Good year for Atlantic City; Sands slapped with fine

Free market forces did what governmental intervention and flashy marketing campaigns could not: They steadied Atlantic City‘s casino economy. With the dead weight of four resorts-atlantic-citycasinos — Revel, Showboat, Atlantic Club and Trump Plaza — jettisoned, profits not only steadied, they improved. Last year’s $547 million operating profit represented an increase in excess of 40%. Carl Icahn‘s people, however, need to keep their eye on the ball. While the boss was chasing Trump Taj Mahal, profits at Tropicana Las Vegas fell 22%. New Jersey Casino Control Commission Chairman Matt Levinson called the phat numbers “an indication that the market is stabilizing after several years of turmoil. Every single operator reported a very solid performance for the year.”

The biggest winner, as it were, was Resorts Atlantic City, where the Mohegan Sun management team led it to a 525% increase in profitability. Tilman Fertitta, who once came close to giving up on Atlantic City, oversaw a 396% improvement at Golden Nugget. The repositioning of Bally’s Atlantic City as a grind joint also worked to its benefit, with profit up 77%. Even the lowly Taj went from a $1 million loss in 2014 to a $3 million profit, putting a cheerful postscript to the otherwise lamentable Bob Griffin tenure. Online, relief in the form of PokerStars, can’t come soon enough for Resorts Digital, where operating losses increased 293%. Caesars Interactive, by contrast, pivoted from a 2014 loss to a 2015 profit of $4 million. The lowest ADRs were at Resorts, the highest — no surprise, this — at Borgata, where rooms averaged all of $129.06 a night. The occupancy champ, however, was Caesars Atlantic City, 87% of its rooms taken, while the Taj averaged a dismal 49%. Griffin would probably try to argue that his hotel wasn’t half-empty, it was half-full.

* It cost Las Vegas Sands $9 million to not admit to wrongdoing in a series of Chinese transactions that drew SEC scrutiny. The casino giant did, however, say that the SEC’s Adelsonfinding were “consistent with those found by its internal audit committee,” according to Reuters. The actions that Sands says weren’t wrong included using a “beard” to try and purchase a Chinese Basketball Association team (illegal for foreigners doing business in China), as well as concealing efforts to buy a Beijing building, along with assorted other irregularities. Former Sands China CEO Steven Jacobs is claiming vindication, saying that the matters at issue wouldn’t have arisen without his wrongful-termination lawsuit, a contention pooh-poohed by Sands. The latter’s payroll will grow for the next two years, as the SEC is requiring it to hire an independent compliance consultant. Maybe Sheldon Adelson didn’t do anything wrong but he was sailing pretty close to the wind.

* In an effort to increase the acceptability to lawmakers of daily fantasy sports, both FanDuel and DraftKings are dropping amateur contests from their betting offerings. The move was lauded by NCAA President Mark Emmert, who wrote, “this action culminates months of hard work between all parties to reach a place that is good for amateur sports and, most importantly, the young people who participate.” DFS operators aren’t giving up much — 3% of their market — in return for what blogger Brian K. Tremblath calls the appearance that DFS is a responsible actor, capable of self-regulation.

* Macao lawmakers are “collecting more data” on the economic impact of a potential ban on smoking on casino floors and — more dire still — in VIP private salons. Junket operators, predictably, are dead set against making their high-roller clients go smoke-free. Besides, would Macao’s reputation for “hard, desperate gambling” be the same without a cloud of cigarette smoke? Ninety-nine percent of punters surveyed say it would. In other Macanese news, Deutsche Bank analysts are projecting a 27% return on investment from Wynn Palace Cotai, even with the new casino taking on $100 million in labor costs from Wynn Macau.

* Congratulations to Palace Casino, in Biloxi, winner of nine Gulf Coast Best of Dining dining awards from Casino Journal magazine.

This entry was posted in Atlantic City, Boyd Gaming, Carl Icahn, Dining, Economy, Environment, Harrah's, Internet gambling, Macau, Mississippi, Mohegan Sun, PokerStars, Regulation, Sheldon Adelson, Sports, Steve Wynn, Tilman Fertitta, Tropicana Entertainment, Trump Entertainment Resorts. Bookmark the permalink.