MGM’s cost-discipline difficulties; Wynn framed in Boston

As fast as MGM Resorts International can sell off non-core assets, the proceeds are consumed by new construction. Case in NationalHarbor1point: MGM National Harbor, whose initial $925 million cost has crept up to $1.3 billion. That’s money that can’t go to debt servicing and MGM is the second-most highly leveraged company in gaming. (Cautionary note: Caesars Entertainment is #1.) Having deployed 10 construction cranes and sunk 6,400 pilings, MGM’s course is set, with a late-2016 opening the eventual goal. General Manager Bill Boasberg helped oversee CityCenter and Aria, and has to like the odds of National Harbor better than his two previous projects.

The Springfield Republican describes the project as “a 125,000 square-foot casino that includes 3,300 video lottery terminals and National Harbor room160 table games; a roughly 26,500 square-foot spa and salon; a transformable arena with 3,000 seats; 18,000 square-feet of retail space; 27,000 square-feet of meeting space and 12 restaurants,” plus a 308-room hotel. MGM projects it will draw 17,000 visitors a day and, at those proportions, it will need to. Some of the features, like motion-sensor lighting, will be familiar from Aria and MGM’s other recent Las Vegas Strip properties.

* Boston Mayor Martin “McCheese” Walsh (below) caught a nasty sideswipe from federal authorities who are prosecuting the three men (Charles Lightbody, Anthony Gattineri and Dustin DeNunzio) who sold Steve Wynn the land on which Wynn Everett will eventually stand. In a lawsuit against the walshMassachusetts Gaming Commission, Boston attorneys accused the feds of giving a pair of private investigators access to sensitive documents and wiretaps. Not only do the investigators deny working for Wynn at the time, they’re seconded by Assistant U.S. Attorney Kristina Barclay, who characterizes Walsh’s accusations as based “on a rumor spewed and spun by the City of Boston in a vicious civil lawsuit against the Massachusetts Gaming Commission.” The city is pushing for a disclosure of the evidence, which could be embarrassing if there’s nothing to disclose.

The massive snit fit by Boston, Revere and Somerville is coming at Mohegan Sun at Pocono Downssteep price to taxpayers: $1.4 million so far … and more if a Sept. 22 hearing permits the ligitation to go forward. Personally, were I a casino developer, I’d have serious questions about going forward in lawsuit-happy Massachusetts, where the inmates truly seem to be running the asylum. Revere Mayor Daniel Rizzo, for his part, is in the pocket of Mohegan Sun, which is paying for his city’s litigation. Gee, no hidden agenda there.

Meanwhile, only $80,000 remains of the MGC’s legal budget, so this may be a case of spending the commission into oblivion. Somerville Rizzohas to be complimented for getting a good deal on legal representation, spending only 79 grand to date. The sentiments of all three cities are essentially summarized by Mayor Rizzo (left), who whined, “We do not believe that the residents of Revere received a fair outcome. The city has lost many millions of dollars in improvements, revenue, and jobs as a result of the Gaming Commission’s flawed and tainted process.” If you don’t like the rules, don’t play the game.

* Deciding that if it can’t beat ’em it better join ’em, Penn National Gaming is bidding on an undisclosed slot route in Illinois, with 1,100 slots up for grabs. If Penn’s doing it, can Caesars Entertainment and Boyd Gaming be far behind?

* If you visit only one tourist attraction in Las Vegas, make it the Mob Museum. It’s so rich in content and atmosphere that my wife and I spent three hours there and only made it halfway through the exhibits. Chalk it up as “unfinished business.”

Posted in Architecture, Boyd Gaming, CityCenter, Downtown, Harrah's, history, Illinois, Massachusetts, MGM Mirage, Penn National, Slot routes, Steve Wynn, The Strip | Leave a comment

McCain, NIGC butt heads; Paper Tiger

U.S. senators put the squeeze on the National Indian Gaming Commission and allies like the National Indian Gaming Association at a recent hearing. Sen. John Barrasso (R) put the mccaingripes in a nutshell when he said, “The commission is not effectively promoting voluntary compliance with federal guidelines related to gaming regulatory standards.” NIGA Chairman Ernie Stevensdefended the tribes’ plethora of self-regulatory regimes by saying, “I challenge anyone to find a better regulatory system worldwide.” (I can think of a few.)

