We haven’t been able to confirm for certain whether or not James Packer‘s latest attempt to conquer Las Vegas, the casino-resort Alon, is definitely kaput. It definitely hasn’t evolved beyond some exquisitely vague, bare-bones documents filed with Clark County. However, we know that the casino owner and heir to Kerry Packer‘s media fortune needs to scare up some cash, quick. Packer’s selling down his Crown Resorts stake from 53% to 48%, netting $340 million in the transaction. Crown had already reduced a 34% ownership of Melco Crown Entertainment to 27%. Packer’s stated focus is on developing his new Sydney casino and an IT startup in Israel. No mention has been made of Alon. However, Reuters concluded its dispatch about the Packer stock sale with the report, “Crown has said it plans to spin off its international business and pay out 100 percent of its profit in dividends.” Spin off overseas businesses, you say? Hmmmm …
* In a rare industry display of corporate independence, Las Vegas Sands‘ board of directors drop-kicked the idea of Continue reading →
“Everything I built — the Golden Nugget, Mirage, Treasure Island, Wynn-Encore, were because of him. You name the buildings, including UNLV, and Parry Thomas’ fingerprints are everywhere in this valley.” — Steve Wynn, eulogizing banker and power-broker Thomas, who revolutionized the Nevada casino industry several times over, most importantly by persuading the state to permit publicly held corporations to own casinos. Thomas, who persuaded Wynn to buy the Golden Nugget, died Friday at age 95.
As cheap as it’s been lately, we hope you haven’t bought any Caesars Entertainment stock. Shares dropped 12% and kept falling right after Judge Benjamin Goldgardeclined to extend protection of Caesars from creditor litigation any longer, which means that lawsuits seeking up to $11 billion in compensation can proceed — potentially tipping the whole Caesars kit ‘n kaboodle into bankruptcy. Caesars has no one to blame but Chairman of the Board Gary Loveman, who was not only the moving force behind the ludicrous LBO that started the trouble but also presided over all the jiggery-pokery of moving around Caesars’ assets that inspired comparisons to Enron and provoked creditors’ wrath.
Caesars maintains that ongoing talks with creditors would be imperiled if litigation was taken off “hold.” Judge Goldgar wasn’t buying it, perhaps exasperated by Continue reading →
In the latest twist of the Project First Light saga, the Justice Department has interceded on behalf of the Mashpee Wampanoag. It has asked a federal judge to revisit his ruling that the Mashpee lacked standing and that the Interior Department erred by taking the Taunton land into trust. Justice’s intervention hinges upon the distinction between “federal jurisdiction” and “federal jurisdiction.” At the time of 1934’s Indian Recognition Act, a Godzilla-sized stumbling block, the Mashpee were unrecognized but nevertheless under federal jurisdiction. Judge William G. Young‘s ruling has put an enormous crimp in the tribe’s plan to open First Light by next summer: construction is at a halt.
It’s been a long time since the Nevada Gaming Commission even suspended a license. (I believe it was dive bar Snick’s Place, back in 2009, but I could be wrong.) However, the NGC has taken back the license of Scoundrel’s Pub. When asked, Nevada Gaming Control Board Chairman A.G. Burnett admitted he couldn’t even remember the last time the NGCB had yanked a license. OK, aptly named Scoundrel’s is a restricted licensee — a slot route, in other words. But it must have done something really bad, right? Right. Between 2009 and 2015, Scoundrel’s averaged one gang-related shooting per year. Not the place where you want to repair for a few quiet hands of video poker, in other words. Las Vegas Metro also responded to 144 calls — the vast majority involving violent incidents — at Scoundrel’s during the same time frame, the kind of notoriety that recalls Continue reading →
Lucky Dragon Casino is speeding to completion while Resorts Las Vegas and Alon can’t get out of the starting blocks. (Resorts World did Tweet that it had finished paving its parking garage, making it Las Vegas‘ most high-budgeted place to put your car.) Today, Lucky Dragon announced its restaurant repertory, developed with the assistance of chef Willy Ng, of Koi Palace (scroll down) in San Francisco. Street-food emporium Dragon’s Alley will feature a show kitchen that extends into the casino floor. Pearl Ocean offers a dim sum menu highlighted by live seafood. Phoenix is an eclectic mixture of Chinese-food trends: “Kurobuta pork, deer tendon, abalone and countless other rare and expertly prepared delicacies will punctuate the culinary adventure,” reads the announcement. Cha Garden is a ’round-the-clock tea room featuring a waterfall and “shoreline swimming pond.” Finally, Bao Now is a fast-food outlet adjacent to the casino floor. If Resorts World is planning to cater to the Chinese player, it may find that Lucky Dragon has co-opted him.
Except for the aerial gondola ride, the dancing-fountains show at Wynn Palace, in Macao, doesn’t have a thing on its progenitor at Bellagio. Well, nothing except a really bad, Broadway-style show tune (“We’ve got elegance”) that appears to have commissioned for the occasion. Once you hear it, you’ll be scarred for life.
