Casino Stocks Fall, Despite Nevada Gaming Gains
NEW YORK (
) -- Nevada gaming revenue jumped 11% in October, but despite growing momentum, casino stocks are lackluster Thursday afternoon.
Gaming revenue in the state hit $888.6 million during the month, according to the Nevada Gaming Control Board. The Las Vegas Strip saw a 16.1% surge during the month to $494.8 million, while the Las Vegas locals market generated $169.4 million, a 6.2% uptick year-over-year.
"Even adjusting for sizable better table than last year, October's Nevada Las Vegas Strip results were up 1.6%," wrote Lawrence Klatzkin, analyst at Chapdelaine Credit Partners. "These results mean that on a normalized basis, the Las Vegas Strip has been up nine of the first 10 months of 2010."
The report is another signal that the market has finally started to turn, as convention business shows some recovery.
MGM Resorts
(MGM) - Get Report
is the biggest beneficiary of strong Strip revenues, with 80% of its EBITDA generated in the region.
Wynn Resorts
(WYNN) - Get Report
generates 25% of its EBITDA from the Strip, while
Las Vegas Sands
(LVS) - Get Report
generates approximately 12% to 14%, according to Sterne Agee analyst David Bain.
In the Las Vegas locals market,
Boyd Gaming
(BYD) - Get Report
is the dominant player, with 44% of its EBITDA coming from the market.
Still, despite this positive news, shares of casino operators are in the red, with Boyd tumbling 5.9% to $9.54, MGM down 1.7% to $13.55 and Wynn is about flat.
--Written by Jeanine Poggi in New York.
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