 2015, Nevada gaming regulators told DraftKings, FanDuel and other daily fantasy companies they had to be licensed as sports betting operators if they wanted to continue to offer daily fantasy sports in the state.

Grove suggested DraftKings lost a “key competitive advantage” in Nevada by not operating daily fantasy in the state during the past six years. 

“Therefore (the company) hasn't built the same sort of player database that has been a major contributor to DraftKings' sports betting success,” Grove said.

DraftKings never filed a license application. However, in 2020, DraftKings opened a large office presence in the Town Square complex on south Las Vegas Boulevard for its growing nationwide back-of-the-house support services. That same year, the company signed a multiyear agreement with UNLV to become a primary sponsor of its Center for Gaming Innovation, inside the university’s International Gaming Institute.

DraftKings co-founder Matt Kalish, who serves as the company’s North America president, said in a 2020 interview that Nevada “is the ground zero for sports betting, and we need to be a part of that market.”

Grove said DraftKings, despite its sports betting presence, “badly needed” access to casino player databases. He said the company may be feeling the heat from other online gaming and sports betting competitors.

Grove said MGM Resorts International’s BetMGM “appears to have found a way to tap into (MGM’s) database of land-based casino customers.” Also, Caesars Entertainment said last week it would spend $1 billion to market and promote its sports betting brand to its casino player database over the next two years.

“A DraftKings-Golden Nugget online casino pairing will be immediately game-changing,” Grove said. “We see this pairing as a longer-term defensive hedge against the ascendancy of BetMGM, Caesars, and even Penn National, which has barely begun to scratch the surface of its online casino capabilities.”

Boyd Gaming owns 5 percent of DraftKings’ rival FanDuel, which operates sports betting and online gaming at several of the company’s regional casinos outside Nevada.

In April, Boyd CEO Keith Smith was noncommittal concerning a potential move into Nevada for FanDuel in connection with the company’s casinos in the Las Vegas Valley and downtown.

DraftKings, FanDuel and Caesars were named in April as the official sports betting partners of the National Football League.

Golden Nugget’s online casino and sports betting business currently has market access for nine states but is only active in two markets — New Jersey and Michigan. Nevada is one of five states with online gaming, but it is a poker-only market.

“While the merits of this deal are surely visible, so are the question marks around it,” said Deutsche Bank gaming analyst Carlo Santarelli. “We believe it will be some time until one can measure the ultimate success of the transaction fairly, and in the interim, we expect the market climate to determine investor perception.”

Updated at 2:15 p.m. on Aug. 10, 2021, to reflect DraftKings' licensing status in Nevada.

Indy Gaming: Nevada sportsbooks headed toward a record year even as more states legalize the activity

Good morning, and welcome to the Indy Gaming newsletter, a weekly look at gaming matters nationally and internationally and how the events tie back to Nevada.

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Sports betting is legal and regulated in more than half of the U.S.

But despite the competition, Nevada’s sports betting industry has thrived.

If the first six months of 2021 are an indicator, Nevada sportsbooks are on pace to shatter the state’s annual records for wagers and revenues that were recorded in 2019. Through June, sportsbooks collected $3.3 billion in bets, an increase of 32 percent compared to 2019. Total sports revenue of $207 million is already 56.2 percent ahead of the 2019 total.

Only three states – New Jersey, Pennsylvania and Illinois – have recorded higher sports betting revenue figures than Nevada through the first half of 2021. Only New Jersey has seen higher sports wagers with $4.1 billion through June.

Eilers & Krejcik gaming analyst Chris Grove said the growth of legal sports betting nationally in the last three years, following a 2018 ruling by the U.S. Supreme Court opening the activity to states beyond Nevada, could be similar to the expansion of poker in the last decade.

“It's possible that increased interest in sports betting will grow the national revenue pie sufficiently to allow Nevada to grow alongside states where sports betting has recently been legalized,” Grove said. “That, of course, relies on the state's casinos continuing to build and expand one-of-a-kind sports betting experiences.”

In 2019, Nevada sportsbooks took in $5.319 billion in wagers, the 10th consecutive all-time state record. Revenues collected by the books from those wagers totaled a record $329.1 million. 

The COVID-19 pandemic caused the state’s first annual decline in sports betting in more than a decade. Total wagers fell to $4.3 billion in 2020, and revenues dipped to $262.8 million.

But last week’s release of the state’s monthly gaming revenue figures by the Gaming Control Board confirmed the state’s sports betting industry is back on track.

