Judging by the looks of this going-out-of-business sale at SLS Las Vegas (and the exorcism of the Fred Segal name from the Web site), more rats are scurrying off Sam Nazarian‘s sinking ship. It makes me sorry my wife and I turned down a free-stay package this weekend (too busy): It may be our last chance to experience SLS before it’s gone.
If you suddenly find that you’re in a Free State casino and your gambling budget doesn’t go as far as it once did, you can thank the Maryland Lottery & Gaming Control Commission. It’s prepared to vote on a staff-recommended change that slot holds in the state be lowered from the 90%-95% range to 87%-95%. In a slight concession to players, holds are not being tightened to the 85% sought by casinos. Now I understand that casinos in Maryland are taxed to within an inch of their lives, but they’re big boys. They didn’t go into the state with their eyes shut. They knew the tax rate was (initially) 65% and they fought hard — and in the case of Penn National Gaming, dirty — to get a foothold just the same. They even got a tax break during the last election and they still want to sweat the percentages. It all adds up to a big “screw you” for the consumer.
Both the state and the industry are offering the rationalization that competition will Continue reading →
Second-quarter operating profits in Atlantic City were up everywhere except for — you guessed it — Trump Taj Mahal. The Taj swung from a $2 million profit in 2Q14 to a $900,000 loss, another testament to CEO Bob Griffin‘s inspiring leadership. Despite the drag exerted by the Taj, cash flow was up 28% in the market. The increased profitability is actually greater if defunct turkeys like Revel, the Atlantic Club, Trump Plaza and the martyred Showboat are added to the year/year splits. The Golden Nugget‘s ability to draw in refugee players from the closed casinos was reflected in a 902% increase (that’s not a typo) in profitability, nearly $8 million.
New Jersey‘s quest for sports betting came to a bitter, penultimate roadblock before the Third Circuit Court of Appeals, which deemed the Garden State’s repeal of its sports-betting ban to be a violation of the Professional and Amateur Sports Protection Act. The ruling was basically a rerun of prior Third Circuit edicts, with judges Maryanne Trump Barry and Marjorie Rendell frowning upon New Jersey’s law and Judge Julio Fuentesthe lone voice of sanity, saying Continue reading →
“Indian gaming, unfortunately, is the 800-pound gorilla in every room, in every discussion, on every Indian policy, including recognition. Mostly recognition.” — lobbyist Arlinda Locklear, on how tribal policymaking in Washington, D.C., is complicated by politicians and interest groups who have the heebie-jeebies about gambling.
My wife and I have just returned from four days’ vacation in Kanab, Utah. We spent our time there volunteering at Best Friends Animal Sanctuary, where we washed dishes, folded laundry, picked up poop, fed the inhabitants and socialized with Continue reading →
Banks and other lending institutions aren’t going to simply forebear while Caesars Entertainment ownership absconds with all the assets. No, they want equity if they’re going to forgive debt and drop lawsuits. And if those lawsuits drag the parent company into Chapter 11, so be it. Caesars’ attitude toward creditors has been at times disdainful, with advisor James E. Millstein telling a lawyer, “You’re deluding yourselves in thinking you’re getting that money anytime soon.” Millstein added that Caesars could lose whatever creditor support it has if litigation over potentially fraudulent asset transfers is permitted to go forward. (And, let’s face it, when Total Rewards is “sold” for $0.00, there’s something fishy happening.)
According to the Wall Street Journal, “a bondholder committee proposed a restructuring plan under which Continue reading →
Penn National Gaming is “making it rain” in Plainview, where it has spent $1.5 million with local vendors since opening. The workforce at Plainridge Park has gone from 100 to 533, with a $14 million payroll. And the state has already collected $10 million in taxes. This would seem like success beyond Deval Patrick‘s wildest dreams but now the dreaded Penn National Effect kicks in, management having engaged in its habitual exaggeration of projected revenue, forecast at $248 million but likelier to come in around $220 million. (See also Baltimore, Horseshoe.)
Area vendors have nothing but good things to say about Plainridge, while Continue reading →
When one reads that casino revenues were up in, say, Indiana, despite lower foot traffic, you’ve got to wonder how its done. Applied Analysis has the answer: Slot holds are at “all-time highs,” meaning that some of the economic recovery we’ve been seeing is artificially generated. The study was commissioned by the Association of Gaming Equipment Manufacturers, who are to be commended for essentially blowing the whistle on themselves. Except for Florida‘s drop from 9.5% to 6% hold, most states have seen 6% increases in hold since 2007, even as actual slot play fell by double-digit amounts.
