Indiana market battered; Foxwoods branches out

One less weekend of business hit Indiana casinos fairly hard last month. The state’s industry was down 7%, to $186 million. Patrons were spending more — a heartening metric — but foot traffic was off nearly 12%. However, even less playing time couldn’t keep customers away from hardy Tropicana Evansville, up 6% to $11 million. Indiana Downs also had a good month at the wickets, up 4% ($23 million), while French Lick Resort enjoyed a 2.5% uptick, grossing $7 million. The big operators didn’t have such a good time of it. Pinnacle Entertainment took it in the chops, plunging 14% at Ameristar East Chicago ($18 million) and off 6% ($10 million) at Belterra. The Chicagoland market was particularly afflicted, with Horseshoe Hammond falling 11% ($38 million) and the two Majestic Star boats off 6% and 9.5% million respectively, for an aggregate gross of nearly $13 million.

Penn National Gaming‘s Hollywood Lawrenceburg was down 9%, to $14 million, while Caesars Entertainment‘s Horseshoe Southern Indiana slipped 7%, to $21 million. Rising Sun was setting last month, down 6% to $4 million. In the state’s northern tier of properties, Boyd Gaming‘s Blue Chip was off 4%, for a $14 million gross. In the Indianapolis area, racino Hoosier Park dove 13%, to $16 million. Let’s hope June is kinder to operators.

* JP Morgan analyst Joseph Greff sat down with Gaming & Leisure Properties and, in general, founding it to be taking a breather from its consumption of Penn National and Pinnacle. GLPI executives said they weren’t looking at any acquisitions that weren’t significantly and immediately accretive (for those who back the hare over the tortoise). Greff reported that GLPI “has initiated casual, introductory-esque conversations to engage in an ongoing dialogue with potential sellers … GLPI would consider a greenfield (though it sounds like a very low probability scenario/event) if a new gaming market were to open up (e.g., Atlanta, Texas), though it is currently restricted from initiating on any greenfield within 60 miles of any PENN or PNK property so it is unlikely a greenfield would be feasible in an existing gaming market.” Remember that, prior to being acquired by GLPI, Penn owned two racetracks in Texas, so this talk of greenfield markets is anything other than idle speculation.

* What does $2 million buy you? Well, if you’re the Mashantucket Pequot Tribe, it gets you naming rights to a new, $265 million casino going up in Biloxi. The Pequots will also be collecting on the back end of the deal, as they’ll be managing Foxwoods Resort Casino at Biloxi Pointe. (There’s turnabout for you: Native Americans showing white folks the ropes on how to run a casino.) They’ll also bring their player database to the party. Foxwoods’ endorsement doesn’t get Biloxi Pointe out of the woods, though. It’s still scrounging about for development capital. In particular, it’s using that new favorite device of the casino industry, the EB-5 visa. The plan, in the works since at least 2012, calls for Mississippi‘s fourth-largest casino resort, with 500 hotel rooms and 1,400 slots.

Developer Chris Ferrara is shooting for a 2o19 opening, although Fitch Ratings analyst Alex Bumazhny is skeptical about how elastic a market he will find. “It’s a secularly challenged market that’s not going to sustain growth over a long period of time,” he told the Biloxi Sun-Herald. Ominously, it’s near the site of defunct Margaritaville casino. Vehicular access is also an issue, although Biloxi is using Deepwater Horizon reparations to build more roads in the area, with Ferrara chipping the majority of the needed funds. The Foxwoods name gives this project credibility but to say it’s going to be a sure thing is way premature.