Helped by better-than-expected performances at M Resort and Hollywood Casino at Charles Town Races, beating its own estimates, Penn National Gaming 
exceeded Wall Street’s consensus for 3Q14. Cannibalization of Charles Town has not been as great as was feared and mid-to-lower tier players ard showing up in greater numbers. Promotions have been “rational” save in Missouri, where Penn is locked in mortal combat with Pinnacle Entertainment‘s two Ameristar-branded casinos.
Deutsche Bank analyst Carlo Santarelli noted that “regional trends remain uninspiring” but, in light of that, Penn should be able to exceed its own projections for the fourth quarter. Another positive augury is polling in Massachusetts, which shows casino repeal failing by a 14-point margin. That is not only encouraging in the short term, it means Penn will have a significant new revenue contributor in mid-2015 when its Plainridge Park racino opens.
* Although Union Gaming analyst Robert Shore thinks sports betting in Atlantic City could be three or four times the $203 million wagered in Nevada last year, 
casinos continue to give it a wide berth. “I imagine any other casino operator would face the same issues and would not want to jeopardize [their license],” said Caesars Entertainment‘s Gary Thompson. “Let’s say the federal government comes in and indicts you or shuts you down, and then you have to explain to the Pennsylvania Gaming Board why you have a federal indictment,” asked Mitchell Etess, CEO of the Mohegan Tribal Gaming Authority, which manages Resorts Atlantic City. A similarly grim view is held by Golden Nugget owner Tilman Fertitta.
Borgata‘s Joe Lupo is more open to sports betting but still taking a wait-and-see attitude. “It won’t save a property, but it would make a substantial difference in making
properties healthier. When people come to wager on sports, it’s not just sports. They’re 
staying in the hotel. They’re eating,” he reasoned to the Wall Street Journal. Meanwhile, the State of New Jersey formally responded to a federal lawsuit filed by the major-league sports and NCAA, accusing them of using Uncle Sam to meddle in intrastate affairs. It also challenged their contention that they would suffer “irreparable harm” — a ludicrous contention when you consider that Nevada and Delaware already have sports betting.
Yesterday, the sports leagues escalated the war of words, calling New Jersey’s new law a violation of the state’s own constitution and “indefensible folly.” The quarrel hinges on a chink in a federal judge’s interpretation of the Professional & Amateur Sports Protection Act (PASPA). As New Jersey argues it, ” federal law prohibiting states from altering their state-law restrictions on sports wagering would ‘raise a series of constitutional problems,’ so it construed PASPA’s statutory language to avoid those problems.” However, the government has a 1.000 batting average when defending PASPA, so Monmouth Park is really sticking its neck out by planning on taking sports wagers this Sunday and investing in the infrastructure to do so.
