Episode Transcript
[00:00:12] Speaker A: Hello, everybody. Welcome back to Right to the Source. My name is Robin Harrison and I'm here, as ever, with the Calvin to my Hobbs, Mr. Ed Birkin. Ed, how are you today?
[00:00:23] Speaker B: Yeah, I'm good, thanks.
Cartoon, isn't it? I'm thinking like.
[00:00:30] Speaker A: Yeah, like a newspaper comic strip.
Small excitable boy and his tiger.
[00:00:38] Speaker B: Am I the tiger?
[00:00:39] Speaker A: No, you're the small excitable boy.
[00:00:42] Speaker B: Okay.
[00:00:44] Speaker A: It was very good. And the guy who did it never really licensed it or anything, so always kind of stayed true to what it was.
That was quite nice, you know, and
[00:00:56] Speaker B: this niche and unknown.
[00:00:58] Speaker A: No, no, it's. It was very big and it was very well known. And he'd do like collections of the.
Of the comic strips, but it was never merch, it was never really merchandised. It was never adapted for tv. And when he stopped it, he just stopped it and retired.
[00:01:19] Speaker B: Look, I can kind of see why it wasn't done for tv, but then
[00:01:23] Speaker A: again, it would have. Honestly, it would have worked in tv. There was a lot of flights of fancy. It was very funny, it was great. But he just stayed true to the art. It's kind of beautiful.
[00:01:39] Speaker B: I know what to get you for your birthday.
[00:01:43] Speaker A: And talking of things that are slightly uglier, Sheffield Wednesday.
Is that the earliest relegation in football?
Well, probably not in football history, but it's got to be the earliest.
[00:02:02] Speaker B: It probably is. So I was there the weekend, or at least I watched half the game, didn't go out for the second half, which a lot of people criticize, but it was terrible.
So I just had to stay inside and watch the Guinness. Watch the TV of it with Guinness.
[00:02:18] Speaker A: Again, this.
[00:02:20] Speaker B: So these are some records we're going to get this season.
Fewest points ever in the football league. This isn't just the championship.
Only team on minus points.
The furthest adrift of safety.
[00:02:34] Speaker A: 41 from safety when relegation was confirmed.
[00:02:41] Speaker B: We are probably going to have the fewest wins. Fewest WINS Ever is two.
Rochdale in 1973-74.
[00:02:49] Speaker A: How many you are.
You got one.
[00:02:54] Speaker B: We're probably going to be the only team to go an entire season without a home win.
We are likely to have the most defeats ever in a season.
And we could also get the most consecutive defeats unless we salvage draw at some point.
Yeah. So no, you know, it's. It's good. But we're not talking about Sheffield Wednesday. I would. No. And even. Great, because that's not really an injustice. The injustice that has happened recently is the Canadian men's ice hockey team losing to the US in the final having completely dominated them. So they had 42 shots, the USA's 28.
Wow. If you try and turn that into expected goals because obviously shots can come.
[00:03:41] Speaker A: No, I can't stand all this.
[00:03:43] Speaker B: I know. But I want rather than speculative stuff. I asked.
[00:03:46] Speaker A: Okay.
[00:03:47] Speaker B: AI to look at it based on the slot shots versus inner slot shots, which is a higher danger area.
It should have been about 3.5 to 2.2 up to Canada against the U.S.
the. The candle lost in overtime.
And what was more galling, as well as my favorite player, Connor McDavid, captain of the Oilers, you know, losing, although he did get MVP for the tournament.
Something Canada missed an open goal with 10 minutes to go. Like completely open net with 10 minutes left. And it was missed by the NHL's leading scorer. So like, that's the best approach. NHL in the final, 10 minutes left, just missing an open goal.
But you know, my team in the office did get me.
Did get me that for my birthday.
[00:04:38] Speaker A: A little like Connor McDavid.
[00:04:41] Speaker B: No, almost Connor.
