Penn National Gaming lowered estimates for cash flow and other metrics today, as well as released 1Q14 results that J.P. Morgan analyst Joseph Greff wrote were “generally in line with our … estimates.” According to Penn, player spending has been generally consistent, though its lower-income players are “challenged.” (I would imagine so.) Full-year revenue and cash-flow projections were lowered, partly to take in a worst-case scenario for Argosy Sioux City, which could be forced to close July 1 — not likely, but it’s best not to assume. The difference was not enormous: Morgan had projected $2.6 million in revenue for the year, which Penn has marked down to $2.5 million.
Carlo Santarelli of Deutsche Bank characterized the first-quarter results as “in line.” Sioux City aside, he attributed some of the forthcoming writedown to “an assumption of recent trends carrying through throughout the year and greater than previously forecast cannibalization (Charles Town/Lawrenceburg). We expect this to be the primary focus of conversation on this morning’s call … The development pipeline projected completions and budgets are unchanged from prior targets.”
Twenty-two. That’s how many applicants paid a $1 million application fee to vie for four casino licenses in upstate New York. That’s more than Massachusetts, far more than Kansas, neither of which matches the allure of the Empire State (to cite two recent examples). ““This isn’t going to be a conversation about whose neon sign is bigger. This is going to be about creating the attractions that is going to drive tourism from downstate to upstate,” said Empire Resorts spokesman Charles Degliomini, in a dig at Las Vegas. (Empire parent Genting Group isn’t exactly a blushing violet.)
In addition to Empire, applicants include Genting itself (despite lacking a location), Caesars Entertainment, Trading Cove New York, Foxwoods Resort Casino, Nevele resort, Saratoga Casino & Raceway, Traditions at the Cove Resort, Howe Caverns, Tioga Downs, to name but a few. Caesars may have bigfooted Penn National Gaming and Cordish Gaming clear out of the state with its $750 million plan, as they are unmentioned by the New York Times. [Update: Penn states that it and Cordish are still going ahead with a $750 million Empire State project of their own.] There’s no question that the number of applicants is surprising, given that the state already has five tribal casinos and nine racinos.
Give me a racino or give me death! Not to put any untoward pressure on the Massachusetts Gaming Commission or anything but Suffolk Downs stated yesterday that the current racing season (beginning May 3) would probably be the last unless the MGC gives it a casino. In the lachrymose words of COO Chip Tuttle, “The start of the live race meet here always brings with it a sense of optimism and renewal, although this year that is tempered with concern for our workforce and the future here.”
Tuttle ought to be more worried about Boston Mayor Martin Walsh‘s attempts to kill the Mohegan Sun racino project outright. He also might think upon the dubious future of the sport of kings: racing handle went from $28 million in 2000 to $6.5 million in 2012. The public has voted with its wallet and horseracing is so last century. However, considering the leverage that continued racing gave Penn National in its Plainville racino bid, Tuttle has reason to be optimistic.
Perhaps he’s jealous about all the recent coverage of Sheldon Adelson, but Steve Wynn found a way to get back in the headlines again. He did it by trading profanities with actor, etc. George Clooney. ‘Nuff said.
A 66% drop in profits for International Game Technology was one of yesterday’s headline events. Net revenues were off 15%. That $30 million in workforce cuts didn’t come soon enough to save the quarter, evidently. Wall Street analysts were remarkably further sanguine, even when IGT said it was trimming earnings projections still further. Instead of a year-end range of $1.28-$1.38, they’ll be $1-$1.10 or thereabouts. IGT isn’t just losing floor space to smaller competitors. it’s also seeing inroads made in progressive games. IGT CEO Patti Hart, however, continues to be vindicated by her acquisition of DoubleDown Casino. It drove 86% of IGT’s comparatively measly revenue growth and will shortly be augmented with the ever-popular Wheel of Fortune game. Hart also did a virtuosic job of managing Wall Street‘s expectations.
Noting the 20 cents per share earnings, Deutsche Bank‘s Carlo Santarelli was unfazed: “The result compared favorably to our and Continued >>