In a paradoxical development, Atlantic City casinos reported a 61% increase in profitability in Q315. That largesse came even as gross gaming revenues only rose 5%. Cost-containment is credited with being the source of the bounty. Caesars Interactive swung from a loss to a profit, while Resorts Digital did the reverse. In addition to climbing the ladder of Boardwalk casinos, Resorts Atlantic City grew profits by 80%. Weirdest of all, even as it fell into last place in revenue, Trump Taj Mahal reported a profit increase 182%, some of that clearly made by then-CEO Bob Griffin off the backs of his workforce, whom he has screwed over royally.
While the casino industry can bask in a moment of prosperity, there’s no such relief down at Continue reading
Posted in Atlantic City, Boyd Gaming, Carl Icahn, Dan Gilbert, Economy, Election, Glenn Straub, Harrah's, Indiana, International, Internet gambling, Massachusetts, MGM Mirage, Mohegan Sun, Ohio, Politics, Revel, Sheldon Adelson, Tilman Fertitta, Tropicana Entertainment, Trump Entertainment Resorts
A Florida attorney seems to have found the soft underbelly of the daily fantasy sports industry: its investors. Ervin Gonzales, representing two Sunshine State punters, has filed a class-action lawsuit that names among its defendants all the major sporting leagues, Jerry Jones, Robert Kraft, JP Morgan Bank, PayPal, Capitol One (“Who’s in your lineup?”) and so forth. All are accused of illegal gambling, and the plaintiffs allege that “DFS sites acted in a deceptive manner by luring average players into competition with industry employees who had access to insider information.” At the very least, this could make payment processors skittish about providing DFS-related services.
DraftKings has lawyered up in New York with some high-powered legal talent, namely Continue reading
“They may have to give up daily games and be limited to real athletic events that take place on at least two days. And they will certainly be required to be regulated. But there is too much money at stake to see daily fantasy sports disappear any time soon.” — gaming-law expert I. Nelson Rose on the future of DFS.
Daily fantasy sports backlash has claimed its first casualty. Relatively minor site TradeSports.com has gone out of business. “Recent negative events in the industry have already increased our costs of operating (and will most likely continue to do so); or perhaps even prevent operations all-together. Put simply: We aren’t making enough money,” TradeSports told the Wall Street Journal. This closure comes at a time when Georgia, Maryland, Rhode Island and Ohio are joining the pileup of states looking into the propriety of DFS. Even DraftKings is said to be lowering its profile, trying to cut back on its advertising: “We are always in dialogue with [our partner teams], including now.” I’d say especially now.
Better news for Boston-based DraftKings came in the form of Massachusetts Attorney General Maura Healey‘s proposed consumer protections for the industry. These ranged from limiting Continue reading
“The candidate does not appear to have any commitment to accuracy.” — University of California climate scientist Emmanuel Vincent, assessing the validity of Donald Trump‘s pronouncements on science in a blind study. Trump? Untethered to veracity? Perish the thought!
By the this point in time it’s pretty clear that Florida Gov. Rick Scott (R) has been negotiating in bad faith with the Seminole Tribe. He’s had five years to come up with a new compact regarding the tribe’s blackjack games — and failed miserably. Not even a Seminole offer to up revenue-sharing from $1 billion over five years to $3 billion over seven was good enough for Governor Rick. Even so, he’s trying to have the federal courts both dismiss a suit against him for bad-faith dickering and to enjoin the Seminoles from continuing to offer blackjack. Some gall.
The tribe wants to expand its casino arsenal to include craps and roulette, although if it can’t get an agreement on blackjack, what’s the hope of Continue reading
MGM Springfield is turning into the worst of both worlds. Not only has the ‘wow’ factor been subtracted (“really the least interesting part of our project,” one exec contended), with the result that the casino-hotel looks more like a bank than a resort, but it will now cost $950 million — a 19% budget increase. MGM Resorts International execs moved quickly to stanch the PR bleeding, with
President William Hornbuckle admitting, “No, we’re not changing this into a mall. No, we’re not upping and running … I wish it didn’t cost that amount. I wish we could do it for less. But we will honor our commitments.” Project prexy Michael Mathis added, “We are committed to this city. In fact, we are now $150 million more committed.” Or $150 million deeper into the swamp. MGM has severely downsized the project yet the cost continues Continue reading
Posted in Architecture, California, Culinary Union, Downtown, Entertainment, Lucky Dragon, Massachusetts, MGM Mirage, Regulation, Taxes, Transportation
In a big setback for Big Labor, the House of Representatives voted to exempt tribal casinos from National Labor Relations Board oversight. This turns back 11 years of precedent, stemming from a 2004 NLRB ruling that San Manuel Indian Bingo & Casino fell under federal jurisdiction. The NLRB asserted, according to Reuters, “it can intervene in a tribe’s labor practices when the tribal business is commercial rather than governmental and both employs and caters to non-Native Americans.” The agency has employed this rationale sparingly — only four times in 11 years.