Despite having an extra weekend day, Louisiana casinos saw revenue fall 7% in July. (JP Morgan analyst Joseph Greff blames flooding for the waterlogged numbers.) Pinnacle Entertainment did the best among major operators, up 4%, while Caesars Entertainment went into the toilet, down 29%, led by a catastrophic 38% plunge at Harrah’s New Orleans ($22.5 million). I don’t think we can blame the smoking ban, a smoke-free Fair Grounds racino was only 4% off its feed ($3 million). Across the river, where you smoke, Boyd Gaming‘s Treasure Chest was up 3% ($9 million) but Pinnacle’s Boomtown New Orleans dipped 5%, still good enough for a $10 million gross. Outlying Boyd properties suffered, with Amelia Belle down 8% ($4 million) and Evangeline Downs slipping 6.5%, to $7 million.
Lake Charles revenues — $85.5 million — almost doubled those in New Orleans. No surprise, L’Auberge du Lac was out front with $34 million and a 7% increase, followed by Continue reading →
This story pretty much writes itself. While MGM Resorts International cowboys up and makes it clear who’s sponsoring the ad — not hiding behind some phony-baloney PAC name like “Citizens for a Stronger Connecticut” — but the commercial is a rehash of tiresomely familiar political tropes: ominous music, insinuating voice-overs and cherry-picked quotes. While the MGM ad leads one to believe the Bradley International Airport casino is a done deal, lawmakers say ‘Not so fast!’ Besides, who wants to go to an airport — of all places — to gamble? Nobody thinks of airports and “fun” in the same breath anymore.
* Given all the anticipation, the actual opening of Wynn Palace was almost anticlimactic. Few casino projects have been so heavily debated as this one, and Continue reading →
Sands Bethlehem could soon pocket another $10 million a year but it’s letting Mount Airy Casino do the heavy lifting. The latter is arguing to the Pennsylvania Supreme Court that the flat, yearly fee falls disproportionately on small casinos, not the big boys like Sands, or as the state constitution puts it, “all taxes shall be uniform, upon the same class of subjects.” On the other side of the issue are elected officials like Bethlehem Mayor Robert Donchez, who says $10 million a year translates into 100 police officers and the “host fee is significantly important to our budget.” Added state Sen. Pat Browne, anticipating a court defeat, “I don’t know exactly how we’d go about it, but given that this fee has been established for a decade, we’re not just going to let this money be stripped from municipalities that rely on it.” However, given the Legislature’s hopeless performance on gaming-related issues last session, is it going to be able to get its act together and find a way to prop up civic budgets?
Mount Airy has a case: SugarHouse in Philadelphia is exempted from the levy (it pays a simple 4% of gross receipts), as are the state’s two resort casinos. Also, as a Continue reading →
“Drop out and tell America this entire candidacy was a stunt. You would not be a loser, you would be a legend.” — Last Week Tonight host John Oliver, making an appeal to Donald Trump, arguing that if Trump won the presidency, it would reduce his standard of living, condemning him to “living in government housing, conversing with fully clothed women and traveling in a plane that doesn’t even have his name on it.”
In a surrealistic turn of events, Caesars Entertainment Operating Co. has filed suit against parentCaesars Entertainment, and against majority owners Apollo Management and Texas Pacific Group. This bit of shadow puppetry is apparently intended to get at the goodies before junior bondholders can sue for relief (which they are enjoined from doing before the end of the month). In the meantime, Caesars has a new offer on the table, contingent upon converting CEOC into a REIT. Reports Global Gaming Business, “senior bondholders, who are owed about $6.35 billion, would get all the stock in the property company, $2 billion in cash, almost $1.9 billion in new debt and nearly 16 percent of the equity of the parent company. Creditors who hold $5.35 billion in bank loans would get $3.2 billion in cash, $2.2 billion in new debt and 5 percent of the parent.” So even if Caesars is prevalent in negotiations, it’s going to have to live with Continue reading →
Account holders and investors in Dore Entertainmentare evidently out of patience waiting to be reimbursed for the reported theft of $43 million from the VIP room operator. Instead, they’re suing Wynn Macau, saying “as a gaming concessionaire, [it] should be held responsible for Dore’s conduct on the basis that Wynn Resorts Macau is responsible for the supervision of Dore’s activities at Wynn Macau that resulted in the purported losses,” according to the company itself. It added that “the plaintiffs of the lawsuits allege that Dore failed to honour withdrawal of funds requests that allegedly has resulted in certain losses for these individuals.” Wynn holds that the lawsuit is without merit. (Big surprise, no?)
