Penn National Gaming has been talking up its growth strategy to Wall Street and the Tropicana Las Vegas is central to the plan. At present, the Tropicana is pulling in just $40 million a year in casino 
revenues, less than Penn makes at its Bangor casino (in a less competitive market, one should note). Penn plans to increase cash flow first by eliminating redundancies, so if you work in the legal, accounting or compliance departments, you’d better start looking for a new job. Penn’s goal is an 11% return on investment, which J.P. Morgan analyst Joseph Greff calls “conservative.” The 9.5X cash flow purchase price might seem steep … until you consider where the Trop sits. At over $10 million in acre, the deal also signals a significant upturn in the value of Strip real estate.
Although Penn execs describe the Trop’s room product as “in very good shape,” they haven’t ruled out a third tower — although Greff doesn’t think this will happen unless the property hits or exceeds that 11% ROI target.
In other realms, Plainridge Park‘s business was characterized as “better than previously expected,” which is saying a lot — as is a projection of a 33% ROI. Penn is also being a severe lender to Jamul Indian Village, near San Diego, where it’s building a Hollywood-flagged casino. It’s charging the tribe 11% interest on the $360 million facility. Penn’s seven-year deal with the tribe gives it a management fee “equal to 1.5% of net revenue and 30% of property level pre-tax earnings.” Sweet. Since this will be the closest tribal casino to San Diego, Penn’s prospects to make a big score look very good indeed.
* Steve Wynn hasn’t been able to turn so much as one shovelful of dirt on his Everett resort project and now Massachusetts Attorney 
General Maura Healey has thrown another obstacle in his path. She wants a Wynn Resorts-commissioned traffic study to receive further scrutiny from the Massachusetts Department of Transportation before environmental permits are issued. Healey thinks that a traffic-impact study commissioned and conducted by Wynn may be less than impartial.
At issue is Sullivan Square, which the Boston Globe describes as ” a long-overmatched crossroads of several major roadways in the shadow of a hulking, elevated section of Interstate 93, from which still more 
traffic pours into the oft-congested square.” That’s what you’re going to have to navigate to get to Wynn’s casino. Healey calls Wynn’s study insufficient and wants the company to pay for an independent assessment. A casino opponent, Healey is taking a hard line here but, fortunately for Wynn, her opinion is not binding. Transportation Secretary Stephanie Pollack has the final say in this matter. Healey’s stance does, however, endear her to Boston Mayor Martin “McCheese” Walsh, who was quick to issue a supportive statement.
As for Steve Wynn, he must have steam coming out of his ears by this 
point. “For 19 months we have diligently followed the detailed and robust [procedure]. After extensive studies and analysis reviewed by numerous state agencies — as well as draft, final, supplementary and secondary supplementary reports — we believe we are prepared to move forward,” he fumed via a prepared statement.
* Wynn, however, must be grateful for anything that changes the subject from whether he knowingly paid mobbed-up Charles Lightbody a premium for the land on which Wynn Resorts intends to build. Wynn’s political consultant Stephen Tocco says that Everett 
Mayor Carlo DeMaria (right), when told that Wynn wouldn’t deal with anybody with criminal ties, asked if the subject of the conversation was Lightbody. The crux of the issue is whether Tocco kept this exchange to himself, as he says, or whether he clued Wynn in on it. “I never heard of Lightbody and I certainly never had any discussions with Wynn or anybody else about Lightbody. I didn’t pursue it because I didn’t know who the names were, anyway. I wasn’t involved in the land stuff,” Tocco told The Associated Press.
Wynn’s culpability in l’affaire Lightbody is a stretch at this point. However, the Massachusetts Gaming Commission could be in a 
world of hurt if, as the City of Boston alleges in a lawsuit, it neglected to do background checks on Tocco on DeMaria. (Walsh contends that the oversight was deliberate.) Currently, Lightbody and two associates are on trial for wire-fraud charges relating to their alleged concealment of Lightbody’s co-ownership of the former Monsanto Chemical site. That’s not the kind of publicity Wynn needs right now. Given the alliance of forces arrayed against Wynn Resorts, I sometimes despair that this casino will ever get built.
* Against (low) expectations, the Nevada Gaming Control Board says it is ‘investigating the [Culinary] union’s allegations‘ against Deutsche Bank, which holds a plurality of Station Casinos stock through sundry stalking-horse entities. With all due respect to the NGCB, to call this latest salvo from the Culinary “allegations” is bunk. Deutsche Bank’s actions are a matter of public record (and a Justice Department fine) and severe disciplinary action is only meet and fit.