However, “Tribal leaders have repeatedly spoken out against this overreach, and Congress has listened,” said Continue reading
“It’s the ultimate nuclear option to try to go after debtors’ counsel.” That’s what Seton Hall University boffin Stephen Lubben says of junior bondholders’ latest ploy in their knock-down, drag-out fight with Caesars Entertainment. They’re accusing law firm Kirkland & Ellis — which has already racked up $35 million worth of billable hours on the case (one Kirkland lawyer is making $1,335 an hour) — of a conflict of interest. “I would suspect that [law firm] Jones Day wouldn’t go down this road lightly,” added Lubben.
The road in dispute is whether Kirkland & Ellis was in fact acting objectively when it communicated with Caesars’ board — including Apollo Management and Texas Pacific Group — about Continue reading
“We won’t make money at the expense of our employees.” — Sparks Nugget CEO Carlton Geer on the pay raises he instituted as part of a rejuvenation of the faded Reno-Sparks casino.
Although he’s been dissed by New Jersey Gov. Chris Christie (R) and the NCAA (because his bill would allow daily fantasy sports to include college athletes), state Sen. James Whelan (D, right) presses on in his attempt to regulate DFS as a game of skill in the Garden State. His bill would differentiate the pastime from sports betting by forbidding wagering to be predicated on the performance of single athlete, team or parlay of teams, on point spreads or the final score. Assembly Tourism, Gaming & Arts Committee Chairman Ralph Caputo (D) backs Whelan and warned DFS providers, “It’s going to be regulated, one way or the other, and it might not be the way you want.” Caputo, however, wants to wait for New Jersey’s federal appeal of its sports-betting law before taking on DFS.
Right next door, state Rep. Felix Ortiz (D) is pushing a bill that would define DFS as a game of chance. His proposal would amend New York law to define those gambling activities that are Continue reading
Posted in Atlantic City, Geoff Freeman, Harry Reid, Internet gambling, Marketing, Massachusetts, New York, Pennsylvania, Politics, Regulation, Sports
Boyd Gaming CEO Keith Smith and CFO Josh Hirsberg lunched with Deutsche Bank‘s Carlo Santarelli, who found their mood bright and shiny. “Management remains confident that if current [Las Vegas] locals and regional gaming revenue trends hold firm, it can continue to improve margins,” Santarelli wrote. He also found that management wasn’t standing pat on acquisitions, the question mainly being of finding one that justifies the leverage involved. Also, a REIT conversion is still under discussion but with no urgency attached.
Management admitted that Vegas locals business was 50% off of its all-time peak (and it does remain volatile), moving Santarelli to observe that this was “the most detached” aspect of Boyd’s larger growth story. He kept his price target at $24/share (Boyd currently trades at $20.40. At least Santarelli kept a more open mind than most of Wall Street, which usually greets Boyd with a shrug.
* Given that Studio City Macau opened and didn’t budge the Macao market one bit, Santarelli is right to say “Why not” when Wynn Resorts announced that it was pushing Wynn Palace back to June 2016, off Steve Wynn‘s oft-iterated March 25, 2016, opening date. “Our conversation with management gives us some comfort that there is not much more behind the release than what is stated,” wrote Santarelli who added that there were no governmental or labor issues behind the delay, nor was there any change in the budget.
“Broadly, while we are surprised by the announcement, given our negative view of the impacts of new supply into the current market climate, we don’t think the 3 month delay is entirely meaningful from a fundamental perspective,” he added. “We continue to believe Wynn Palace will be the next property to open in the market.”
Instead of hassling Stockton University over ownership of the Showboat (and losing), perhaps Glenn Straub should have been developing a long-range plan for heating Revel through the winter, so that the pipes don’t freeze and burst. His solution? Bring in boilers as a temporary solution. The problem? The hot water from the boilers would have to be run through equipment that ACR Energy Partners says it owns. Many’s the time we’ve heard that an end to Straub’s troubles with ACR was just around the corner, yet here we are again. Meanwhile, Straub’s plans for Revel continue to pinball between “a sprawling subterranean horse-stable, a Syrian refugee camp, a cancer-research center, ziplines, a university, a water park and a casino-hotel.” In addition to the indoor water park, Revel will sprout a Continue reading
Posted in Atlantic City, Entertainment, Glenn Straub, Internet gambling, New York, Ohio, Pennsylvania, Politics, Regulation, Revel, Transportation, Wall Street
SLS Las Vegas is finally doing better, if by “doing better” you mean losing only $39 million in a full 3Q15 as opposed to the $46 million lost in the truncated (five-week) 3Q14. Stockbridge Capital Partners continues to have to prop up Sam Nazarian‘s pipe dream, paying another $31 million subsidy to the casino. This brings Stockbridge’s underwriting to $59 million for the year. SLS President Scott Kreeger told Howard Stutz that Stockbridge is “committed to the make the property better,” a commitment that comes with a hefty price attached. Nor is Stockbridge demonstrating great business savvy: Why pay to keep the meaningless, equity-less SLS moniker? At least the W rebranding of the Lux Tower is a big, belated step in the right direction.
