High-End Gaming in Vegas Keeps Rising Over Lower Tiers

Updated On Jun 11, 2024 by Cameron Bishop

Las Vegas CasinosSummary:

  • Las Vegas Strip executives say high-end gaming is continuing to rise over lower tiers.
  • Future projections show more operators could be affected by the spread.
  • Baccarat play has carried gaming revenue to positive comps in 2023.

Last week’s meeting with C-level management in Las Vegas resulted in a series of interesting conclusions and notes.

Among them is Deutsche Bank analyst Carlo Santarelli’s note to investors. Santarelli believes the trend that is seeing high-end gaming outpacing lower tiers on the Strip could spread even more for some operators.

High-end gaming comparisons are still relatively easy in Q2 2024. Nonetheless, according to operators, the trends will stay in place. Santarelli stated Deutsche Bank does not think hold has yet played a role for most of them.

High-End Gaming, Still “Challenging”

Despite comments from management, Deutsche Bank is still backing up its initial assessment that during the second half of the current year, high-end gaming will continue to be challenging.

Santarelli spoke about the “12 straight quarters of gaming-revenue growth” recorded in Vegas since the market exited the pandemic in Q2 2021 when gambling revenue for Las Vegas went over 2019’s figures for the first time in its recovery process.

He added that, in recent times, “cracks have emerged” as shown by several quarterly reports that indicated a bifurcation of the market with high-end gaming performing “very well” and being boosted by F1 and the Super Bowl, and lower to mid-tier gaming starting to decline.

Santarelli spoke about baccarat play as the only constant that carried gaming revenue to positive comps in the last few months.

He added that the segment had reached a plateau and, despite heated competition, it is expected to slow down and face. This, in turn, would “likely change the sentiment around the growth outlook for Las Vegas”.

“High-End Outperformance Remains Present”

Santarelli acknowledged that “the high-end outperformance remains present” as gaming operators are allowed to charge high prices for higher-end assets.

This means high-end trends are still holding up well. April’s revenue per available hotel room was up 7.7% while May was also “reasonably strong, led by the high end”.

Santarelli also believes lower-end and mid-tier customers will remain softer compared to higher-end patrons in the local ecosystem.

At the same time, the analyst does not believe the promotional environment has experienced important changes with private and single-asset owners continuing to offer the majority of bulk promotional materials.

0 0 votes
Article Rating

Cameron works tirelessly behind the scenes ensuring his many US news stories are factual, informative and brought to you in a timely fashion before most other media outlets have them. He is an investigative journalist at heart who also has a fond interest in the money and business markets too.

Notify of
Inline Feedbacks
View all comments