China dealt a severe blow to the hopes of Big Gaming this week, declaring the island of Hainan off-limits for gambling. “We cannot at all allow Hainan to operate casinos,” declared resident Communist Party strongman Luo Baoming. This cannot have been well received in the offices of Caesars Entertainment, which hoped to open a Hainan resort this year, or to MGM Resorts International, which already runs MGM Grand Sanya on Hainan’s scenic shores. How big a prize is Hainan? It’s home to a seemingly unimaginable 200 hotels and “has been a huge draw for domestic tourists with more than 22 million overnight stays registered in Hainan in the first eight months of 2013.” MGM and Caesars must be feeling like slot players whose big jackpot was just invalidated.
In a late-breaking story, the U.S. Department of Agriculture has put Dirk Arthur’s Wild Magic — which plays Harrah’s Reno and Harrah’s Laughlin — on notice for animal cruelty. According to The Associated Press, the show received a citation in December and formal warning a month later. Arthur’s been cited “for Continued >>
“Don’t bring me a slot machine and tell me it’s a horse.” — Nebraska state Sen. Dave Bloomfield, stating his opposition to VLT “instant racing” at Cornhusker State racetracks.
Well, they weren’t that dramatic about it. But Boyd Gaming executives surprised Wall Street analysts by announcing their interest in having a Japanese casino. For all the ongoing success of Borgata, we still think of Boyd as a small-casino company, getting by on locals play and Hawaiian tourists. “We’re much larger today than we were in early the early 2000s,” said CEO Keith Smith, who added that it was too early to talk about financing. Small wonder, with $178 million cash on hand against $4.5 billion in debt. Downtown business improved last quarter while Las Vegas locals business remained on a flat trajectory. (“Relatively OK,” said JP Morgan analyst Joseph Greff.) However, Boyd has improved cash flow for four quarters in a row.
A $1 billion writedown on the abandoned Echelon project pushed Boyd to a 4Q13 loss. The company also did the responsible thing, retiring an aggregate $585 million in debt and interest. We like seeing that kind of probity in the gaming biz.