Upper Tier Las Vegas Strip Casinos Boosted by Baccarat

Posted on: February 5, 2024, 10:10h. 

Last updated on: February 5, 2024, 02:07h.

Todd Shriber @etfgodfather Read More

Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Some of the glitzier casino hotels on the Las Vegas Strip are getting a lift from elevated baccarat, a game beloved by well-heeled bettors and those visiting from the Asia-Pacific region.

Driven by Las Vegas, Nevada casinos posted their best month on record in terms of gross gaming revenue (GGR) in December. That helped the state to a third consecutive annual record. Data indicates that late in 2023, baccarat did plenty of the heavy lifting.

The centuries-old game involves players and the banker (dealer) with the two through nine cards sporting values commiserating with the cards’ numbers. The 10 through king have no value, and an ace is worth one point. Baccarat is usually dealt from six- or eight-deck shoes, with the object being to get as close to nine as possible. In a hypothetical example, a player would love to be dealt a nine and a face card. When played properly, baccarat offers players exposure to the lowest house advantage of any table game.

Baccarat Benefits Not Uniform on Strip

Before the 2006 release of the film Casino Royale, in which James Bond (played by Daniel Craig) played Texas Hold ‘Em, baccarat was the staple card game in a slew of other movies in the franchise, adding an aura of glamour to the game.

That’s borne out in reality, as many Strip operators have high minimums at baccarat tables, which typically confines the audience for the game to affluent bettors. Those types of players often flock to Aria, Bellagio, and Cosmopolitan, as well as Caesars Palace and Wynn and Encore on the Strip. Aria, Bellagio, and Cosmopolitan are operated by MGM Resorts International (NYSE: MGM).

Table win was buoyed by strong baccarat win of $219 million, solidly the best month since the pandemic and up 5.5% year over year,” wrote CBRE analyst John DeCree in a recent reprot. “While there was a significant hold benefit of almost 400 basis points above the (trailing 12-month) average, baccarat volume of $993 million is still the post-pandemic high. Baccarat also performed strongly in November with the first annual F1 race. Together, both months’ baccarat trends are positive indicators for higher-end properties on the Strip.”

“Higher-end” may be in the eye of the beholder, but DeCree previously noted that the biggest beneficiaries of the Las Vegas Grand Prix were the aforementioned casino hotels. It can be argued because of that, mid-tier integrated resorts don’t see significant baccarat play, and thus, don’t wring as much benefit from the game as they do from blackjack or roulette.

Other Las Vegas Tidbits

DeCree also pointed out that there have been no adverse effects on Strip occupancy levels following the December debut of the Fontainebleau Las Vegas.

The occupancy increase in December comes despite the new room supply from Fontainebleau,” observed the analyst. “The Fontainebleau opened on December 13 and the Strip appears to have had no issue absorbing the new supply (of 3,600 rooms).”

Likewise, 2023 was a record year for Las Vegas locals’ casinos, with the newest venue, Durango Casino & Resort, making contributions to that trend despite opening in early December.