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It is true that casinos played unlucky on the tables in July which contributed to the 15% drop in Strip gaming revenues. Normalizing this year’s table hold % would’ve resulted in a decline of 10%. The bullish sellsiders are quick to point that out. However, the Strip casinos actually played lucky on the slots. This good fortune added 3% to the total so net/net the Strip would’ve been down 13% with normal slot and table percentages. My model predicted -12% (on 8/24).

Part of the higher slot hold percentage certainly relates to luck but there is another contributing factor. As can be seen in the 2nd chart Las Vegas casinos have been “tightening” their slots. Think of it as stealth price increases. I addressed the stealth pricing phenomenon in my 7/21/08 post, “I’LL HAVE A SLOT MACHINE, HOLD THE WINNINGS”. The problem is that players eventually figure it out, especially when consumers feel pinched, as they certainly do know. With this in mind, I continue to worry about slot volume trends.