- Off-Strip casinos and taverns have begun rebounding, while Strip properties continue to grapple with the pandemic.
- Gambling revenues for casinos in the suburbs of the Strip were up 10 percent in August compared with the same time in 2019.
- On the contrary, gambling revenue for Strip properties fell 39 percent in August YOY.
- Government stimulus checks and the holding up of the housing market are some factors that may be contributing to the booming local gambling market.
While Las Vegas Strip casinos continue to struggle due to the pandemic, off-Strip ones are beginning to rebound along with taverns.
Chad Beynon, an analyst at Macquarie Capital, says locals are spending their time and money trying their luck some distance away from the heart of the Entertainment Capital of the World.
August saw casinos in the suburbs of the Strip increase gambling revenues by 10 percent compared with the same time in 2019, a Macquarie report published earlier in October revealed. However, gambling revenue at properties on Las Vegas Boulevard fell 39 percent in August year-over-year.
Beynon says many may think that “the locals market would be cautious” because of the layoffs on the Strip, the Strip’s deceleration and the lack of tips for the hospitality industry workers. “Yet, it’s a bright spot,” he added.
Although 90 percent of casinos in Nevada have reopened after more than two months of closure due to the pandemic, business is much different from the way it used to be.
While Fitch Ratings published a report last week showing that the Strip has a long way to recovery, off-Strip business is beginning to boom when compared with the second quarter when local gambling revenue fell 75 percent.
Beynon believes the local gambling market is doing better than the Strip because of three reasons: government stimulus checks, the holding up of the housing market, and the fact that big employers such as Las Vegas Sands Corp., Wynn Resorts, and Red Rock Resorts paid their workers while on leave. Another factor is that many retirees who were unaffected by layoffs call Vegas home.
Locals still have cash and, it appears they are spending it at off-Strip casinos and taverns. Bill “Krackman” Krackomberger, the founder of the sports betting app, KrakWins, says, “These places are killing it.” He adds that the parking lots at local bars with video poker are full.
Red Rock Resorts has 10 off-Strip properties in Silver State. While its stock price has dropped 8 percent since last October, it has recovered 400 percent since collapsing to $3.61 per share in March. Located 10 miles from the Strip, Red Rock Resort is open and doesn’t depend on tourists to survive. Beynon says the target customers for the property are older people who live nearby.
Golden Entertainment, another casino operator that depends on local business, has a chain of 60 taverns. These are local joints that serve beer and food but also offer video poker games. While the company’s stock price is essentially flat since last year, it’s up 260 percent since March.
Business for Strip casinos will continue being sluggish as the local gambling market holds up.