Deutsche Bank analyst Carlo Santarelli has been a busy man these past few days, meeting with the top companies in gaming. In no special order …
Boyd Gaming took the usual line on REIT conversion and acquisitions, basically saying, “If we have anything to report, we’ll 
tell you.” Boyd says it hasn’t been surprised by regional-market softness, continuing to believe in the underlying health of the sector and having “noticed a correlation between lower-end consumer spend and events such as the flash crash and government shut down.” Do you hear that, Congress?
Lastly, Boyd is seeing millennials drawn to its non-gambling attractions and creating a larger demand for its table games in downtown Las Vegas. “That said, management noted that the core customer remains the baby boomer, as the average age over the last 10 years has only increased by 1 year.” However, Boyd believes its slot product is au courant and isn’t planning any significant reinvestment at this time.
Pinnacle Entertainment reports “very healthy” revenue across its Upper Midwest properties, driven by higher player spend, not
greater foot traffic. The Denver market was described as “bullish,” boding well for Ameristar Black Hawk. Management noted that there was still value to be extracted from the Ameristar-branded properties, both from integrating Pinnacle’s myChoice loyalty program and “unlocking historically suppressed table game play.”
Gaming & Leisure Properties Inc. stated that, antitrust laws be damned, it was looking for more companies to devour whole, as it has done to Penn National Gaming and Pinnacle Entertainment. Never accuse GLPI of thinking small. Unlike Pinnacle, GLPI reported no softness in energy-producing markets.
MGM Resorts International has set year’s end as its deadline for announcing whether it will go the REIT route or not. It’s 
sanguine about Las Vegas Strip room revenues and convention bookings, looking for even greater improvement next year when the AEG Arena is in play. Chinese whales have been scarce (down 30%) but players from other Asian countries are taking up some of the slack. “Management continues to believe the expanded footprint in Macau will help better diversify revenue and alleviate some cost pressures, though confidence in a recovery remains fleeting,” wrote Santarelli, adding that the opening date for MGM Springfield is now officially Sept. 20, 2018.
Isle of Capri Casinos‘ newish Fan Club loyalty program, marking its first anniversary, “continues to support growth and loyalty,” management said. Slot routes in Illinois are putting some pressure on Isle’s Bettendorf casino and visibility of the company’s performance in Lake Charles is clouded by the confluence of softness in the Houston market and the newness of Golden Nugget Lake Charles, a situation unlikely to become clear until mid-2016. Santarelli characterized the new, land-based Bettendorf casino and a 2017 hotel at Isle of Capri Pompano Park as “defensive in nature.”
Wynn Resorts has “minimal … balance sheet risks” despite ongoing “ambiguity” in Macao. Santarelli is projecting nearly 15% return on investment for Wynn Palace, which could only be 
construed as a disappointment in the context of the go-go years in Macao. How many table games it will get remains a question mark but all the retail spaces are spoken for. As for the recent junketeer-theft scandal, Santarelli wrote, “While much has been made about the Dore theft (Dore continues to operate at Wynn [Macau]) and the potential fallout, management believes, as do we, that the very recent market weakness relates more to the seasonal slowdown ahead of the holiday than VIP issues stemming from Dore.”
On the Strip, Wynn is trading off high occupancy in favor of greater ADRs and reports that it is seeing record levels of spending per occupied room. Wynn also stood by its Everett project, which will largely be debt-financed with “a sliver of equity,” probably derived from Strip cash flow.
* Back in 2012, NFL Commissioner Roger Goodell explained 
away the league’s acceptance of daily fantasy sports, saying in a deposition, “We don’t look at fantasy sports as gambling.” His rationale was that sports betting contains prize, chance and consideration — like DFS doesn’t, Rog? The NCAA is not being so phlegmatic, imposing a one-year fine on players revealed to be playing DFS.
