Rosy prospects for Boyd; Victories in Indian Country

Top Boyd Gaming executives sat down with JP Morgan analyst Joseph Greff and sketched out their program for the coming year, with includes new restaurant concepts at 12 casinos (including 20 new restaurants this year) and 167 hotel rooms at Delta Downs. The company sees its balance of gaming/non-gaming revenue tipping from 80/20 to 75/25 but does not think this will be a problem, food and beverage having often been a loss leader in the past. The new “offensive” is to bring non-gaming amenities to the forefront and make them more appealing to younger customers. This capital campaign is expected to cost the company $100 million.

While Las Vegas has lagged the economic recovery seen in Boyd’s various territories, the company’s regional properties are benefiting from higher employment, higher wages and lower gas prices. The only exception to this roseate picture is Par-A-Dice in Illinois, which has been besieged by slot routes in the Peoria area. Borgata and the South were characterized as “still strong.” Management continues to grapple with the idea of REIT conversion, as well as with additional acquisitions, even if the price expectations of potential sellers are “quite high.” One area where Boyd is concretely contemplating expansion is northern New Jersey, even if the proposed tax rates “could make for a tough return.” Furthermore, it couldn’t use the Borgata brand unless co-owner MGM Resorts International chipped in, meaning Boyd would probably have to open the new casino under one of its other brands.

* How did the Mashpee Wampanoag get a reservation in Massachusetts — and casino-enabled status without a congressional “fix” of the Carcieri v. Salazar case? The answer lies within a subtlety of Carcieri‘s legalease: That the tribe only had to be “under federal jurisdiction” before 1934. And the Mashpee band had a history of governmental relations dating back to the era when the 13 original states were British colonies. “Historic leaders of the Mashpee Wampanoag had the foresight to create permanent deeds from themselves to the tribal people and to record those deeds among the others establishing land rights in the Plymouth colony,” writes attorney Judith Shapiro. Such perspicacity looks like it will pay off for the Mashpee tribe in short order.

* “It’s a great story. Who would have guessed tiny casinos in smoky block buildings and sprung structures called ‘bubbles’ would grow into a $28 billion industry?” So says Hnedak Bobo Group principal Dike Bacon of the evolution of tribal casino design. It’s a fascinating saga, including the introduction of natural elements to make up for a “lack of biophilic activities” to a growing emphasis on tribal iconography.

* Speaking of Indian County, National Indian Gaming Association Chairman Ernie Stevens Jr. urges tribal members to get out the vote this year and to press presidential candidates on their stances on Native American issues (which have largely gone unaddressed.) He gives a retrospective endorsement to the current administration, saying it “has taken administrative action to reform Indian education, economic development, and the restoration of traditional Indian homelands to tribal government control … more than any other in the past, [it] has worked to protect sites sacred to native people and provide access for religious practices on federal lands. Tribal leaders, be those on the ground in tribal government or those appointed to positions of importance, have fought to have many injustices made right in this historic administration. We applaud them for pushing for humanitarian solutions to age-old problems in Indian Country.”

* A lack of anti-money-laundering protocols at Philippines casinos may have led to those same casinos being used as laundromats for Bangladeshi cash pilfered from the Federal Reserve Bank of New York. The $100 million theft was part of a larger, attempted heist of $1 billion. The casinos named in the scandal include Melco Crown Entertainment‘s City of Dreams Manila. GGR Asia reports that the during the theft “there were no signs its systems had been hacked, and that instructions to make the payments from the Fed’s account followed standard protocol – which could hint at a highly sophisticated plot.” Melco Crown said it had “no knowledge” of untoward transactions. The U.S. State Department had already declared that “International experts and observers note that the Philippine casino industry is a weak link in the country’s AML/CFT regime.” Pagcor, the Philippine agency charged with casino regulation had lobbied for casinos to be excluded from AML laws and now has egg on its face. This kind of Wild West atmosphere provides a clue as to why U.S. companies give casino development in the Philippines a wide berth.