But Steve Wynn got some good news in the form of an investor note from Telsey Advisory Group. “We believe the opening should be a positive event for the company and its targets are achievable,” wrote analysts David Katz and Brian Davis, swimming against the tide of bankers’ sentiment. Calling Wynn Macau shares undervalued, Continue reading →
Evidently industry leaders are coming to terms with the fact that the go-go days when Macao was a $45 billion/year casino market are over. Steve Wynn told The Associated Press that “What took place here in previous years was an anomaly. he amount of revenue, the rate of growth was unprecedented and historic and in many cases not just extraordinary but outrageous.” Careful, Steve, you’re starting to sound like a member of the Chinese government. Calling current market conditions “wonderful” — Macao’s current $29 billion/year output is anything but shabby, after all — Wynn described the present casino business as “representing more normal patterns of human behavior, and that applies as well financially.” I’m not quite sure I believe Wynn when he says he’s too busy to keep tabs on policy in Beijing: “The policies of the central government are only tangentially important to us because we’re in the middle of delivering a service. In the long run, the economy of China is going to affect all my customers and their ability to recreate [sic], but on a day-to-day basis it’s not part of our script, it’s far away from us compared with the demands of the moment.” Even if he’s sweating out such niceties as Continue reading →
“The other candidate seems determined to needlessly antagonize our allies and trading partners by pledging to tear up NAFTA and other hard-won trade agreements. One candidate works to create stability and certainty, qualities the market loves and rewards. The other operates erratically and unpredictably, qualities the market abhors and punishes.” — MGM Resorts International CEO Jim Murren, endorsing Hillary Clintonas we predicted, his first-ever presidential benediction. Murren said his decision was predicated on “the personal experience of being with her in a room, working on issues in real time. Each time I have met with her to discuss complicated matters such as trade and energy policy, I have been incredibly impressed by her knowledge, command of the facts and solution-oriented approach.”
Daiwa Securities Group put “sell” ratings on Wynn Macau Ltd. and Sands China, arguing that projections that the Wynn Palace and Parisian megaresorts would reverse declines in Macao gambling “remain overly optimistic.” Analysts Adrian Chan and Jamie Soo wrote that the market was being overly roseate regarding “the ability of new properties to grow the overall market; the ability of the operators to capture a disproportionate share of the market from their new openings; and the operators collective ability to defend their market share when competitors open new properties.” They were particularly skeptical of Wynn Palace, writing, “there is no conclusive evidence over Wynn Macau’s 10-year track record in Macau that shows the success of its properties in taking market share or driving incremental demand … Indeed, Wynn [Resorts] has been steadily losing market share since Wynn Macau opened in 2006. At its peak, Wynn Macau accounted for more than 17 percent of Macau’s total [gross gaming revenue]. Today it accounts for around 10 percent, or around half of the figure eight years ago.” (Steve Wynn has declined to predict what the megaresort’s break-even point or return on investment will be.) “That Wynn is able to shift 250 tables to Cotai is really telling in terms of how much demand has slackened over the past couple years,” added Union Gaming Group analyst Grant Govertsen. He thinks Wynn Palace can limp along with an emaciated table-game repertory for a year or two but that, starting in 2018, prospects get fairly dicey.
He also opines that the government will, in effect, rub Steve Wynn’s nose in it for calling its table game policy “the single most counter-intuitive and irrational decision that was ever made” by Continue reading →
New York State gaming forces are taking a more-than-disinterested view of the upcoming referendum on Atlantic City‘s monopoly on casino gambling in New Jersey. For instance, Genting Group, owner of Resorts World New York, is opposing the measure behind stalking horse PAC Trenton’s Bad Bet. More openly, the New York Hotel & Motel Trades Council has declared its opposition and Empire State racino operator Jeff Gural is strongly in favor — especially considering that his Meadowlands Racetrack would be a heavy favorite to land a northern New Jersey casino. The ballot question is fading down the stretch, showing a surprising loss of support. A Fairleigh Dickinson University PublicMind survey found 56% of voters against it and only 37% in favor.
“They don’t seem to be sold on the idea of saving the gaming industry in the state by Continue reading →
MGM Resorts International and Pansy Ho are performing a fancy juggling act with MGM stock. The former is going to buy an additional 188 million shares in MGM China, increasing its hold on the property to 56%. In return, Ms. Ho will buy 4 million MGM shares from the late Kirk Kekorian‘s Trancinda Corp., giving her an almost 5% stake in MGM. Deutsche Bank analyst Carlo Santarelli spoke for many when he wrote, “we expect investors to be a bit confused by the rationale for this transaction. The transaction, while positive for MGM China … is a bit perplexing from MGM’s perspective. In our view, MGM Resorts is inexpensive and MGM China is trading at top of the range multiples, on our forecasts, with meaningful ambiguity in future results given the wave of new supply in a questionable top line recovery environment. While MGM Resorts benefits from Ms. Ho lightening the Tracinda overhang, it does so just modestly. Lastly, in a period in which we view domestic gaming fundamentals favorably, MGM is using its equity to Continue reading →
For those of us who couldn’t be there, this was the scene as the remaining vestiges of the Riviera swooned gracefully into a pile of debris. You can see spectators scurrying to evade the dust cloud, as it threatens to engulf Circus Circus. The Las Vegas Convention & Visitors Authority‘s efforts to keep the event on the lowdown were clearly for naught. Here’s the unexpurgated, narrated version of the twilight of the Old Vegas gods: