May 2009 statistics released by the Nevada Gaming Control Board this week showed a moderating decline. Gaming revenues were down 8.34 percent in May and off 13.71 percent for the year to date, with revenue on the Las Vegas Strip down 6.36 percent for the month and down 15.31 percent for the year.

The May result compared with a statewide gaming revenue decline of 14.07 percent that was reported for April 2009.

“The revenues that came out today from Nevada indicated that the declines (on the Las Vegas Strip) weren’t as large as some other recently reported declines,” said Matthew Jacob, an analyst with Majestic Research. “I think there are some expectations out there that this is potentially the beginning of a recovery for the industry,” he added. However, he cautioned that his firm’s proprietary data were still not showing the kind of improvement that some investors expect to materialise in the next few months.

Some casino stocks were still down as much as 80 percent or more over the past year and a half.

“We think recovery is going to take longer than maybe the more bullish investors are expecting,” Jacob said.

Jeffrey Logsdon of BMO Capital Markets said in a client note that the statewide results were “clearly a less worse scenario” than the 13.7 percent decline seen in the year-to-date period.

“Our channel checks continue to confirm that Memorial Day weekend was full, albeit at promotional room pricing,” Logsdon said.

JPMorgan’s Joseph Greff said the Strip’s results were the best since September 2008’s 5.2 percent decline.

Nevada casinos won $889 million from gamblers in May, down 8.3 percent compared with their May 2008 win, the official figures revealed. The decline marked the 17th month in a row that the clubs reported declines. The slump persisted despite several Las Vegas events, including Jimmy Buffett and Dave Matthews concerts and the Manny Pacquiao-Ricky Hatton boxing match.

“With a weak month even with the amount of special events going on in Las Vegas, it indicates that we might not be at the bottom yet, that things are still declining at a pretty steep pace,” Control Board analyst Frank Streshley said.

With one more month to report, casino winnings for the 2009 fiscal year total just under $10 billion so far - down 13.7 percent.

Gamblers wagered $12.6 billion during the month, including $10.1 billion in slot machine bets. The balance was wagered on table games.

The report also notes the state collected $50.8 million in taxes based on the May win. That was down 19.9 percent from a year earlier. The collections were the last for the fiscal year that ended June 30, and brought the tax total to $655.4 million, down 15 percent.

Streshley said the fiscal-year tax total was nearly $8 million lower than the figure projected only two months ago by Nevada’s Economic Forum, whose estimates were used by state lawmakers in approving the state’s budget.

A statewide game-by-game breakdown shows that casinos’ slot winnings were off 12.9 percent. Thanks to big losses by baccarat players in Las Vegas, table games were up 1.1 percent compared with May 2008.

Slots accounted for $563.3 million of the total win. That included $260 million won by multi-denomination slots, down 8.3 percent. Penny slots were second, with a win of $156.7 million, down 0.4 percent.

Live games accounted for the balance of the May total. That included $96.2 million won from baccarat players, up 36.6 percent; $87.2 million won on blackjack tables, down 12 percent; $31.1 million on craps, down 18 percent; and $29.2 million on roulette, up 8.6 percent. Sports books won $5.6 million, down 11.4 percent.

Betfair was the subject of a glowing article in the publication Venture Beat this week which looked at the UK betting exchange’s astute move into American horse racing.

The move legally exploits the “carve-outs” in the often confusing US political deal-making process and discriminatory federal laws that permit online betting in horse racing.

Betfair is strongly positioned in the sector following its acquisition of the Los Angeles-based American TV Games Network (TVG), an online horse race betting company with its own TV channel, for $50 million in January 2009.

Though it operates in only 16 states, the ten-year-old TVG operates the largest legal online gambling web site in the U.S., says Tony McAlister, chief technology officer of Betfair. And its horse racing channel reaches a massive 72 million households.

The Venture Beat article reveals that Betfair is now preparing to launch a social network around the TVG web site to stoke interest in betting on the sport.

It is also building applications to let people bet on horse races from sports bars via their mobile phones. To do this, Betfair will have to add about 50 people to its U.S. staff, currently around 170, and another 150 elsewhere. In the United Kingdom, the company has 1 400 employees.

Gerard Cunningham, president of Betfair USA, told Venture Beat that TVG’s web site is currently a Web 1.0 experience. But three weeks ago the company launched Ultimate Track Streaming, a media player on the site that can stream high quality videos of live horse races to viewers. It has also set up blogs for gamblers and a Twitter feed.

Future plans include the addition of live chat so that gamblers can discuss a race as its happening, says Cunningham That should be popular, since gamblers can bet on a race as it progresses.

TVG has apparently stayed out of 34 states because of unclear state gambling laws or strict prohibitions. It has rivals who aren’t quite as cautious, but Betfair is larger than competitors such as Youbet, Xpress Bet and Twin Spires.

Venture Beat opines that one possible hurdle Betfair faces is how to re-energise interest in horse racing, which has seen declining enthusiasm among gamblers. The rewards for success are considerable, the article notes - physical horse racing wagering levels are around $14 billion in the United States, of which TVG is currently handling around $500 million, leaving plenty of room for online expansion.

Betfair appears to have recognised this, and believes that, properly marketed, both online and terrestrial wagering could achieve substantially higher levels. The company is also hopeful that individual states looking for additional tax revenues and competing with other states may make them more amenable to extended horse race gambling.

Cunningham said that these factors all point to good growth prospects ahead, even if only the status quo in maintained.

“By and large, Betfair draws more gamblers because it can more efficiently set favourable odds than bookies, who build their own commission into the odds,” Venture Beat concludes. “Its servers match about 1 000 bets a second, which means it’s about as busy as a stock exchange. The privately held company has six data centers to support the traffic. In the year ended April, 2008, it reported earnings of $69.5 million on revenue of $396 million. (It is not required to disclose earnings but does so).

TVG’s racing channel is based in Los Angeles while its website will be based in San Francisco. Tony McAlister, Betfair’s chief technology officer, was in San Francisco this week, to recruit web developers for the company from Silicon Valley.

Betfair employs more than 400 computer engineers among a global workforce of 1 600 and its betting platform processes more than 5 million transactions on an average day.