One private-equity firm that’s actually flourishing on the Strip is Continue reading
Posted in Architecture, Cosmopolitan, Derek Stevens, Downtown, Economy, Fontainebleau, Genting, Harrah's, James Packer, Lucky Dragon, LVCVA, Marketing, MGM Mirage, Riviera, Sam Nazarian, Sheldon Adelson, SLS Las Vegas, Tamares Group, Taxes, The Strip, Wall Street
Another day, another crisis for daily fantasy sports. This week, banks will be soul-searching, grappling with the question of whether to process DFS transactions or not. Market Watch polled some of the major financial institutions and found them taking a wait-and-see attitude, and putting the onus for compliance on DFS sites. A Citigroup spokesman pointedly reminded Market Watch that it doesn’t process anything that’s coded as Internet gambling. Former federal prosecutor Michael Zeldin, now in private practice, urged caution upon theoretical banking clients: “Why would you choose to get in the middle of this legal battle,” he asked. “Generally speaking, the fines these days will outstrip any benefits of staying on board.”
Raging against the perceived hypocrisy of New York State running a lottery that pays only Continue reading
Minimum wages are a contentious issue on the campaign trail but a settled one at $450 million Stadium Casino. The in-progress Philadelphia gambling hall has committed to a $12/hour minimum wage for its construction and permanent personnel alike. That’s one of a number of metrics that the Cordish Gaming/Greenwood Gaming & Entertainment project has set for itself. Another is to hire a permanent workforce that’s 40% female and 50% minority. No more than 15% of workers can be insourced from beyond Pennsylvania borders. Once tips are factored in, dealers are expected to make $70,000 annually.
“The agreements set a new standard for development in Philadelphia in areas of economic opportunity and inclusivity for Continue reading
Posted in Atlantic City, Charity, Cordish Co., Economy, Greenwood Racing, Internet gambling, Pennsylvania, Rhode Island, Taxes, Technology, Trump Entertainment Resorts
For the first time in over a year, there are no casino closings to be factored into Atlantic City‘s gaming revenue, no more same-store comparisons. So how did the Boardwalk fare? Even with an extra weekend day, revenue dipped 3%. Slot coin-in and winnings (or “losses” if you’re a player) were both down a percentage point. Although table-game wagering was flat with last year, casino winnings fell 9%.
Lady Luck smiled on Borgata ($58 million), however, where revenues were up 11%. Coin-in rose 12% and winnings 11%. Table play was up very modestly (1%) but the house played lucky, Continue reading
Posted in Alabama, Atlantic City, Boyd Gaming, Harrah's, MGM Mirage, Mohegan Sun, Regulation, Technology, Tilman Fertitta, Tropicana Entertainment, Trump Entertainment Resorts
Home team DraftKings (headquartered in Boston) got a vote of confidence from Massachusetts Gov. Charlie Baker (R), who opined that daily fantasy sports is a game of skill, not of chance. Last weekend, Baker tried a little DraftKings wagering himself and concluded, “I’m convinced it’s legal in Massachusetts, I don’t have a problem with that … It’s a new enterprise, it’s a new business, it’s a new way of engaging people in these games of skill.” Disparaging his own skill at picking winning players, Baker said, “I was so intimidated by it that I don’t think we’ll ever have to worry about me spending a lot of time on it.”
He’s the second high-profile Bay State ally in DraftKings’ corner, state Attorney General Maura Healey being mainly concerned with consumer protections rather than Continue reading
All of sudden this week, Genting Group feels compelled to explain itself and declare that, yes, there really has been $50 million worth of construction activity at Resorts World Las Vegas, starting with the parking garage. (Perhaps the visible site preparation at Alon spurred Genting to address the media.) Seems the Genting has been at it inconspicuously for months, favoring the late-night and early morning hours when Las Vegas is at its coolest. Genting told the Las Vegas Sun that it’s “continuing with site prep work and perfecting design and integration while waiting for some permits to be issued.”
“A $4 billion project will not be built overnight,” Genting spokesman Michael Levoff said, a tad defensively (and with an unplanned degree Continue reading