Twenty-two states and Washington D.C. have legal and regulated sports betting. Another 10 states could launch as soon as this year in time for the college football and NFL seasons.

California voters will consider a referendum in 2022 to allow tribal casinos and racetracks to offer retail sportsbooks. In Florida, an agreement between the governor and the Seminole Indians could bring sports betting to the tribe’s casinos. However, several groups are contesting the legality of the revised compact.

Grove said it was inevitable that Nevada sports betting figures would be eclipsed by New Jersey and other jurisdictions, because of the state's relatively small population. Sportsbooks at Northern New Jersey racetracks and the state’s approval for remote mobile sports wagering draws business from populous New York City.

“There's little to suggest that the growth of sports betting in other states is causing a decrease in Nevada's sports betting revenue,” Grove said.

Record high sports bettings totals in 2021 have also been assisted by the changed calendars for several sports leagues pushing games into 2021 and benefiting sportsbooks. The result was a record for June in both wagers ($545.2 million) and revenues ($29.2 million).

“The strong monthly totals were bolstered by an unusual sports calendar that saw NBA playoffs action, which typically ends in early June, throughout the entire month,” Grove said.

Mobile sports wagering has accounted for more than 60 percent of all the sports bets placed in Nevada this year. Global Market Advisors Partner Brendan Bussmann suggested mobile wagering would grow if Nevada gaming regulators allowed remote registration, an effort opposed by Station Casinos.

“One of the biggest opportunities for Nevada to drive additional sports betting revenue is to remove the in-person requirement,” Bussmann said. “Technology continues to provide advancement for knowing your customer and anti-money laundering initiatives. Geolocation for sports betting and iGaming in other states have surpassed Nevada’s current regulatory structure. It’s time for us to push forward.”

The absence of DraftKings and FanDuel is another dynamic in Nevada’s sports betting universe.

The companies, which jumped into legal sports betting following the Supreme Court ruling, are considered the nation’s top two sports betting operators. DraftKings is in 14 states and FanDuel is in 10 states, which includes a partnership with Las Vegas-based Boyd Gaming Corp. in Pennsylvania, Illinois, Indiana, Iowa, and Mississippi.

The companies gained a larger national presence in April when they were selected as official sports betting partners of the National Football League along with Caesars Entertainment. The designation gave the businesses exclusive rights to utilize NFL trademarks within their operations and engage with fans through NFL-themed free-to-play games.

Prior to 2018, the companies operated as daily fantasy-centric businesses and had trouble gaining acceptance from the traditional sports betting community. In October 2015, Nevada gaming regulators told DraftKings, FanDuel, and other daily fantasy suppliers they had to be licensed as sports betting operators if they were to continue providing the activity in the state.

Neither has made inroads into Nevada’s casino market. DraftKings maintains a large office presence in the Town Square complex on south Las Vegas Boulevard for its nationwide back-of-the-house support services. Boyd has a 5 percent ownership stake in FanDuel, but the partnership doesn’t include the company’s 10 Las Vegas-area casinos.

In April, Boyd CEO Keith Smith was non-committal concerning a potential move into Nevada for FanDuel in connection with the company’s casinos in the Las Vegas Valley and downtown.

“It’s a possibility in the future, but for now the relationship is with the non-Nevada properties,” Smith said following Boyd’s quarterly earnings conference call. “The reason we did the deal is that we knew they were a winner, long term.”

The 57,400-seat Arizona Stadium in Tucson, home of the Barstool Sports Arizona Bowl, is seen in 2016. (Howard Stutz/The Nevada Independent)

College football bowl game naming rights is a new outreach for sports betting

Barstool Sports, a digital media platform that serves as the sports betting extension for regional casino operator Penn National Gaming, has a new business venture – name sponsor for a college football bowl game.

The announcement last week that the Arizona Bowl in Tucson will be renamed the Barstool Sports Arizona Bowl starting Dec. 31, marked the first time a sports betting brand was being paired with a college bowl game. Terms of the multi-year deal were not announced.

“The Barstool and Arizona Bowl partnership is a first of its kind collegiate-level opportunity to integrate content and a sports betting brand,” said Maryland-based sports betting consultant Sara Slane. “It is a creative way to blend the two without doing a direct deal with a college team. I expect additional cutting-edge integrations as NIL (name, image, likeness) college modernizations continue to progress.”

According to the Arizona Daily Star, Barstool founder David Portnoy said sponsoring a college football bowl game "has always been a dream of mine." 

