Isle abandons ship; Borgata crushes Atlantic City; Radical move from Full House

Faced with a casino that had been generating negative return on investment for the past two years, Isle of Capri Casinos announced it was closing its 15-year-old Natchez riverboat and mcdowellselling the accompanying hotel to Magnolia Bluffs Casino for $11.5 million. The riverboat had been doing $87/slot/day on average — abysmal by any industry standard. The question isn’t why Isle made the move but why it left the patient on life support for so long. CEO Virginia McDowell has been trying to trim the Isle ship since taking over but this move seems rather tardy. Deutsche Bank analyst Carlo Santarelli speculates that the gaming inventory will be divvied among other properties. Isle isn’t selling the vessel itself, which makes one speculate whether they hope to drop anchor in another market.

* The latest numbers are in for Atlantic City and July saw a 7% decrease in gaming revenues, albeit a 7% increase on a same-store basis (i.e., without the four dead casinos). Table play was up 10% but luck didn’t favor the house, which only saw a 1% increase in revenue. Slots were the culprit for the decline, down 10% on lower coin-in. Borgata ($72 million) remained impervious to market forces, up 19%. Coin-in there was up 12% and the win rose 7%. Borgata table games revenue increased an insane 53% even though customers played only 2% more money. Internet gaming revenue also provided Atlantic City with a cushion, bringing in $12.5 million.

Due to a glitch with J.P. Morgan software, numbers for the non-Borgata casinos were not immediately available.

* When Full House Resorts deferred a potential magazine profile, I thought something was up. Indeed something was. Full House CEO Dan Lee is proposing a casino for what used to be the terminal (more specifically the former rental-car hub) of the Indianapolis airport. DanLeeHe describes it as a “a lifestyle center … anchored by a small casino” which would draw fly-in business from other states. The specifics of the proposal, American Place, include a skating rink, 20o condos, a $150 million casino, a 25-suite hotel for high rollers, a movie theater, health club and 700,000 square feet of retail, all connected by a tram.

Anticipating the oft-articulated concerns of Indiana Gov. Mike Pence (R), Lee says this wouldn’t be an expansion of gaming in the Hoosier State. Instead, 50% of struggling Rising Sun‘s 1,400 gaming positions would be relocated to Indianapolis. (The move would require legislative approval.) No one has proposed a casino for Indianapolis in years and we have to hand it to Lee for thinking outside the box on this one, in a move born to some degree of desperation: Lee says Rising Sun revenues have fallen 75% since the advent of casino gambling in Ohio.

The Indianapolis Star describes Lee’s proposal as “a hard sell. Centaur Gaming, owner of two nearby racinos was quick to lash out, calling it “ludicrous to believe that the legislature would permit the holder of a gaming license to ‘divide up’ its license and operate from different locations,” citing the rejection of a proposal by Majestic Star to do something similar with its riverboats. Lawmakers contacted by the newspaper tended to agree, noting that once you start subdividing gaming licenses, where do you stop?

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