UNDERLYING REGIONAL FUNDAMENTALS IMPROVED IN OCTOBER

October outperforming recent trends, adjusted for seasonality.

 

 

Given the volatility over the past two years, we believe sequential performance, adjusted for seasonality, gives a better measure of market health than simple YoY comparisons.  Assuming Mississippi reports an in-line number this week, October riverboat revs, a regional market barometer, will be 2-3% above recent trends, adjusted for seasonality, as seen in the chart below.  Easy comps in November and December set the stage for growth for the rest of the year.  Since attendance was lower than that of a year ago and hold stayed relatively steady, higher per capita spending was the catalyst for October’s outperformance.

 

UNDERLYING REGIONAL FUNDAMENTALS IMPROVED IN OCTOBER - REGIONAL1

 

Here are some regional market takeaways for October:

 

West Virginia (table revs up 94.86% YoY):  With a 1-2 punch seen below, Charles Town (PENN) recorded a new monthly high in table revs, $10.69MM.

 

1)      Charles Town continues to cannibalize its competition.  Ever since Charles Town opened tables on July 2, it has grown market share.    

2)      New customers propelled state table revs to 85-110% growth in the last 3 months.

 

UNDERLYING REGIONAL FUNDAMENTALS IMPROVED IN OCTOBER - west virginia

 

Illinois (casino revs down 0.2% YoY):  Argosy (PENN) had its best YoY performance (-2%) since November 2007.  We’ll find out next month whether the better results were related to hold.

 

Louisiana (casino revs up 1.8% YoY):  1st YoY gain for the state since Sept 2009.  PNK had better results at Boomtown Bossier but L’Auberge lost 4.3% YoY.

 

Missouri (casino revs up 4.5% YoY):  Lumiere Place (PNK) was down 17.6% YoY and River City (PNK) reported $14.4MM.  However, the combination of Lumiere and River City continues to trend around $27-29MM of revenues monthly.  All of ISLE’s properties reported YoY growth.

 

Pennsylvania (slot revs up 11.5% YoY):  PENN National reported $20.8MM (+1.8% YoY).  Disappointing coin-in (-11.32% YoY) offset higher than average hold (+88bps).  Meanwhile, Sands Bethlehem (LVS) had the highest YoY change among the casinos; coin-in for that property has exhibited positive YoY growth since May 2010.

 

Florida: (same-store revs up 18.2% YoY) Pompano (ISLE) delivered a strong performance, having its highest YoY growth since February 2010.

 

Atlantic City:  The only disappointment.  Total revenues, table revs, and slot revs were down 14.6%, 16.2%, and 10.3% YoY, respectively.  However, Borgata (BYD) fared relatively well, with revenues only slipping 0.4% YoY.  This was due to a 4% and 4.1% YoY growth in slot win and slot drop, respectively.  By revenue market share, Borgata attained 18.7%, its highest share since January.


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