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 Gaming Control Board. An analysis of the April figures by CB Richard Ellis gaming industry specialists Jacob Oberman and Brent Pirosch shows that the figure is up 4.4% for the calendar year to date. Statewide, the take was down 4.73% to $847.1 million, according to the Gaming Control Board figures.

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

Oberman and Pirosch note that the Nevada Gaming Control Board's gaming revenue report for May "continued the trend of moderate same-store revenue declines." As the CBRE analysts pointed out last month, they expect the comparables for baccarat to get harder and harder as the year goes on. "And, as a result, luxury and non-luxury properties will begin to perform in a more similar manner on a year-over-year basis for the balance of the year," they say in their monthly analysis.

The analysis by Oberman and Pirosch also takes a look at the impact of the economy and demographics on the gaming revenue. "A recovery of gaming revenue in regional markets will not occur until we begin to see meaningful employment growth," they say, noting that employment growth to date has been meager.

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

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

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