LAS VEGAS-Las Vegas Strip gaming revenue dropped by 6.4% to$450.1 million in May compared with the take for May of last year,according to the latest monthly figures from the Nevada GamingControl Board. An analysis of the April figures by CB Richard Ellisgaming industry specialists Jacob Oberman and Brent Pirosch showsthat the figure is up 4.4% for the calendar year to date.Statewide, the take was down 4.73% to $847.1 million, according tothe Gaming Control Board figures.

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The Gaming Control Board figures showed that revenue declined inClark, Washoe and Elko counties, as well as in the Downtown andLaughlin markets, while rising in the North Las Vegas and BoulderStrip markets, with Mesquite showing a 5.88% decrease to $9.88million.

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Oberman and Pirosch note that the Nevada Gaming Control Board'sgaming revenue report for May "continued the trend of moderatesame-store revenue declines." As the CBRE analysts pointed out lastmonth, they expect the comparables for baccarat to get harder andharder as the year goes on. "And, as a result, luxury andnon-luxury properties will begin to perform in a more similarmanner on a year-over-year basis for the balance of the year," theysay in their monthly analysis.

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The analysis by Oberman and Pirosch also takes a look at theimpact of the economy and demographics on the gaming revenue. "Arecovery of gaming revenue in regional markets will not occur untilwe begin to see meaningful employment growth," they say, notingthat employment growth to date has been meager.

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Along with a weak employment picture, another explanation forthe subpar performance is the age distribution of casino goers.Among the many detailed points the analysts make is that "Wealthhas been obliterated, and the best bet for many 50-somethings hasbeen to spend less on discretionary items like gaming, which iswhat has happened in the last year." In addition, "Recent retireeshave had to reset their consumption expectations (if they have beenable to retire at all), and as such their gambling spending habitscould be negatively impacted for years to come."

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The CBRE analysis says that the good news for casinos is that"Younger people are less concerned about retirement, and althoughtheir wealth has also been reduced, it would make logical sense tous that they would return to their normal casino spending habitsquicker or at least at a faster rate than baby boomers and retireeswhen the employment picture brightens."

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On a relative basis, casino markets such as the Las Vegas Stripcould outperform markets such as retiree havens like Laughlin andSouth Florida in the shorter term, Oberman and Pirosch conclude."With that being said, the last several months has shown us thatthere will be continued headwinds from the drop-off in baby boomerand retiree gaming spending for all markets for some time tocome."

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