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October was above trend and that got people excited. November looks flat on the surface but sequential trends definitely slowed.  What now?

Regional gaming markets declined 0.6% YoY in November.  That’s not so bad relative to the year to date decline of 1.9%.  However, given the volatility, the usefulness of one and even two year comp analysis is compromised.  Our approach to monitor sequential trends is to incorporate historical seasonality factors and compare each month to the weighted average of the previous three months.  This methodology allows us to analyze sequential revenue levels. Here are the results, graphically depicted:

REGIONAL GAMING HEAD FAKE? - RIVERBOAT

Based on the results for August through October, November should have increased 3.5% YoY to maintain the same seasonally adjusted level of revenue.  The calendar was even YoY so we cannot use that as an excuse.  Rather, it appears October was an anomaly and business levels, at best, are not improving. 

Overall, the numbers are disappointing.  The clear bull thesis on US gaming operators is the tremendous fixed cost leverage of the business (and financial leverage) in an economic recovery.  Unfortunately, we’re just not seeing it yet.

Regionals Must-Know News

PENN

  • West Virginia
    • Charles Town Races table revs soared to $11MM, a new high. Charles Town maintained around a 70% market share.  Slot revs fell 3.28% YoY; however, December 2010 has a favorable comp since December 2009 revs tumbled 24% YoY.
  • Pennsylvania
    • Slot revs were flat at Penn National as higher hold offset lower coin-in. Meanwhile, the state revs grew 8.4% YoY.
    • Since August, table revs have stabilized around $2.5-2.75MM per month
  • Illinois
    • Argosy, Joliet, and Aurora continue to report steep declines; the state revs overall fell 6.3%--continuing its streak of YoY declines since April

PNK

  • Missouri
    • Lumiere + River City reported $26.30MM
    • Compared with last year, PNK’s St. Louis properties generated 47% growth, similar to October
    • River City made $13.51MM aided by record high slot and table hold
  • Louisiana
    • Helped by easy comps and stronger win per admission, L’Auberge revs gained 13.2% YoY
    • Boomtown Bossier broke its 8-month losing streak of YoY declines even though admissions were weak

BYD

  • Illinois
    • Par-A-Dice continues to buck the trend in a weak market, rising 0.6% YoY
  • Louisiana
    • Treasure Chest rose over 15% YoY for the 2nd consecutive month. It has two more months of easy comps.
  • New Jersey
    • Borgata declined 6.41% YoY, but this is considerably better than the market’s slump of 12.5% YoY. Borgata’s slot drop only lost -2.7% YoY compared with the market average of -11% YoY.

ASCA

  • Indiana
    • East Chicago continues to improve, posting its 1st YoY growth since Oct 2009. East Chicago will have a lower bar to beat since December will be the first month that it is compared against its performance when the Cline Avenue bridge was closed for repairs.
  • Colorado
    • Black Hawk market declined 7% YoY, a sharp reversal from its 5% rise in October
  • Iowa
    • The largest casino in Iowa had a healthy 5.2% gain. High coin-in offset flat admissions.

ISLE

  • Florida
    • Pompano’s slot rev growth slowed down to 7.74% from 14.69% in Oct but still a strong performance.
  • Louisiana
    • Continuing to lose market share, Lake Charles fell 5.67% YoY to $9.82MM, its lowest monthly win since Sept 2008.