In a stunning reversal of fortune, KG Urban Enterprises has ditched its $650 million New Bedford casino project, citing financial difficulties. This ends seven years of grinding effort to gain civic acceptance, which culminated in a landslide electoral victory earlier this year. It also leaves a Neil Bluhm-backed casino proposal in Brockton as the only one on the table before the Massachusetts Gaming Commission. Said KG Urban Managing Partner Barry M. Gosin, “Despite significant efforts and expenditures on our part, we and our lenders/partners have been unable to create a viable financing package for the project. In particular, both Continue reading →
“[U]nderworld figures were reportedly told to avoid Echo’s Gold Coast property, the Jupiters Hotel & Casino, because their presence might hurt Echo’s chances to win the second Brisbane license.” — from a Global Gaming Business expose of Australian casino operator Echo Entertainment Group‘s cozy relationship to Ozzie criminal elements.
Where MGM Resorts International goes, other casino companies are quick to follow — to Atlanta, in this case. Mayor Kasim Reed (pictured) is being coy about who the new suitors are, other than two are domestically based (would Las Vegas Sands pass on another urban opportunity, having turned down Boston?) and one is from overseas, which surely must be Genting Group. Not that the Hizzoner is a fan of gambling, saying Las Vegas is what it is for a reason but “it would be fiscal malpractice … not to hear these people out.”
Rumors of the potential site continue to circle on doomed Turner Field (the Atlanta Braves go through baseball stadiums like Continue reading →
“What you have put together is a template on how this should be done. “There are good synergies between these two companies.” — Nevada Gaming Commissioner Randolph Townsend, on Golden Gaming‘s takeover of Lakes Entertainment, which was consummated yesterday.
Boyd Gaming doesn’t make Wall Street‘s hit parade very often, so this morning’s dispatch from Deutsche Bank‘s Carlo Santarelli the more remarkable. “The improving regional [gross gaming revenue] climate and intense cost disciplines take our forecasts, and subsequently, our Price Target higher,” he wrote. Second-quarter cash flow comfortably exceeded expectations and Boyd raised projections for full-year cash flow by $32 million.
Business is in a tailspin at Trump Taj Mahal, in part due to Unite-Here‘s call for a boycott of the austerity-minded property. Trump Entertainment Resorts wanted the union muzzled, plus financial compensation. But a federal judge handed CEO Bob Griffin his walking papers, ruling that federal law protected Unite-Here’s actions against the casino. Griffin had argued that bankruptcy law forbade Unite-Here from lobbying casino clients and urging them to avoid the Taj. Union President Robert McDevitt took a victory lap, saying, “We knew at that point that [owner-to-be] Carl Icahn didn’t have the legal right to stop us from talking to Taj Mahal customers.” It remains to be seen whether McDevitt will act upon the union’s strike vote.
Although Paddy Power has lengthened his odds for gaining the White House to 12/1, New Jersey Gov. Chris Christie (R) would be one of the most supportive — if not the most supportive — candidates toward the gaming industry. He’s also taken advantage of the Department of Justice‘s reinterpretation of Wire Act to get the Garden State into Internet gaming (although he downplays the significance of his signature on the enabling legislation). He’s also pushed very, very vigorously for legalized sports betting. His one blemish is recent mistreatment of New Jersey‘s Indian tribes, which could point to a more conservative position on tribal gambling nationwide.
That “maybe” hardens into a certainty when the subject is Jeb Bush, the ex-Florida governor who refused to Continue reading →
Wall Street analysts succeeded in setting their expectation for Las Vegas Sands performance in Macao so low that the company was able to exceed them despite deep, double-digit declines in revenue, including 14% less revenue per hotel room. Lower marketing costs were cited and “retail came in better than expected (retail mall profits were up 21%)” wrote J.P. Morgan analyst Joseph Greff. Also, the decline in premium mass-market play was smaller than that in the base mass-market segment.
Even a slippage at Marina Bay Sands in Singapore was ameliorated by higher premium-mass play from Continue reading →
Macao‘s recession has affected Las Vegas Sands‘ most recent quarterly results and the news isn’t good. You know things are bad when Sands Bethlehem ($137.5 million, +9%) is the lone bright spot. At least LVS had only mildly adverse news on the Strip, where Venelazzo ($346 million) was down 2%. But the numbers from Macao were varying degrees of dire. Even in Singapore, things weren’t so good, with Marina Bay Sands ($713 million) reporting an 11% dip. Getting back to China, hardest hit were Venetian Macao ($739.5 million) down 28% and Sands Cotai Central ($554 million) falling 29%.
So Sands China did have a “blackmail strategy” after all … in the eyes of the Chinese government, that is. According to a report commissioned by Sands and marked eyes-only for Sands China CEO Steven Jacobs, “Many of the officials we contacted were of the view that US intelligence agencies are very active in Macao and that they have penetrated and utilised the US casinos to support their operations,” it read, adding that Sands “is the primary subject” of Peking’s concern: “A reliable source has reported that central Chinese government officials firmly believe that Sands has permitted CIA/FBI agents to operate from within its facilities. These agents apparently ‘monitor mainland government officials’ who gamble in the casinos.”