So Connor McDavid is a guy, but, you know, this is a previous oiler nicknamed the Great One.
[00:04:51] Speaker A: Wayne Gretzky.
[00:04:52] Speaker B: Wayne Gretzky.
[00:04:53] Speaker A: Wayne Gretzky. I enjoyed him at the World cup draw.
So.
[00:04:58] Speaker B: Yeah. And you know who his daughter's married to, but I hope I get.
[00:05:04] Speaker A: I don't actually.
Bizarrely, I know that Tony Hawk's daughter is married to.
No, Tony Hawk's son is married to Kurt Cobain's daughter.
So is it. Is it the progeny of a famous musician?
[00:05:24] Speaker B: No, no, I. I wouldn't know that.
Dustin Johnson, golfer, dj.
[00:05:33] Speaker A: Okay.
[00:05:34] Speaker B: He's won. Yeah. Multiple majors, although he's now on the live tour. Anyway, that's a little fun fact for you. So before we go into. Into gambling data, I see you guys managed to salvage a late draw with Rangers, but Tony Bloom's heart seem to be marching on, don't they?
[00:05:52] Speaker A: Yeah, they do.
Like, first half we were dreadful, like, genuinely awful. And one of. One of the other lots scored.
Outstanding goal. Overhead kick. It was fantastic.
Second half we played brilliantly, but we were already 2 nil down. And.
And even like the goal, the goal at the end, I mean, I think we deserve to score it on balance because of the second half, but even then the save at first was fantastic, but obviously we got the rebound and we've got a game in hand against Aberdeen, but hearts do seem quite relaxed, relentless. And I think both sides of the old firm seem to conspire to mess it up as soon as we Think they're reachable, basically.
So it's frustrating, but it is interesting to think of another club winning the league.
Anyway, I'm trying not to be better.
[00:07:11] Speaker B: Some excitement in Scottish football for once. Okay.
[00:07:14] Speaker A: Yes.
[00:07:14] Speaker B: Right. Well, you sent me a message saying you wanted to talk about Vegas. And I read the IGB reporting on it and it's all. Vegas is still terrible, January is down, blah, blah, blah.
Is that. Is that your kind of take on it?
[00:07:30] Speaker A: It's not that it's terrible, it's that things are down and there are. There is. It does feel as if there is.
There is. There is less visitation, there are less, you know, there's less revenue coming from the Strip. But Nevada still finished at one point, what was it, 1.34 billion in revenue for January.
And you think back to pre Covid, you know, when Nevada was hitting a billion a month, that was quite a thing. And then it's returned to that and it's been broadly consistent.
And just thinking back to when we were in Vegas and we were talking to Jonathan Josel, one of the things that he obviously pointed out in that great episode we did with him was that, well, once you've hit these high standards, there is difficult to maintain things that high.
So.
So I'm. So I'm kind of curious what you think. I mean, like, looking at the data, do you feel that Vegas is really in decline?
Do you feel that things are shifting away from the city? Or do you feel that there is.
This is potentially almost a bit of a kind of reset look.
[00:09:11] Speaker B: I think it's not very often you see a chart do that. They tend to kind of oscillate in, you know, downwards fashion.
And I think it needs to be put in perspective. So is Vegas down? Well, yeah, headline figures. But let's look into a little bit of detail. So just January this year versus, you know, the 20th of January 25th. Yes, it's down, but gaming machines, which is going to mass play is flats.
Blackjack, craps, roulette on combined are up 8%.
It's only really down because Baccarat in particular and Pai gow are down 40%. And that's because last year they had a ridiculous GGR hold margin.
[00:09:52] Speaker A: Yeah, it was 27% last year and I think it's down to 14. Is it?
[00:09:59] Speaker B: So, yeah, it's, you know, if you look into it, I mean, the underlying performance isn't. Isn't bad.
Occupancy is up. Etc now international travels down.