The New Year's Eve game between teams from the Mountain West and Mid-American conferences will be played at the 57,400-seat Arizona Stadium on the campus of the University of Arizona and broadcast on Barstool’s digital streaming platforms.

Barstool’s personalities produce hours of sports-related videos, podcasts and social media posts covering news, lifestyle and gambling information for various digital outlets. Portnoy said the group would be in Tucson for the game.

Penn National, which operates 42 gaming properties in 20 states, spent $163 million in January 2020 to acquire 36 percent of Barstool to utilize the brand as the company’s sports betting venture for both retail and online operations.

With more than 66 million followers, the Barstool demographic was viewed as a way to attract a younger demographic to Penn, whose customer base is predominantly an older audience.

Penn National operates M Resort in Henderson and two small casinos in Jackpot near the northeastern Nevada border with Idaho.

At the outset of the pandemic last year, Penn sold the Tropicana Las Vegas, which it has owned since 2015, to Gaming and Leisure Properties. The real estate investment trust leased the Strip resort back to Penn, but the operations are in the process of being sold to Bally’s Corp.

Penn is expanding the Barstool sports betting presence to 10 states, but Nevada is not part of the growth plan.

The Barstool mobile wagering app is live in four states – Illinois, Indiana, Michigan and Pennsylvania. Other deals in the pipeline, including Arizona, where Penn National signed a deal with the Phoenix Raceway to build a Barstool sportsbook at the track and launch mobile sports betting throughout the state.

Nevada has a connection to the Arizona Bowl through UNR, which is the only school to have twice played in the contest. The Wolf Pack won the first Arizona Bowl in 2015, beating Colorado State 28-23. In 2018, UNR beat Arkansas State, 16-13.

Other items of interest:

Screenshot of the Caesars Sportsbook App. (Courtesy Caesars Entertainment)

Caesars Entertainment has rebranded its sports betting operation as Caesars Sportsbook and unveiled a new mobile sportsbook app under the same name. The change was expected after Caesars paid almost $4 billion in April to acquire United Kingdom-based William Hill. Caesars plans to sell William Hill’s non-U.S. operations. Caesars already owned 20 percent of William Hill U.S. through a previous transaction. The Caesars Sportsbook mobile app is now live in eight states (Colorado, Indiana, Iowa, Michigan, New Jersey, Tennessee, Virginia and West Virginia), with three states (Arizona, Maryland and Louisiana) pending regulatory approval.

In Nevada, Illinois and Washington, D.C., where customers are required to be at or near a Caesars sportsbook retail location to register, bettors will have access to the Caesars Sportsbook by William Hill app. A Caesars spokeswoman said Nevada sportsbooks operated by William Hill outside of Caesars-owned resorts will remain under the William Hill brand and the William Hill Nevada app will remain active.

Macau gaming revenues hit $1.1 billion during July, well below the region’s pre-pandemic numbers of roughly $3 billion a month. Las Vegas Sands, Wynn Resorts, and MGM Resorts International are the only Nevada casino operators in the Macau market. Macau’s Gaming Inspection and Coordination Bureau said on Aug. 1 the figure was down 66 percent compared to July 2019 and 29.2 percent from two months ago. Through the first seven months of 2021, Macau gaming revenues are down 67 percent compared to 2019. During 2020, Macau experienced six straight months of 90 percent gaming declines. Stifel Financial gaming analyst Steven Wieczynski said he was encouraged by visitation trends during periods of less restrictive travel mandates to and from the Chinese Special Administrative Region. But that hasn’t resulted in gaming revenue increases. “At this point we believe investors just have to write off 2021 and start to focus on 2022. With additional virus lockdowns probably coming, we believe any material recovery is now a 2022 story,” Wieczynski said.

Bet MGM and online news network Cheddar News are launching Cheddar Bets, a weekly program that combines sports betting and the financial markets. Airing Thursdays at 1:30 p.m. P.T. beginning August 19, Cheddar Bets will look at the sports calendar through a sports betting perspective and how the action could influence Wall Street. BetMGM oddsmakers will appear on the program. “Through Cheddar Bets we'll provide informative and entertaining programming to engage new audiences,” said BetMGM Chief Revenue Officer Matt Prevost.