Did Donald Trump lie to casino regulators when he put his net worth at $3.6 million? He told one of his biographers that “I try” to be honestbut added that his value “goes up and down with markets, and with attitudes, and with feelings, even my own feelings … affect my value to myself.” Isn’t it nice knowing that subjective feelings now impact net worth. How valuable are you feeling today? In the past few weeks, Trump’s self-proclaimed net worth has fluctuated between $8.7 billion and $10 billion. He must have been feeling very good about himself.
“As Macau also is painfully aware, what Beijing gives it can readily take away, and it’s difficult to believe the Communist Party has gone to the trouble it has to cut off illicit money flows through the South China Sea only to have it slip out the Yellow Sea.” — Global Gaming Business correspondent James Rutherford, on the burgeoningSouth Korea casino market.
A recent article in the Las Vegas Review-Journalpoked fun at Massachusetts‘ nascent casino industry and at Penn National Gaming‘s Plainridge Park in particular. All that schadenfreude may not have been gratuitous after all, in view of the gloom presently emanating from the Bay State. With both MGM Springfield and Wynn Resorts looking at 2018 openings (possibly later in Wynn’s case), New England casino expert Clyde Barrow tells the Boston Globe, “You could say the state is losing $1 billion in revenue because of the delay from 2016 to 2018.”
With perhaps a bit of exaggeration, Barrow says the implementation of casino gambling in Massachusetts could last as long as Continue reading →
Caesars Entertainment stock rallied today on news that the company had palliated its junior creditors by offering them a $200 million forbearance fee along with 10% ownership of the REIT, which it characterized as “a substantial improvement in recoveries.” Caesars claims to have a “significant amount” of junior debtors behind the move. It also plumped up the value of its proposed REIT by transferring Harrah’s New Orleans and Harrah’s Laughlin into it if the deal goes through. The Motley Fool‘s Travis Hoium, however, wasn’t buying it. He characterized it as a last-ditch move to keep Caesars Entertainment from toppling into bankruptcy, too. Currently it’s teetering on the precipice, as Judge Benjamin Goldgar prepares to rule on whether lawsuits challenging the alleged “fraudulent conveyances” of assets out of Caesars Entertainment Operating Co. can move forward or not.
“This latest offer at least gives second-lien note holders something to think about, but there’s not an agreement with Continue reading →
After playing hard to get, Pinnacle Entertainment management finally succumbed to the embrace of Gaming & Leisure Properties. It’s a great deal on Pinnacle’s part: It sells its real estate to GLPI for 12.5 times cash flow, an unheard-of multiple for regional casino properties. Since Pinnacle will still be managing the casinos, the onus remains on them to justify GLPI’s (over)payment. However, CEO Anthony Sanfilippo and his team extracted a sweet deal for their shareholders, who will receive 0.85 shares of GLPI stock for every share of Pinnacle they hold.
Connecticut‘s gaming tribes are confident they can beat MGM Springfield to the punch by a wide margin. How wide depends on whether they’re able to use a repurposed building (in which case we could be talking about the end of this year) or have to build the ground up, which could push the timeline out to December 2017. To hear Mohegan Sun and Foxwoods Resort Casino tell it, they’ve got no shortage of interested host communities, from Enfield to Windsor Locks, with Bradley International Airport in the mix. Of course, all this presupposes that the Legislature approves the host-community agreement, off-reservation gaming being terra incognita for the state.
New Caesars Entertainment CEO Mark Frissora scarcely got his
chair warm when former employer Hertz Global Holdings pushed him under the bus, blaming him for a managerial style that led to four years’ worth of “material misstatements [and] inappropriate accounting decisions and the failure to disclose information to an effective review” by the company. Hertz continues to be investigated by the SEC and has had to re-state four years’ revenue reportage. Forbes Magazine named Frissora one of the “Worst CEO screw-ups of 2014,” especially after his job performance got a blistering review from Carl Icahn. You’d think a CEO would be held responsible for the restated-earnings fiasco but …
PayScale.com has been researching the most and least meaningful jobs, and some of it reflects unfavorably on our casino industry. Table game supervisors “report that they do not find their jobs meaningful, 20% actually believe their jobs make the world a worse place.” (Even if Steve Wynn gives them a cut of the dealers’ tips?) That puts them in third place on the dissatisfaction index, outdone only by warehouse pickers (21%) and fast food workers (25%). One would expect a hash slinger at, say, Wendy’s to feel unfulfilled in their work … but pit bosses? This sounds like a serious morale problem that the casino industry should make haste to address.
* Angela Leong, legislator and the power behind the Sociedade de Jogos de Macau throne, Continue reading →