A weird, and continuing, data point has recently been noticed by many who watch the payback information when it comes to Las Vegas, Nevada: The overall payback for the Las Vegas Strip has started to beat Downtown Las Vegas! This seemed to catch many by surprise, the conventional wisdom of Downtown being a better value potentially being called out.
As I wrote in my previous post about Downtown vs. Strip payback, there isn’t a tremendous difference in the penny slot machines on the strip vs. downtown as an overall average. Add to that lower gambling volumes due to the time of year and the COVID-19 restrictions, and the data will likely swing in different directions.
Let’s compare the slot holds (the percentage casinos kept for themselves), month by month, since casinos reopened. Keep in mind this is an aggregate number of all the casinos, and denominations, for a single month:
| Month | Las Vegas Strip | Downtown |
| June | 6.05% | 4.98% |
| July | 8.21% | 9.31% |
| August | 7.16% | 6.35% |
| September | 8.38% | 10.33% |
| October | 7.52% | 7.65% |
| November | 8.22% | 8.58% |
| December | 6.37% | 8.53% |
Five out of the last seven months, the Strip has beaten Downtown in terms of overall slot paybacks. So did the Strip loosen up their slots and Downtown tightened theirs? Probably not. Here’s what I think is at play:
- Smaller sample sizing for Downtown in particular: Downtown has a fraction of the slots of the Strip, and Video Poker more impactfully weighs on the overall payout. So if less people are playing Video Poker at Downtown casinos, or playing there overall, wilder swings will be expected in the data. And indeed, you see everything from 4.98% to 10.33% in a month. Meanwhile, The Strip, while certainly swinging around a bit more on its own, is in a tighter range of 6.05% to 8.38%.
- The impact of Circa on numbers: Circa’s opening bulked up many of the slot machine numbers, including number of machines and so forth. In my review of The D, I noted how the Video Poker pay tables were underwhelming and that could indicate a preference for lower paybacks on many of the machines. Circa Las Vegas opened with electronic roulette with a 000 space on the wheel, another example of that preference for lower paying games. While downtown was already showing some payback challenges, Circa opening and being an outsized short term impact on the market is likely not helping things. Indeed, the overall penny slot hold increased by about a percentage point on the first two full months of Circa being open. When you figure in places like El Cortez, who advertise looser slots than the Strip, I would expect Circa is pulling the average down pretty heavily.
- Unusual High Denom Reporting Downtown: Downtown has some weird scenarios where the hold on very high denomination amounts like $5, $25 and $100 machines are in the double digits for holds, well off the normal expectation for high denomination machines. Variance is likely playing a part here, where some big wins just didn’t come, and because of the denomination that can certainly skew things further.
Does this make Downtown Las Vegas a worse value? It depends on what you mean. There’s still a lot that makes Downtown Las Vegas a value – better table minimums, better Video Poker pay tables, room rates, food values, etc. – but like the misconception that Laughlin is a better market for slots as well, the data has shown for some time not a huge delta, especially around penny slot machines.
The Strip reporting is averaging a lot of properties together, and I would expect some properties to offer better payback there than others, and Downtown is no different. It helps to look at what’s being offered, and make a determination of what the best decisions are for you.