San Jose Sharks forward Evander Kane denied allegations this weekend that he bet on NHL games, including against his own team. The charges, which the NHL said they would investigate, were made on social media by his estranged wife. Kane, writing on Twitter, said, “I have NEVER gambled/bet on Hockey, NEVER gambled/bet on a Sharks game, NEVER gambled/bet on any of my games and NEVER thrown a hockey game.” Kane was the defendant in a 2019 lawsuit filed by the Cosmopolitan of Las Vegas over alleged non-payment of $500,000 in a line credit he received from the Strip resort to gamble at the property. The lawsuit, which was dropped by the casino, led to some “only in Vegas-style” taunting by Vegas Golden Knights fans when the Sharks played at the T-Mobile Arena. During the game, when Kane took to the ice, fans chanted loudly, “Pay your markers.”

The Reno City Council agreed to sell two downtown land parcels to Jacobs Entertainment after the owner of the Sands Regency increased the purchase price of the sites and offered the city a profit-sharing agreement. According to the Reno Gazette-Journal, the parcels will be part of the Reno Neon Line, a mixed-used development proposed by the company to renovate a rundown area of the downtown corridor that will include housing, retail, lodging, dining and gaming.

Quotable:

"Being part of the BetMGM family is dope and an honor. Plus, with ambassadors like Barry (Sanders), (Wayne) Gretzky and Jalen (Rose), I think da' kid is in good company, ya know what I mean?"

-Former NFL running back and new BetMGM brand ambassador Marshawn Lynch in a statement released by the company

Another billion-dollar gaming revenue month for Nevada, but Strip still lags

Nevada casinos have been on a heater since March.

But Strip resorts are still looking for a hot hand compared with the rest of the state.

June gaming revenue figures released Thursday by the Gaming Control Board marked Nevada’s fourth straight month that casinos statewide collected more than $1 billion in revenue. The overall total, $1.19 billion, fell short of May’s all-time single-month record of $1.23 billion.

Control Board Senior Research Analyst Michael Lawton said Nevada last recorded four straight billion-dollar revenue months in 2008, from January through April.

Compared to 2019 – 2020 monthly gaming totals were skewed by COVID-19 shutdowns, capacity restrictions and operating limitations – June saw an increase of 14.6 percent in total gaming revenue statewide. Last year, casinos statewide collected just $566.9 million in gaming revenue during the month after reopening on June 4.

A single month record statewide slot machine revenue figure of $868.1 million was the primary factor in June’s overall total. Wagering on slot machines statewide was $11.4 billion, up 19.7 percent from June 2019.

“The recent surge in statewide gaming win is the result of several contributing factors which include strong demand, the return of leisure travel, customers with savings that can be attributed to stimulus and the return of core customers including customers 55 and over,” Lawton said.

The past three months established the state’s largest-ever gaming revenue quarter — a combined $3.46 billion collected by casinos, besting the 2006 fourth quarter when Nevada casinos collected $3.266 billion.

Pedestrians walk on the Las Vegas Strip on Saturday, March 27, 2021. (Jeff Scheid/The Nevada Independent)

New mask mandate

June marked the first full month that casinos statewide were allowed to operate at 100 percent capacity without COVID-19 restrictions.

It’s unclear what the new mask mandates that go into effect after midnight on Friday might have on gaming operations. Because of spiking COVID-19 numbers and following a Centers for Disease Control and Prevention recommendation, the Control Board issued an order Tuesday for all casinos in Clark, Washoe and 10 other counties that requires employees and customers – regardless of vaccination status – to wear facial coverings while indoors.

Truist Securities gaming analyst Barry Jonas said in a pair of research notes to investors Wednesday that management for both Red Rock Resorts in Las Vegas and Atlantis owner Monarch Casinos in Reno didn’t believe the mask mandate would disrupt any recent favorable gaming and visitation trends.

“Monarch’s local customer mix is used to wearing masks, a sentiment echoed (by) Red Rock,” Jonas said. He added the mask mandate is not specific to just gaming.

“We think it’s too early to fully know the impact from this new policy, but we note the first quarter saw impressive results even with the same mask mandates,” Jonas said.

Strip recovery slow

Unlike much of the state, the Strip is still finding its footing.

During June, Strip casinos collected $610.6 million from gamblers, a decline of 1 percent from June 2019. The month included less than a week of operations from the $4.3 billion Resorts World Las Vegas, which opened before midnight on June 24.

Analysts noted the return of live entertainment in June, as well as the Strip’s first full-scale conference and tradeshow in more than a year when World of Concrete was held at Las Vegas Convention Center.

Las Vegas Convention and Visitors Authority Vice President of Research Kevin Bagger said convention and group visitation data for the month is still being gathered. In addition to World of Concrete, Las Vegas saw attendance from three other shows that “helped support midweek business,” Bagger said.