Applied Analysis takes issue with Wall Street pundits on the subject of recent comebacks, saying, Continue reading →
MGM Resorts International sent CFO Dan D’Arrigo to meet with J.P. Morgan analysts, who found MGM execs in an upbeat mood. “We’d characterize the tone of the meetings as positive and investor interest as high,” wrote analyst Joseph Greff. That’s partly because MGM’s bread and butter, convention-goers, have been coming to Vegas in force and October is on course to set a record for group bookings on the Las Vegas Strip. As for other strategic positioning, management is still working its way through the pros and cons of converting to a REIT. As for ongoing asset sales, Crystals (above) is still the property being most aggressively shopped, although the $1 billion price tag may explain why MGM hasn’t found a buyer yet.
MGM taketh away, planning to eradicate any remaining 3:2 blackjack from its Strip casinos, as well as trying to “capture” more resort fees. Thanks, guys. Greff projected that the company’s forthcoming Macao casino would make a “reasonable” Continue reading →
Add Galaxy Entertainment to the companies taking on the chin in the Macao economy. The casino firm just posted a 46% drop in cash flow for 2Q15. Leading by example, Chairman Lui Che Wooannounced a freeze in executive salaries as the primary austerity measure. He also became the latest casino boss to say Macao has “almost hit bottom.” Hey, if enough CEOs keep saying it, somebody’s eventually bound to be right, no? Although China International Capital Corp. analyst Chris Kwai called Galaxy’s numbers “solid,” he’s not buying into the ‘build it and they will come scenario for 2016. “Individual new opening will not bring too much of an upside in the entire market,” he hedged. “But once it added up all the casinos next year, people will be more fond of going to Macao.”
Aside from the emaciated VIP play, Macao casino bosses also have to worry about a possible Continue reading →
That’s the stark implication of some remarks by owner Stockbridge Capital Partners about SLS Las Vegas, which continues to generate negative return on investment. Howard Stutztook a deep dive into the numbers and he must have required a bathysphere to find them. In 2Q15, SLS lost $49 million, for a grand total of $84 million year to date. Stockbridge made three cash infusions, for a total of $13 million, during the summer months, when one would expect SLS to be performing at its best.
Stockbridge said it would keep picking up the tab through Dec. 31, leaving the distinct impression that Continue reading →
“It is now safe to say the American casino industry has recovered, and the new normal is growth again.” — Fantini’s Gaming Report CEO Frank Fantini, on revenue upticks at Midwestern and tribal casinos.
First-month numbers are in for Plainridge Park and the racino run by Penn National Gaming took in an average of $467/slot/day (including a $6.15 million gross its first week). That’s an absolute blockbuster figure in an industry where $200/day is the desired average. So they’re metaphorically off and running at Plainridge. It has Massachusetts all to itself for as much as three years but already some doom-and-gloom remarks are being made. “What they need to do is build up some kind of loyalty to keep people coming back after MGM’s Springfield casino and Wynn Resorts’ $1.7 billion Everett casino open with all the bells and whistles,” said Boston College boffin Richard McGowan.
The countdown has begun toward a Wednesday closing of the Las Vegas Club. It’s surprising that it took five years for new co-owner Derek Stevens to persuade Tamares Group to part with the casino, considering how flummoxed Tamares was at what to do with it. “There will be some demolition and renovation,” Stevens says, “several months down the line.” Reopening the Club will be complicated by the fact that Stevens bought neither Continue reading →
“I joked with people a year ago no one wanted to be in regional gaming and everyone wanted to be in Macao. And a year later, it has really flipped.” — Penn National Gaming CEO Tim Wilmott, whose company’s stock price has risen 70% in the last year.
Score one against private poker games and score one for tribal casinos, which are now the only places in Wisconsin where one can legally play poker. As Poker News put it, ” the fact remains even playing poker for pennies against grandma constitutes a crime.” A crowdfunded lawsuit by poker players challenging state law met with a not-unsympathetic but ultimately negative verdict from Judge Richard G. Niess. Saying his “hands are tied” by a 1964 legal precedent, Niess ruled, “I’ve got to say that poker is such a rich topic on so many levels. It’s as much a part of the American fabric, I think, as Continue reading →
Good news for fans of the Las Vegas Club (and you know who you are): Its long Tamares Group nightmare will soon be over. Tamares has sold the Vegas Club to the D owner Derek Stevens and his brother for a undisclosed $40 million pricc. Details are thin on the ground, particularly as to Stevens’ intentions. However, given the vast improvements he wrought at the D and Golden Gate, optimism is warranted. In a cover-your-ass announcement, Tamares tried to paint its retreat from the increasingly threadbare Vegas Club as the kind of Continue reading →
Here’s a preview of the half-hour Kabuki spectacle Fight with a Carp, which will play five performances at Bellagio over the next three nights. A special, 165-square-foot stage has been erected in the Bellagio lagoon for the show, which is synopsized as “a handsome samurai … falls in love with a beautiful maiden … only to discover she is actually a giant carp’s spirit taking the form of a woman to seek revenge against humans for killing her carp lover.” In other words, just another day at the koi pond. MGM Resorts International is to be commended for this effort to spread the appreciation of Kabuki theatre.