Tax rebates a positive for the regionals in March but revs will struggle to move into the black
Uncle Sam's late refunds may have jolted a very weak regional gaming environment – temporarily. Sadly, same store revenues will still likely fall. Our first peak into March involves Missouri, which we think declined only 2% on a same-store basis in March, much improved from the 9% average decline seen in the past 3 months.
Overall, we expect SS riverboat revenues to decline 2-3% in March, much improved, but still down. Down revenues with a favorable calendar and the tax refund catalyst is not cause for celebration, in our view. Our projection model accounts for changes in seasonality factors, calendar differences and the tax refund.
Before people get too pumped up about the sequential improvement in gaming revenues, we would note that SSS revenues may continue to post YoY declines until July, with July benefiting from an a easy comp from July 2012 (-7%). With lower visitation and an older, smaller number of core gamers, we remain bearish on the regional fundamentals.