Lawton said the conferences and entertainment were “positive events for driving visitation.”

Slot machine gambling propped up the Strip’s overall totals in June with a 34.4 percent increase in revenues to $376.8 million, compared to June 2019. Wagering on slot machines was $4.3 billion, a nearly 21 percent increase from 2019.

However, high-end baccarat play, a driver of Strip gaming activity, continued to lag behind 2019 totals. Baccarat revenues of $42.5 million were down 73.1 percent during the month.

Strip casinos collected a combined $1.75 billion in gaming revenues for the April-through-June second quarter, the third-highest quarter ever for the Strip. The figure fell short of the all-time record of $1.79 billion in the 2006 fourth quarter and $1.78 billion in the 2007 fourth quarter.

The Strip still trails Nevada’s overall recovery. Statewide, gaming revenues are up 1.5 percent for the first six months of the year compared to 2019. Strip gaming revenues are down 11.3 percent for the same time frame. Clark County as a whole, the Strip, North Las Vegas and Laughlin are the state’s only reporting areas down for the calendar year compared with 2019.

As for Las Vegas visitation, the LVCVA said more than 2.97 million visitors came to Southern Nevada in June, 3.2 percent more than 2.88 million visitors in May. June was the sixth consecutive month-over-month increase. However, the June total was 17.6 percent lower than June 2019.

Bagger said hotel occupancy reached 75.9 percent in June, a 5 percent increase over May but down nearly 16 percent from June 2019. Weekend occupancy reached 90 percent while the market’s average daily room rate of $127.90 surpassed June 2019 by 6.2 percent.

Circa Resort & Casino. (Jeff Scheid/The Nevada Independent)

Record breaking month for downtown Las Vegas

Downtown Las Vegas is a different story.

The market recorded an all-time single month gaming revenue total of $79 million, breaking April’s previous mark of $76.3 million. For the April-through-June quarter, downtown’s gaming revenues topped $230 million, shattering the previous record of $183.6 million set in the 2019 fourth quarter.

Analysts credited last year’s opening of Circa Resort Casino with fueling downtown revenues as a whole.

Circa owner Derek Stevens, who also operates D Las Vegas and Golden Gate in downtown, said Thursday he was upbeat by the state’s overall numbers as well as downtown’s total. He cautioned, however, that it’s still early in the recovery.

“Month to month or a single quarter is not enough of a time frame to look at things,” Stevens said. He said Las Vegas needs international travel and the convention business to return because downtown casinos profit from those visitor segments.  

On Tuesday, Boyd Gaming said its two downtown casinos – a third, Main Street Station, remains closed – took in $38.3 million in revenues in the second quarter, a 39.8 percent decline compared with 2019. CEO Keith Smith said a continued decline in visitation from Hawaiian customers – its key downtown feeder market – has slowed a return to normal operations.

“We all benefit when the Hawaiian business comes back,” Stevens said.

International travel lags

McCarran International Airport reported 3.81 million arriving and departing passengers in June, which was down 14.3 percent from the 4.4 million recorded in June 2019. However, the figure was a slight increase over May’s passenger total of 3.5 million.

For the first six months of 2021, volume at the nation’s ninth busiest airport is down 36.9 percent compared to the same time period of 2019.

“What we’re seeing the past couple of months is that Vegas is in high demand for travel,” said McCarran spokesman Joe Rajchel. He said airlines have been evaluating the interest and adding flights where needed.

Lack of international airline travel, however, continues to be the largest contributor to the monthly declines compared to 2019. In June, just 53,400 international travelers were recorded during the month, a drop of 83.7 percent. For the year, international airline passenger volume is down 90.2 percent.

McCarran had direct airline flights to and from 11 countries before the pandemic. In June, four airlines serviced destinations in Mexico. Rajchel said airline service to and from Calgary, Alberta in Canada resumed through WestJet during July and will appear in next month’s report on passenger statistics.

Other June highlights

In Northern Nevada, Washoe County saw gaming revenues hit $88.4 million, an increase of 26.7 percent from June 2019. Reno casinos contributed $64.5 million to the total.

Nevada’s sportsbooks reported revenues of $29.2 million, an increase of 76 percent from June 2019. Sports wagering of $545.2 million was a 69.3 percent increase from June 2019. Both the revenue and wagering totals were all-time records for the month.

Mobile sports wagering accounted for 57.7 percent of all sports bets taken in June.

Gaming Control Board says casino employees must comply with Clark County mask mandate

The Gaming Control Board said casinos and other gaming establishments are included in the mask mandate approved Tuesday by the Clark County Commission that requires all employees to wear a face covering while working in a public space.