That wasn’t good enough for Sen. John McCain (R), who noted that the General Accounting Office found 25% of tribal casinos to be at Continue reading

Posted in Economy, Genting, Kazuo Okada, Macau, Melco Crown Entertainment, Philippines, Politics, Regulation, Sheldon Adelson, Tribal | Leave a comment

Adelson push stuck in the mud?; Alabama wants gambling

Tireless blogger Steve Ruddock contends that we have good reason to be optimistic about the fate of Sheldon Adelson‘s fatwa against Sheldon_Adelson dye jobInternet gambling. For starters, there’s the sheer slothfulness of Congress itself: How many times has it promised, say, comprehensive immigration reform and delivered squat? Besides, Adelson’s congressional flunkies have moved off Restoring America’s Wire Act (“a beached whale,” according to a GOP lobbyist) and are trying the more oblique route of freezing state-by-state legalization — which still raises vexing Tenth Amendment questions — while conducting a fan dance “study” of the issue. You can bet they Continue reading

Posted in Alabama, California, Churchill Downs, Cosmopolitan, Election, Georgia, Internet gambling, Politics, Sheldon Adelson, Technology, The Strip, Tribal | Leave a comment

Quote of the Day

“We build resorts and we are bringing to Boston a destination resort. Hopefully, they will treat us with softer hands. It will feel good when they stop hitting us.” — Steve Wynn, lamenting his treatment by Massachusetts officials.

Posted in Massachusetts, Steve Wynn | Leave a comment

Meet Galaxy Entertainment; The lion grumbles; Steve Wynn gets in touch with inner Scrooge

In Macao, “a pharaonic exercise in overbuilding” may be a canny strategy for a post-crisis economy. Once the Chinese government Galaxy Macaodrives the money launderers from the Macanese temple and develops adjacent Hengqin Island into a family friendly plethora of resorts and attractions, Macao’s image could be almost wholly reinvented. Or, as Templeton Emerging Markets Group Chairman Mark Mobius says, “Once they scrap the image of being a center for money laundering and other illicit activities, Macao will be transformed into an entertainment center like Las Vegas.”

At the forefront of this is Galaxy Entertainment, which is proceeding with all deliberate speed on additional casino construction as well as Continue reading

Posted in Economy, Galaxy Entertainment, International, Macau, MGM Mirage, Regulation, Reno, Steve Wynn, The Strip, Tribal, Wall Street, Wisconsin | Leave a comment

Wynn splits expectations

Wynn Resorts split Wall Street expectations for cash flow in Macao last quarter, as well as on the Las Vegas Strip. Analyst Carlo Santarelli of Deutsche Bank said Wynn’s Vegas room revenue stevewynn“wasn’t great” and characterized management’s projections as “a tad aggressive.” As for the Macao, although Wynn did better than anticipated, Santarelli opined “it’s very difficult to believe Macau is bottoming with firm conviction … we believe WYNN is the most appropriate way to play the potential fundamental/sentiment shift we would anticipate accompanying the trend stability [in a best-case scenario]. Accordingly, while we do not believe we are out of the woods yet as it pertains to Macau, we continue to believe the longer term optionality in WYNN is compelling.”

Despite a significant drop in table play, Wynn held steady in Continue reading

Posted in Cirque du Soleil, Downtown, Economy, Entertainment, Macau, Massachusetts, Planet Hollywood, Steve Wynn, Tamares Group, Technology, The Strip, Transportation, Wall Street | 1 Comment

Quote of the Day

“I shudder to think what Indian country would look like without the revenue that comes in from Indian gaming.” — Assistant Secretary for Indian Affairs Kevin Washburn, testifying on the financial impact of tribal casinos.

Posted in Economy, Tribal | Leave a comment

This is Vegas on drugs

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Venetian Bangkok?; Online gaming gains a champion

Las Vegas Sands has let it be known that, should Thailand legalize casinos, it would like to get a foot in the door — in the form of a sheldon-tuxmetaresort like its $5.7 billion Marina Bay Sands in Singapore. That’s all well and good but the Thai government remains hopelessly at odds with itself on the issue. When National Police Chief General Somyot Poompanmoung voiced his approval of legalized casinos, Thai strongman Prime Minister General Prayut Chan-O-cha told him to put a sock in it. The country is still without a new constitution and many parliamentarians would rather concentrate upon that.

