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LV Strip revs declined 6% in May, in-line with our projection. Baccarat volume was flat, despite the 26% increase in table supply, bucking the recent positive trends.

Baccarat volume carried the Strip last year, increasing every month except February (Chinese New Year calendar shift) and July (only a slight negative).  The Nevada Gaming Board released May statistics yesterday and Baccarat volume was essentially flat, despite the 26% increase in Baccarat table supply, mostly from the addition of CityCenter.  May represented the third straight month of sequential declines in YoY growth in that important metric.

At this juncture, it’s difficult to discern whether the slowdown is related to difficult Baccarat comps, the deceleration of the Chinese economy, or loss of business to Macau.  However, the trend is disconcerting, considering that slot and table volume excluding Baccarat continues to be sluggish as can be seen in the following chart.


Overall, Strip gaming revenue declined 6% which was right in-line with our projection.  As expected, slot hold percentage normalized versus a very low number last year related to the timing of the hopper count.  Consistent with what we’ve been hearing in the market – and in our projection, Baccarat hold percentage was significantly below normal at 8.3%, causing Baccarat revenues to fall 37%. 

Again, the only real surprise in the month was the aforementioned Baccarat volumes which is a metric we will be closely monitoring.  Given the addition of CityCenter and the sluggish results, the promotional activity in this important segment is ripe for acceleration.  The MGM properties likely will show significant share gains, although a very low hold percentage will prevent the gains from hitting the bottom line.  We believe WYNN and LVS lost Baccarat share in Q2.  Stay tuned.