In a statement Wednesday, Control Board Chairman Brin Gibson said the agency would seek disciplinary action against licensees if they violate the mask mandate.

Gibson said the order goes into effect on Thursday at midnight and covers all gaming properties on the Strip, downtown and throughout Clark County.

Gibson said any emergency issues concerning the pandemic are under the control of local county governments acting “in the best interests of their constituents.”

Last week, after the Southern Nevada Health District recommended both vaccinated and unvaccinated individuals wear masks in crowded indoor public places, several casino operators implemented various mitigation measures, including the requirement that employees all wear masks while on the job, regardless of vaccination status.

Nevada Resort Association President Virginia Valentine said Monday she expected the gaming industry would support an employee mask mandate. 

The new mask mandate, which members of the Clark County Commission approved unanimously during an emergency meeting on Tuesday, will apply to all businesses in incorporated cities and unincorporated parts of the county.

“The Board is fully supportive of the Southern Nevada Health District and the Clark County Commission in its mask mandate for employees in Clark County,” Gibson said. “The Board will ensure compliance with this requirement in Clark County within the Board’s areas of jurisdiction.”

In June, Mohegan Sun Casino at Virgin Hotels Las Vegas paid a $60,000 fine after several reality television celebrities – who were paid to promote the casino’s March 25 opening – were photographed not wearing masks or facial coverings, as required at the time.

Last year, The Grand Sierra Resort in Reno and the Sahara Las Vegas, which are both owned by Los Angeles-based Meruelo Group, paid a combined $75,000 fine last September for multiple violations of the state’s COVID-19 health and safety guidelines.

Former internet gaming adversary Sands seeks to become a ‘strategic investor’ in the business

Las Vegas Sands, which long opposed online gaming legalization in the U.S., announced Monday it plans to enter a business the company’s late billionaire founder Sheldon Adelson spent millions of dollars over the years to quash.

A veteran investment executive will head up Las Vegas Sands’ efforts to break into the growing digital gaming technologies market, a move viewed as an initial step into an arena that includes internet casino gaming and online sports betting.

In a statement, Las Vegas Sands said it is looking to become a “strategic investor” that is primarily focused on the business-to-business space.

More than half of U.S. states have legalized sports betting, the majority of which offer mobile and online sports betting alternatives. Internet casino gaming is legal and available in five states.

Nevada gaming regulations currently allow for real money online poker, but they could be changed by state gaming regulators to permit wagering on internet slot machines and table games. Mobile wagering in Nevada accounted for 62 percent of all sports bets placed during May, according to the Gaming Control Board.

Las Vegas Sands first teased its interest in online gaming in late January and a little more than two weeks after Adelson passed away, but didn’t provide much in the way of details until Monday.

Investment speculation centered on the company acquiring a major sports betting or online gaming provider. That move, said Eilers & Krejcik Gaming analyst Chris Grove, would conflict with the hiring of Davis Catlin by Las Vegas Sands as a senior managing director.

“The announcement definitely leans more in the direction of a (business-to-business)-focused company versus a company with a heavy direct-to-consumer angle,” Grove said in an email. “I think there's definitely a world where Sands makes a series of smaller bets in younger companies and builds something new from that foundation versus trying to accomplish their goals with a single splashy acquisition.”

Catlin spent 14 years with Sands Capital Management, an Arlington, Virginia-based investment firm that is not connected to Las Vegas Sands. The company, which has managed more than $77 billion for clients according to its website, was founded in 1992 by Frank Sands, Sr., who died in March.

In a statement, Las Vegas Sands said Catlin led his former firm's investments in both public and private companies in digital gaming.

“Digital gaming and other related offerings are still very much in the early stages of development, and we believe there is an outstanding opportunity for us to invest in the technologies being developed,” said Las Vegas Sands Chairman and CEO Rob Goldstein.

The move follows the announced $6.25 billion sale in March of the company’s Las Vegas gaming holdings, including the Venetian and Palazzo resorts, Sands Expo and Convention Center, and the under-construction Sphere entertainment venue. The transaction is expected to close by the end of the year and would leave Las Vegas Sands as an Asian-centric casino company with properties in Macau and Singapore.

Las Vegas Sands first teased its interest in online gaming in late January, just weeks after Adelson’s death and the appointment of Goldstein, a longtime company executive, into the billionaire’s former roles.

