Posted on: February 5, 2024, 10:10h.
Last updated on: February 5, 2024, 10:10h.
Some of the glitzier casino hotels on the Las Vegas Strip are getting a lift from elevated baccarat — a game that’s 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, helping the state to a third consecutive annual record. Data indicate that late in 2023, baccarat did plenty of heavy lifting.
The game, which is highly popular in international markets, was heavily played on the Strip last November due in large part to an influx of foreign visitors for the Las Vegas Grand Prix. There was follow-through on that trend in December. Overall, Strip casino operators won $218.7 million on the game last year, a nearly $73 million increase from the prior year. Baccarat hold jumped to 22% in 2023 from 17% in 2022.
The centuries-old game involves players and the banker (dealer) with the two through nine cards sporting values commiserate 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 nine a 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
Prior to the 2006 release of 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 biggest beneficiaries of the Las Vegas Grand Prix were the aforementioned casino hotels. It can be argued that with that in mind, mid-tier integrated resorts don’t see significant baccarat play and thus don’t wring as much benefit the game as they do blackjack or roulette.
Other Las Vegas Tidbits
DeCree also pointed out that there have been no adverse effects to 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 such venue — Durango Casino & Resort — making contributions to that trend despite opening in early December.