In the primary quarter of 2016 (Q1 2016), the U.S. commercial gaming industry recorded the top quarterly revenue leads to over five years.  During that period, the industry generated $9.74 billion in gaming revenue, growing at a rate of twenty-two. percent in comparison to the primary quarter of 2015.

The Q1 2016 revenue growth is most notable as organic growth is still seen inside the nation and the consequences surpassed traditional seasonality expectations, indicating growth is probably going to continue throughout 2016.

IT’S ALL ORGANIC

The growth within existing markets and established casinos remains to be the catalyst for the industry’s growth. Within the first three months of 2016, 18 of the 23 states (78.3 percent) that offered gaming within the first three months of both 2015 and 2016 experienced revenue increases.  When examining the knowledge from the 150 individual casinos monitored by RubinBrown, an analogous trend was noted.  The bulk (59.3 percent) experienced revenues increases through the first quarter. With nearly all of existing casinos and states seeing increasing “same store sales,” the expansion is originating from organic sources and never from market expansion (opening of latest casinos). 

When examining the state level data, a fair more important fact is noted for existing operators: The entire states that grew gaming revenue did so from existing casino operations. 

The only state to peer a vital take pleasure in a brand new casino opening was Iowa, as 89.6 percent of Iowa’s revenue growth came from the outlet of the Wild Rose Casino in Jefferson, Iowa.  However, when taking flight the revenues produced by this new casino, the state would have still recorded an overall increase in gaming revenues. 

Outside the Wild Rose Casino opening in Iowa, there have been two other notable openings impacting the primary quarter revenue numbers.  In Florida, the state benefitted from the Casino at Dania Beach reopening after closing in October 2014 for renovations; however, the state endured a modest 1.1 percent decline in total revenues. The opposite opening was the introduction of casino gaming in Massachusetts on the Plainridge Park Casino.  Previous to the Plainridge Park Casino’s opening in late June 2015, the state didn't have any casinos operating throughout the first quarter of 2015.

UNSEASONABLE

In the last five years, the third quarter of the calendar year has always been the top revenue producing quarter. In this same time frame, the primary quarter had never surpassed a historical Q3 performance… until this trend was broken within the first quarter of 2016.

The first quarter of 2016 surpassed the revenues produced within the third quarter of 2015 ($9.70 billion) and established a brand new all-time high for quarterly revenues ($9.74 billion). The facility for the industry to surpass the Q3 revenue mark and establish an all-time high for quarterly revenues is indicative of the upward momentum in gaming revenues and organic growth seen throughout existing markets.

But important to notice through the review of the Q1 2016 performance was that it was achieved while enduring a modest March revenue performance. Historically, March have been the top revenue producing month during any calendar year (absent large swings within the Las Vegas market) because the industry benefits from the surplus disposable income produced by the tax refund season. But in both 2015 and 2016, federal and state taxing authorities implemented delays in processing tax refunds with the intention to deter fraudulent tax refund claims. On account of these tax refund delays, the gaming industry is seeing a shift in seasonality trends. The spike in gaming revenues historically seen in March is being flattened because the delayed refund payments are pushing the gaming revenues related to tax refund payments further into the April and May. 

During 2016, this trend was most notable in Louisiana, where the state has implemented a 60 day processing time for electronically filed tax returns (39 days longer than the federal processing time).  As a result, the earliest date a Louisiana tax payer could anticipate a reimbursement is March 19, assuming they filed their return on earliest possible date of January 19. This delay in tax refund payments is seen because the primary cause of the state experiencing a 9.7 percent decline in March gaming revenues.

While Q1 established a brand new record in quarterly gaming revenues, the consequences broke seasonal trends. Not just did the primary quarter surpass the former third quarter results, it set a quarterly revenue record while overcoming delays in tax refund payments yielding lower March revenues.

A GLANCE AHEAD

Looking forward, there's much optimism for the gaming industry. While tax refund delays weakened the March revenue results, they are going to provide an additional lift in both April and should. In addition, the third quarter has historically surpassed the primary quarter suggesting growth will continue throughout 2016.

Read More... [Source: Gaming Industry News]