Even Tourism & Sports Minister Kobkarn Wattanavrangkul, whom one would think would support casinos, expressed Continue reading

Posted in Florida, International, Japan, Seminole Tribe, Sheldon Adelson, Singapore, South Korea | Leave a comment

Mirage sold?; Cosmo post-mortem; Ivey counterattacks

Our crackerjack research department at LVA is hot on the trail of a report that MGM Resorts International is going to shuck one of its mirage-pic2signature properties, The Mirage, lock, stock and volcano. A sale of the megaresort that changed Las Vegas irrevocably has been bruited about for years and MGM CEO Jim Murren has been on an asset-selling freny of late. Starwood Capital Group, fresh from selling the Riviera, is the mooted buyer. Fast-rising Paragon Gaming would be jobbed in to run the hotel-casino with which Steve Wynn changed the template of Vegas resorts forever, spurring countless imitations — and in the face of rampant skepticism, it should be remembered.

It may not remain “The Mirage,” though, as Continue reading

Posted in Atlantic City, Boyd Gaming, Cosmopolitan, Idaho, International, MGM Mirage, North Las Vegas, Riviera, Steve Wynn, Tamares Group, Technology, The Strip, Tribal | 2 Comments

Baccarat blowout on Strip; Ader strikes again

Strip casinos had the impossible task of keeping up with last June’s baccarat tally (when revenues shot up 155%) and, as might be expected, Baccaratfell off the pace. The volume of play plunged 43% and revenue tumbled 57%. As for other table games, wagers were down 4.5% but the house held its own, with revenues flat from last year. Wrote J.P. Morgan analyst Joseph Greff, “we expect the market to continue to experiencing volatility in baccarat play given a likely slowdown in Chinese players.”

The contraction in baccarat play contributed mightily to a 16% decline in Strip gaming revenues. Even slots disappointed, with Continue reading

Posted in Boulder Strip, Entertainment, Internet gambling, Lake Tahoe, Laughlin, Mesquite, Planet Hollywood, Reno, The Strip, Wall Street | Leave a comment

Shocker in Massachusetts; Successes and setbacks for Penn

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 NewBedfordcasinoacceptance, 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

Posted in Election, Environment, Florida, Foxwoods, GLPI, Illinois, Internet gambling, Maine, Massachusetts, Neil Bluhm, Ohio, Penn National, Pennsylvania, Racinos, Regulation, Scientific Games, Steve Wynn, Taxes, Tribal, Wall Street | Leave a comment

Up in smoke

We know that Cosmopolitan of Las Vegas owner Blackstone Group wanted to change perceptions of the property but I don’t this is what they had in mind. One measly cigarette seems to have been all it took to send the resort’s Bamboo Pool area up in a cloud of dense Continue reading

Posted in Cosmopolitan, history, Horseracing, International, Macau, Monte Carlo fire, Pinnacle Entertainment, The Strip | Leave a comment

Quote of the Day

“[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.

Posted in Australia, The Mob | Leave a comment

MGM’s march to the sea; REITmania explained

Where MGM Resorts International goes, other casino companies Kasim Reedare 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

Posted in Baseball, Boulder Strip, Genting, Georgia, GLPI, Massachusetts, MGM Mirage, Ohio, Penn National, Pinnacle Entertainment, Politics, Regulation, Sheldon Adelson, Sports, The Strip, Wall Street | Leave a comment

Quote of the Day

“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.

Posted in Golden Gaming, Lyle Berman, Regulation | Leave a comment

Boyd gets Wall Street love; Louisiana expansion slows

Boyd Gaming doesn’t make Wall Street‘s hit parade very often, so this morning’s dispatch from Deutsche Bank‘s Carlo Santarelli the boyd-gaming-200more 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.

J.P. Morgan analyst Joseph Greff was also impressed with Boyd’s numbers, both in terms of Continue reading

Posted in Atlantic City, Downtown, Economy, Eldorado Resorts, Harrah's, Isle of Capri, Louisiana, MGM Mirage, Penn National, Pinnacle Entertainment, Racinos, The Strip, Tilman Fertitta, Wall Street | 1 Comment

Quote of the Day

“Bigger projects’ best hope for success depends on Vietnam’s government changing course, and that’s not a smart money bet.” — Forbes correspondent Muhammad Cohen on the difficulty of large-scale casino development in Vietnam.

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Trump (the casino) loses again; New look for Bluhm

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 trump-taj mahaEntertainment 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.

On another front, Continue reading

Posted in Architecture, Atlantic City, Carl Icahn, Cordish Co., Idaho, Maryland, Neil Bluhm, New York, Trump Entertainment Resorts, Unite-Here | Leave a comment

Vetting the candidates

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 Christie Guadagnotoward 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

Posted in Arkansas, Election, Florida, International, New York, Politics, Regulation, Tribal | Leave a comment