Goldstein said during the company’s fourth-quarter conference call that Las Vegas Sands was exploring the potential of entering the sports betting, digital and iGaming marketplace.

He didn’t give any details at the time, nor did he provide any additional information in April during the company’s first-quarter earnings conference call.

“We are exploring multiple opportunities … and we’ll update you at the appropriate time,” Goldstein said.

Monday, the CEO said an investment team, led by Catlin, “will provide meaningful opportunities to make investments that will generate significant long-term benefits for the company.” Goldstein said Las Vegas Sands will be “patient and (is) investing for the long-term.”

‘Spending whatever it takes’

Adelson, who died on Jan. 11 at age 87 following a long battle with non-Hodgkins lymphoma, long expressed disapproval about internet gaming. He believed the activity would diminish revenue at traditional casinos and could lead to increased problem- and underage-gambling.

Adelson spent millions of dollars funding like-minded grassroots organizations in efforts to kill any hint of favorable state-by-state legislative activity to legalize online gaming. Adelson funded the Coalition to Stop Internet Gambling and also backed congressional efforts to restore the Wire Act to its pre-2011 interpretation.

“He never questioned its viability,” Goldstein said in January of Adelson’s opposition to online gaming. Rather, Adelson had “ethical concerns” about online gaming and how to police it against younger age players, he said.

Las Vegas Sands was the only major casino company that opposed legal internet gaming and caused a rift within the gaming community.

That influence, however, led to the Department of Justice’s 2019 reversal of its eight-year-old interpretation of the Wire Act, which favored regulated online gaming. Lobbyists for Adelson, according to the Wall Street Journal, drafted the memo that was sent to top Justice Department officials in 2017, which made a case that the 2011 opinion on the Wire Act was in error.

Following the second reinterpretation, New Hampshire officials sued the Justice Department and the state won on both the federal district court and circuit court levels. In June, the Justice Department let a deadline expire without appealing the favorable New Hampshire ruling, ending the case.

Slow approach

According to the American Gaming Association, revenues from online gaming in the U.S. topped more than $1.39 billion through the first five months of the year, a 180 percent increase over the same five months of 2019. The five states with full online casino gaming – Pennsylvania, New Jersey, Delaware, West Virginia and Michigan – combined for $310.5 million in revenues in May, slightly below the all-time single-month high of $311.3 million set in March.

Most analysts were quiet on the Sands’ announcement Monday. Shares of the company’s stock price closed at $51.02 on the New York Stock Exchange, down 31 cents or 0.6 percent.

In April, analysts said the company was utilizing a correct methodology toward online gaming.

“Given it still remains an embryonic market, Las Vegas Sands is taking a smart and targeted approach, whereby they could leverage their balance sheet to pursue either (mergers and acquisitions) or organic growth opportunities within the U.S. or abroad,” Deutsche Bank gaming analyst Carlo Santarelli said at the time.

Nevada casinos’ take of $1.23 billion in May shatters nearly 14-year-old high

It seems there is something to the “pent-up demand” theory.

Nevada casinos collected a single-month record of $1.23 billion in gaming revenues during May, a stunning figure given that most casinos statewide were still operating under COVID-19 capacity restrictions that weren’t fully lifted until June 1.

The record figure, reported Wednesday by the Gaming Control Board, easily eclipsed the state’s previous single-month high of $1.165 billion recorded in October 2007.

Control Board Senior Research Analyst Michael Lawton said an all-time record on the Strip for slot machine revenues and a healthy month for the Strip’s high-end baccarat business fueled the results.

Lawton said all the sub-markets were up in May, “which can be attributed to strong demand, healthy consumers and leisure travel beginning to rebound.”

The $1.23 billion figure was up 25.3 percent over May 2019. The state is comparing monthly totals to 2019 because casinos statewide were closed in May 2020 during a 78-day shutdown of businesses during the pandemic.

On the Strip, gaming revenues of $655.5 million marked a 26.7 percent increase over May 2019. Strip resorts reported baccarat revenue of $105.9 million in May, an increase of 97 percent from 2019. Casinos played luckier during the month, holding more than 22 percent of all baccarat wagers, compared to a 7.7 percent hold in May 2019.

Record-busting slot machine revenues on the Strip came in at  $358.3, 24.5 percent over May 2019.

“Sequentially, gross gaming revenues (on the Strip) showed a nice acceleration,” J.P. Morgan gaming analyst Joe Greff said in a research note. Even without including the baccarat, Greff said the Strip’s monthly revenue totals would have been up 19 percent with wagering volumes increasing 17 percent.

