02/25/10 08:46AM EST

Despite flat McCarran airport traffic, don’t expect January gaming revenues to be positive. 

McCarran Airport released its January traffic yesterday.  The number of enplaned/deplaned passengers declined only 0.2%, the second best month in over two years.  However, the comp was ridiculously easy as January 2009 was the worst month since late 2001 which was obviously impacted by the events of 9/11.

We think it is unlikely that January gaming revenues will be positive even with the easy comparison and the CityCenter draw.  For one, Chinese New Year occurred in January of last year versus February of this year.  Indeed, table drop was up over 9% last year.  Second, we expect slot handle per visitor to continue to fall.

Overall, our model is projecting a 6% decline in Strip revenues in January assuming normal table hold percentage of 12% and a seasonally normal hold percentage on the slots.  We say seasonally because January usually carries a higher slot hold percentage as a catch up from December.  The state doesn’t count coins on Saturdays and holidays so slot revenues get shifted into the next month.

REVERSION BACK TO RED - strip metrics jan

REVERSION BACK TO RED - mccarran traffic jan 10

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