Fall 2015 Issue of Horizons

Strip’s performance. During the first six months of 2015, the entire U.S. commercial gaming industry experienced a $507.0 million increase in gaming revenues when compared to the first six months of 2014. During this period, the Las Vegas Strip only contributed $9.4 million in revenue growth, meaning the regional operators were able to capitalize on $497.6 million in increased gaming revenues. While the first quarter revenue results were attributed to a milder winter in 2015, there is not a primary factor that explains the continued revenue growth outside a continued resurgence in the regional markets. This growth is indicative of the improved economic conditions which have been noticeable through increased consumer spending and continued reductions in unemployment.

which was $74.8 million, or 2.2%, more than the revenue produced in March 2015.

The significance of May outperforming March is important to note as March is consistently the highest revenue-producing month for the U.S. commercial gaming industry, thanks to casino patrons incurring more discretionary spending upon the receipt of their annual tax refunds. Second, May 2015 was the highest revenue- producing month on record for the U.S. commercial gaming industry, and March 2015 was still a top three month for the commercial gaming industry. The top three revenue producing months for the U.S. commercial gaming industry are: The new record established in May 2015 is notable, as the revenue produced is largely attributed to organic growth. Since May 2014, the expansion of new casinos has slowed with the total number of casinos remaining unchanged (five closures and five openings). Reasons for Growth The growth in gaming is due to a continued resurgence in the regional markets. At the end of the first quarter of 2015, 68.8% of the 65 markets monitored by RubinBrown were seeing a year-over-year increase in revenues. Through the first six months of 2015, this number increased to 75.4% of the regional markets experiencing growth. In comparison, only 24.6% of the regional markets experienced growth in the first six months of 2014. Most importantly for the regional operators, the growth in gaming cannot be attributed to large fluctuations in the Las Vegas 1. May 2015 – $3.43 billion 2. March 2014 – $3.37 billion 3. March 2015 – $3.36 billion

Markets in Decline While the revenue growth continues to produce optimism for the overall gaming industry, five states still experienced a decline in gaming revenues. Of the five states enduring declining revenues, three states are continuing to face increased competition from gaming expansion from neighboring states. The three states facing the most significant increases in competition are Delaware, Illinois

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