May marked the third straight month that Nevada gaming revenues eclipsed the $1 billion mark. For the first five months of 2021, statewide gaming revenues are down 1.3 percent compared to 2019, when the Nevada casinos collected more than $12 billion from gamblers, which was the first year the state hit such a lofty total since 2007.

Macquarie Securities gaming analyst Chad Beynon said he wouldn’t be surprised if the results from the last three months in Las Vegas carry over into the summer.

“Looking ahead, although a traditionally weaker month of the year, June hosted two noticeable events, the World of Concrete, the (city’s) first major convention on June 8-10, and the Resorts World Las Vegas opening on June 24, the first major opening on the Strip in more than 10 years,” Beynon said in a research note.

On the Strip, despite May’s total number, gaming revenues are down more than 13.6 percent compared to the first five months of 2019.

International travel still down

Baccarat totals for the month aside, the Strip is still missing a key business segment – high-end international customers.

During May, McCarran International Airport reported its highest single-month passenger total since February 2020, the last full month of operations before the pandemic. Still, the more than 3.5 million passengers flying during the month of May still marked a 23.3 percent decline over May 2019.

International travel continues to be a challenge for Las Vegas, with just 50,258 passengers recorded in May, a decline of 85.1 percent —  all of the passenger traffic coming from Mexico. Las Vegas once had direct flights between 11 different countries.

In May, a Senate Subcommittee on Tourism, Trade, and Export Promotion co-chaired by Sen. Jacky Rosen (D-NV) discussed ways to bring back the international travel market.

At last week’s grand opening event for Resorts World Las Vegas, Gov. Steve Sisolak acknowledged the need for international travel to help fill Las Vegas Strip hotel rooms.

Resorts World is owned by Malaysia-based Genting Berhad, which operates several large gaming properties throughout Asia.

“We’ll get international travel back in time,” Sisolak told The Nevada Independent. “It’s a key market. International customers spend more and stay longer.”

Sisolak said he discussed international travel issues with Genting Chairman K.T. Lam, who said the company has international customers who live in California and New York who will come to Resorts World Las Vegas.

For the first five months of 2021, McCarran’s passenger volume is down 41.7 percent over the same time frame as 2019.

Las Vegas visitation nears 3 million

Las Vegas saw a nearly 12 percent jump in visitor volume during May compared to April, but the market was still roughly 22 percent below its pre-pandemic levels in 2019.

The Las Vegas Convention and Visitors Authority (LVCVA) said Southern Nevada drew just under 2.9 million visitors in May, compared with almost 3.7 million visitors in May 2019. Still, Las Vegas saw its highest visitor count since the pandemic turned off the nationwide travel industry.

Las Vegas, for the 13th straight month, recorded a zero in convention attendance. But that streak is expected to end when June’s numbers are counted because of the World of Concrete trade show and other planned events.

Hotel occupancy reached nearly 71 percent in May, up 5.3 percent over April. Weekend room occupancy was at 88 percent. The LVCVA said midweek hotel occupancy was 62.8 percent, up 4.9 percent from April, but down by more than 25 percent compared with May 2019.

Truist Securities gaming analyst Barry Jonas was skeptical of Las Vegas sustaining the growth from the past three months because midweek occupancy “remains a concern.”

Jonas said he was “looking for green shoots [signs of economic recovery] to get more constructive as the convention calendar picks up.”

Good news outside the Strip

Casinos in downtown Las Vegas recorded their combined second-highest all-time monthly revenue total during May – $75.2 million – an increase of 37.2 percent over May 2019. The figure fell just below April’s single-month record of $76.3 million in gaming revenue.

Analysts have credited the opening last year of Circa Casino Resort as helping to bring additional business downtown. For the year, downtown gaming revenues are up 21 percent over 2019.

In Washoe County, casinos recorded the region’s highest monthly gaming revenue total since August 2008, $91.9 million, an increase of 23.1 percent.

Statewide, Nevada sports betting business set a monthly record during May for both revenues and total wagers. Sportsbook operators took in $477.4 million in bets during the month, an increase of 50.4 percent over 2019, while holding revenues of $27.1 million — a jump of 140 percent.

Mobile sports wagering accounted for 62 percent of all sports wagers in May.

Update at 6:06 p.m. on 6/30/2021: Las Vegas visitation numbers for May added.

Update at 10:53 a.m. on 6/30/2021: This story has been corrected to reflect that statewide gaming revenues for the first five months of 2021 were down (not up) 1.3 percent compared to the same period in 2019.