Buried deep in Caesars Entertainments ‘s 1Q14 earnings call was this bombshell from CEO Gary Loveman: “We are looking at all of our options to reduce the cost of doing business here. All the businesses in [Atlantic City] are under tremendous pressure.” That’s not exactly a death sentence for the Showboat but it got people to sit up and take notice. (Why then has Caesars been playing footsie with Revel?) S&G has to give Loveman props for the bravery it took to say that “markets can reach points when no new supply is indeed the right answer. In some cases reducing supply is the right answer. That’s the normal, self-correcting healing that you’d like to see in a market like this,” In the casino industry that’s heresy. To hear most execs — and many Wall Street analysts — tell it, new supply is always the right answer.
Loveman also announced that guarantees were being taken off much of its debt. That’s a move that must have bondholders’ innards in a twist, as the company continues to struggle.
Sheldon Adelson added another big-name minion to his campaign against Internet gambling last month when Florida Gov. Rick Scott (R) took time out from negotiating to potentially expand gambling in his state to write Congress that Internet play would “invade the homes of every American family, and be piped in to our dens, living rooms, workplaces and even our kids bedrooms and dorm rooms.” (No, not dorm rooms, those temples of purity!) Scott’s statement — probably drafted somewhere deep within Las Vegas Sands — was followed by absolutely identical missives from Texas Gov. Rick Perry (R) and South Carolina Gov. Nikki Haley (R). That’s an impressive feat of sock puppetry.
Adelson’s stooges also include Louisiana Gov. Bobby Jindal (R, left), who at least had the enterprise to write his own op-ed, and Indiana Gov. Mike Pence (R). The latter’s argument was that Indiana couldn’t regulate intrastate activity, making federal intervention imperative. Adelson’s #1 water boy on Capitol Hill, Sen. Lindsey Graham (R-S.C.) couldn’t even be bothered to draft his own bill but introduced one penned by a Sands employee. Adelson’s even bedded down with Jack Abramoff crony Ralph Reed, whose not been averse to taking gambling money in the past, even when nominally opposed to casinos.
Adelson got his hands on somewhat more impressive ammo with the release of a Fairleigh Dickinson University PublicMind poll. It found only 27% support for legalized Internet play, compared to 50% who favored marijuana legalization (another subject that sends Adelson into old-coot outrage). The poll found only 35% awareness of the issue, which legal pot is pretty high on the public’s radar screen, with 86% following it in the news. The poll had a large sample (1,151 souls) and a 3% margin of error, so I think we can take its findings as reliable.
New Hampshire casinos aren’t dead, merely comatose. Even though the House of Representatives voted not to reconsider reconsidering its negative verdict on the issue (which lost by one vote), there’s still hope, amazingly: Some form of gambling bill could be revived from life support before the June 5 adjournment, possibly as a Christmas tree of unrelated amendments. Also, the state’s credit rating is on watch, meaning that solons may still have to find new revenue somewhere, no matter how much it galls some of them to support a casino or two.