[00:10:09] Speaker A: Yeah.
[00:10:10] Speaker B: But again, there's a couple of reasons you know, there are some pissed off Mexicans and Canadians who probably don't particularly want to go there. And that's proven by the fact that international travel from Mexico and Canada is, is still down materially.
[00:10:24] Speaker A: Yeah.
[00:10:25] Speaker B: But then also there's a gone, which is, there's one of the low cost airlines as well going to Nevada that's gone into administrative chapter 11 or whatever they call or something's happened where their flights are down 70% year on year. So, so there's a few things which are affecting visitation, but overall visitation is, isn't that bad.
And as I say, really there's a huge hold issue when it comes to backgrass and pa.
Now if we look at January 26th versus January 24th, it's up 5% and it's up 6% versus January 23rd.
So as, as Jonathan pointed out there, you know, if you're smashing it and having a record year or record month, then the comps are harder. So yeah, it's, it's not kind of continuing to go from strength to strength, but this is hardly a like, oh, Vegas is dying and everything's changed. I mean, it's.
And then as for the betting, look, you know, again, I saw people speculating our prediction markets causing it again. I don't think so. The fact is you said visitations down a bit. You had DraftKings and Fandral pulled out the market.
[00:11:30] Speaker A: Yep. You know, were they actually active in the market though?
[00:11:36] Speaker B: I mean, they weren't big. That's okay. I don't think they were split out.
But also, you know, I know this is January data, not February for the super bowl, but yeah, the super bowl was down, but the super bowl wasn't.
There weren't teams that people were expecting to be in it. It wasn't something that, you know, made it this, this event that everyone wanted to.
[00:11:59] Speaker A: Yeah, this clash of the Titans, like Eagles versus, you know, Chiefs.
[00:12:04] Speaker B: Exactly.
[00:12:04] Speaker A: So that's, yeah, that's a big game. So. So yeah, that's, that's a fair point.
[00:12:09] Speaker B: Weakness, but it's not, I think you can read, read too much into the headline figures. You know, it's, it's weakness and January alone, if you're looking at it on a standalone basis, the weakness is because it's against tough comps. And the only weakness really is the very high margins that you had last year in, in, in Baccarat and Paigal. So. But you know, that's not saying that all the underlying indicators are very strong.
Yeah, it's just going through a Bit of a weaker period. But this idea, it's in some tailspin and the Vegas store is dead I think is, you know, we'll see. Far fetched. I think the data does not, does not back that up yet.
If it will in the future, who knows.
[00:12:50] Speaker A: It's interesting though that this, I suppose all of last year really this sort of undercurrent of.
I don't know, I mean, would you call it fear mongering? Just concern about Vegas performance has endured and, and obviously quite, you know, quite a few of the big operators did finish down in the fourth quarter last year.
But it's, it's a funny one. You know, it feels almost like it's something that becomes a bit of a self fulfilling prophecy, this constant fear and that there's some kind of big reckoning coming for Las Vegas.
But it never seems to be quite borne out. It never seems to quite hit like an alarming decline.
[00:13:52] Speaker B: Okay, so let's just look at what. So if we look at their fiscal year, so we're adding together Nevada total gaming grace win. So let's forget about the script for a moment. Just Navarro as a whole in their fiscal year which is the end of June, then in June 24th they had 15 points, 77 billion.
And in June 25th for the year they hit 15.64. So it was down 0.8% year on year.
Now, okay, fine, if you really want to be a bit more anal about things, we can look at inflation of 2.7%. So in real terms down three and a half percent.
You know, the year before it was up 4.4%.
So and again real terms probably up a couple of percent. So it's not, you know, it, yeah, it, it, it's a, it's a little weak. But let's be honest, you know, not every industry can continue to outperform the overall economy every single year.
So I'm sure people would like it to continue to be stronger growth. If we look at it and say, right, what's it done essentially? What's it done in the first. So July 1, 2, 3, 4, 7 months of this fiscal year.
What do you reckon revenues are versus the first seven months last fiscal year?
[00:15:22] Speaker A: A first seven months this fiscal year.
[00:15:24] Speaker B: So that includes this Jan data that's Obviously, yeah,
[00:15:30] Speaker A: maybe about 8, 9 billion.
[00:15:33] Speaker B: Tracking it roughly year on year. How's the performance?
[00:15:36] Speaker A: All right, relatively flat, maybe maybe up marginally. Down marginally.
[00:15:44] Speaker B: But first seven months to January 25th, we're up.01% year on year. So flat, you know, we're just talking more terms this year. It's at 0.7%. So again, but, but it's not this whole. If, if you just listen to the, the commentary about it, you'd expect it to be down 5%, 8%.
So it's just, just holding flat. It's, you know, there's no.
Yeah, it's in real terms down a bit.
I think they said that even in, in January there's this terrible month. Hotel price, you know, occupancy was fine. Hotel price, average room was up. So, so revpar was up a bit.
You know, there'll be other things that happen with it. You know how when the F1 comes to town, how's that going to be?
Don't forget when did it have the super bowl?
[00:16:37] Speaker A: Was that 24?
[00:16:40] Speaker B: Because again you've got that.
Yeah, I think it was.
So you know you also have other, other entertainment stuff which goes there. So yeah, 24.
So that's in FY25. So, so that's an FY24 because it's Feb, you know, so the, the tougher comps so that it's, it's doing okay, you know, it's just not doing what. Obviously if you're an owner in the stocks there, you want it to be growing ahead of inflation and everything else rather than just kind of holding itself flat.
There are some of the, I think the locals markets again are doing better though than the Strip and some of the companies around those are doing better than maybe some of the bigger ones.
[00:17:28] Speaker A: Yeah, the locals market does seem, or at least the locals operators do seem to be performing slightly stronger.
[00:17:41] Speaker B: Yeah, US Gaming is not going to be delivering, you know, standout growth. There will be individual markets especially ones where you know, potentially have expansion of VLTs or long cleaner games machines or you have a new casino open.
[00:18:00] Speaker A: Yeah.
[00:18:01] Speaker B: Realistically, you know, can you expect.
Is Nevada ever going to be having, you know, stellar, stellar growth unless there's some big, you know, one off events, you know, post lockdown recovery, et cetera.
[00:18:16] Speaker A: I suppose even, you know, the advent of sports in the city because you've had, you've had the, the Raiders and the Allegiant opening. Before that you had the Golden Knights and the T Mobile arena.
I mean is it going to get a massive bump from the haze going there?
Like it's potentially going to get a bit more but it's, it does feel like it's had a lot of these sort of springboards that's going to bring a new visitation, like something like the sphere, I don't really feel that's. At least I wouldn't imagine that is going to bring in massive new visitation. It's an add on to an existing trip. Whereas with sports, you know, it's fans, it's coming in to see their team. So there is, you know, there is kind of an attraction for people to come, maybe a different time of year, for example.
[00:19:14] Speaker B: Put that into context of just the sheer scale of visitation, you know, filling up.
Yeah, yeah. I've been to watch the NHL there and it's great. But you know, filling that stadium, you know, and I know there's a hell of a lot of NHL games, but you know, 50 times a year, 40 times a year isn't going to really move the dial on overall visitation. If we look at Nevada as a whole, the gross gambling win. Let me give you some numbers.
Go back to 2004 growth. 6%, 9.4%, 10.5%.
That was very strong growth back in the early 2000s. 4% in 2007.
Then you had the financial crisis 2008, down 3%, down 14, down 5 again in 2010, up 3, up one and a half.
0.8, 1.6, 2015 down 1.5. 2016 up 0.6. So, you know, if we're looking at 27, 2016, 12.2 billion, and you compare that to 2007, 14.4. That's the bit where you kind of go, oh crap, you know, this is now.
Well, it's now at eight, nine years on and we're still down in nominal terms quite a lot. We haven't actually had the post post financial crisis recovery. Really.
Then it was growing 3.6 in 2017, 2.9, 2018, 0.3% in 2019, and it collapsed 22% in 2020 because of COVID Yeah. Then you had strong growth. 21, 22, 19 and 33. 23, 2%, 2024, 3.8 and 2025 is flat, you know, 0.2. So, you know, it's. It's the highest level it's ever been, but it's performing. You know, the last few years have been stellar growth compared to what happened before. It is more than recovered all of its pre. If we look at FY, FY25.
[00:21:13] Speaker A: Yeah.
[00:21:13] Speaker B: Of the total market and compare it to 2019, okay.
That is up 32% now in six years.
So if you go 2007 for the financial crash crash, 1, 2, 3, 4, 5, 6, 2013, it was still down 16%.
So this year you've got something which is 32% higher than it was six years ago when we had for pre covered and before the market was only growing at 1ish percent a year, 2% a year and that's when it was 16 low and it was pre financial crisis. So you know, and the structural things find people then spending less and you know, banking bankers weren't just going there and having big parties. But yes, say I think Jonathan Jostle got it completely right. You know we are coming off a period of very, very strong growth. So if you can have. And with all the other disruption that's happening around, if you could have a couple of years with being flat down a couple of percent, that's not a bad situation.
And you've got cost inflation so it's not great profit the companies but things don't go up in a straight line.
[00:22:24] Speaker A: No,
[00:22:27] Speaker B: that's my opinion.
[00:22:27] Speaker A: Yeah, I mean I think that's. Yeah, I mean that's a very well argued point.
[00:22:33] Speaker B: Thank you.
[00:22:34] Speaker A: Yeah and, and technically this is us I suppose sounding a note of guarded optimism.
This is very different from our usual doom and gloom.
[00:22:47] Speaker B: Everything has to be amazing or terrible and quite often most things are neither.
[00:22:53] Speaker A: Yeah, most things go straight down the middle in a sort of gray area or you don't, you're not overwhelmed, you're not underwhelmed, you're just whelmed to butcher.
[00:23:05] Speaker B: I mean, you know, I think that
[00:23:06] Speaker A: was 10 things I hate about you that came from.
I mean it was a good, it's a great film.
[00:23:13] Speaker B: I mean there's, there's a lot of great rom coms.
I mean look, yeah there are terrible things happening in the world. Yeah.
Seeing Canada have, have the, you know the, the gold medal robbed off them by the American team. I would put, put up there but you know, the current situation in Nevada is not one of them.
[00:23:37] Speaker A: No, I suppose rationality, that feels like a good place to wrap up for this week. It's a.
[00:23:48] Speaker B: What are we going to talk about next week?
[00:23:49] Speaker A: You brought it up a few weeks ago but calling it igbh, which is a horrific name for it where we take the real world events covered in IGB we cross reference that with H2's most trusted data.
[00:24:07] Speaker B: Suppose we're going to have to start getting March Madness and even World cup estimates out there soon, aren't we? Yeah, it's soon going to be there.
I mean I notice college basketball scandals and all sorts.
I know this is from a couple of months ago or five weeks ago on your, on your website but yeah, it's.
I think they're going to keep coming. All of these.
All of these potential integrity issues.
[00:24:37] Speaker A: Yes.
[00:24:37] Speaker B: The nature of it, isn't it?
[00:24:40] Speaker A: Well, everyone, thanks for listening. We'll be back next week with another episode of Right to the Source with Robin Harrison and Ed Birkin. See you next time.
[00:24:49] Speaker B: All right. And by the time you've edited out all of our crap, it's going to be a short episode, so that's good for people. Yeah.
[00:24:55] Speaker A: Digestible. Very unlike us.
