Quote of the Day

“It’s no secret that for a long time the rumor was we were going to Lawrence_Ho_Melcoget [only] 150 tables. Were we flipping out? Of course we were flipping out. But we never went out publicly. There’s no arguing with City Hall. There’s no arguing with the government. There’s only begging and lobbying and more begging.” — Lawrence Ho, one of an increasingly antsy group of casino owners in Macao. In the end, he got 250 tables.

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No Great Pumpkin for Las Vegas; Further woe for Macao

It was Las Vegas Strip casinos’ bad luck to have Oct. 31 fall on a Saturday, meaning that revenues (particularly from slots) from that weekend won’t be reported until the end of November. Consequently, Strip Miragerevenues fell 5% in October, grossing $494 million. Still, “volume trends were largely in line with our estimates,” wrote Deutsche Bank analyst Carlo Santarelli, including a 9% drop in the volume of baccarat play (compounded by a 19.5% decrease in winnings) and a 3% increase in all other table game play, which failed to stave off a 10.5% drop in winnings. (Interestingly, “card games” — i.e., poker — are now being folded into table game results.) JP Morgan analyst Joseph Greff added that “we expect the market to Continue reading

Posted in Boulder Strip, Dan Gilbert, Detroit, Dining, Downtown, Economy, Galaxy Entertainment, Lake Tahoe, Laughlin, Law enforcement, Macau, Maryland, Melco Crown Entertainment, MGM Mirage, North Las Vegas, Reno, Sheldon Adelson, Stanley Ho, Steve Wynn, Wall Street | Leave a comment

Resolution at Revel; MGM turns up the heat on Connecticut

Our long Revel nightmare is at least partially over, now that Glenn Straub has a deal in place to buy the disputed ACR Energy Revel_lobbypatio_PANOPartners power plant. While ACR pays $15 million to placate bondholders, Straub gets the plant for $30 million, theoretically putting to an end a number of pressing issues of how he was going to keep Revel heated and alight through the winter. It also ends worries that Bank of New York Mellon was going to foreclose on the plant … although there always seems to be another shoe about to drop where Revel is concerned. Let’s see if Straub can now move on to honing a new vision for the property without any additional footwear hitting the floor.

* Here’s a bad idea that didn’t make it through the Nevada Lege in 2015 but just give it a couple of years: “The Brownstein Hyatt Farber Schreck law firm has proposed a new regulation that would Continue reading

Posted in Atlantic City, Eldorado Resorts, Foxwoods, Glenn Straub, Massachusetts, MGM Mirage, Mohegan Sun, Ohio, Politics, Racinos, Regulation, Reno, Revel, Wall Street | 1 Comment

Quote of the Day

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Atlantic City casinos make less, profit more

In a paradoxical development, Atlantic City casinos reported a 61% increase in profitability in Q315. That largesse came even as gross trump-taj mahagaming 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 | Leave a comment

DFS sued again; Penn disappoints, MGM excels

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

Posted in Florida, Internet gambling, Law enforcement, Massachusetts, MGM Mirage, Penn National, Regulation, Sports | Leave a comment

Quote of the Day

“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.

Posted in Internet gambling, Law enforcement, Regulation | Leave a comment

The dark side of DFS; Wynn delay provokes caution

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 Draft Kingsoperating (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

Posted in Economy, Internet gambling, Macau, Massachusetts, Problem gambling, Regulation, Steve Wynn, Wall Street | Leave a comment

Quote of the Day

Trump“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!

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Rick Scott screws the Seminoles; Internet gaming advances in Pennsylvania

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 Rick_Scott1the 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

Posted in Florida, Internet gambling, Macau, Pennsylvania, Regulation, Seminole Tribe, Steve Wynn | Leave a comment

Runaway costs in Springfield; Lucky Dragon not so lucky

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

mgmPresident 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 | Leave a comment

Tribes 1, NLRB 0; DFS on the rampage

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 Capitol-Hillfrom 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

Posted in California, International, Internet gambling, New York, Regulation | Leave a comment

Caesars gets nuked; Jerry Brown gets spanked

“It’s the ultimate nuclear option to try to go after debtors’ counsel.” That’s what Seton Hall University boffin Stephen Lubben says Caesars Palace fireworksof 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

Posted in California, Harrah's, International, Taxes, Tribal, Wall Street | Leave a comment

Quote of the Day

“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.

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DFS: A patchwork of approaches

Although he’s been dissed by New Jersey Gov. Chris Christie (R) and the NCAA (because his bill would allow daily fantasy sports to Whelaninclude 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 | Leave a comment

Boyd ‘upbeat’ on Wall Street; Wynn Palace on hold

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 Californiacurrent [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 wynn-palace-macau-image_largeto 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.”

Posted in Boyd Gaming, Economy, Macau, Melco Crown Entertainment, Steve Wynn, Uncategorized, Wall Street | Leave a comment

The wacky world of Glenn Straub; New York rescuer for DFS

Instead of hassling Stockton University over ownership of the Showboat (and losing), perhaps Glenn Straub should have been revel_0601developing 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 | 1 Comment

Up and down the Strip

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 SLS Las Vegas Exteriordream, 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 | 2 Comments

Banks gun-shy on DFS; Aquinnah tribe suffers major defeat

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

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The benefits of casino gambling make themselves felt

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 Cordish Philadelphiaof 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 | Leave a comment