Louisiana gets hammered; Three states legalize DFS

As we’ve noted before, May was hard on Midwest casino operators, nowhere more so than in Louisiana, where gambling revenue was down 13%. This marks seven months of same-store decline for the Pelican State, an exceptional slump, with the usually booming Lake Charles market taking the hardest hit, -16.5%. That led to a 19% tailspin for Pinnacle Entertainment, although although all major operators — Boyd Gaming -11%, Caesars Entertainment -10%, Gaming & Leisure Properties -15%, Isle of Capri Casinos -16% — had a rough go of it. Not only did Pinnacle’s L’Auberge du Lac ($21 million) plunge 29%, it lost primacy in Lake Charles to the Golden Nugget ($23 million, 5%), a signal victory for owner Tilman Fertitta. Also-rans in the market were Isle Grand Palais ($10 million, -16%) and Boyd’s Delta Downs ($16 million, -11%).

Caesars got to say it was No. 1 again, as Harrah’s New Orleans shrugged off a 3.5% dip to record $23 million and change for top-grossing status in the state. Elsewhere in the Big Easy, Churchill Downs actually recorded a gain (6%, the only revenue-positive property in the state) at Fair Grounds racino, grossing $4 million. Pinnacle’s Boomtown New Orleans was down 12% to $10 million, while Boyd’s Treasure Chest was off 6%, to $9 million. Outlying Boyd properties Amelia Belle (left, $4 million, -21%) and Evangeline Downs ($7 million, -14.5%) had it much worse. As for the crowded Shreveport/Bossier City market, Caesars was the victor again, surviving a 20% decline to record an area-best $15 million at Horseshoe Bossier City. Even reliable Eldorado Shreveport was affected by the torpor, recording an $11 million gross on a 15.5% falloff. In Baton Rouge, Pinnacle’s L’Auberge Baton Rouge outgrossed its two competitors combined, recording a $13 million gross despite a 6% decline. Tropicana Entertainment‘s Belle of Baton Rouge ($5 million) and GLPI’s Hollywood Baton Rouge ($5.5 million) were down 10% and 15% respectively.

* As daily fantasy sports giants DraftKings and FanDuel try to tamp down talk of a merger, DFS itself has been legislatively baptized in several states. Both Colorado (which would exempt small operators from regulation) and Missouri have fully legalized it, with Missouri taxing DFS at an 11.5% clip. In New York, a DFS-legalization bill sits on Gov. Andrew Cuomo‘s desk. Meanwhile, Nevada has its first legitimized DFS operator, Vic Salerno‘s US Fantasy. As you may recall, DFS operators are unable to peddle their product in the Silver State unless they have been licensed by the Nevada Gaming Commission, as was Salerno. Meanwhile, poll numbers show that the majority of TV sports viewers wouldn’t be watching if they didn’t have fantasy teams, which is pretty said when you come to think about it.

* At least one former casino executive, Howard Jay Klein, thinks the impact of the likely arrival of a NHL franchise in Las Vegas is being overstated. “The NHL is the weakest of
the four major professional sports leagues. Its been struggling for decades, hemmed in by a demo that has not grown beyond its traditional core. Low TV ratings persist. What limits its appeal is that too many teams are located in markets where the sport isn’t a strong part of the local sports ethos as it is with the NFL, MLB and the NBA,” Klein said (and Sin City doesn’t have a sturdy history of supporting minor-league sports). Still, he said the NHL’s approval would be “a significant plus” for MGM Resorts International, due to the proximity of multiple hotels to T-Mobile Arena, MGM’s half-ownership of the latter and “its strategic thrust into non-gaming amenities.”

* Thanks to having sold an I.O.U. from Jamul Indian Village in California, Golden Entertainment will be able to pay shareholders a special dividend of $1.71/share. That comes to a tidy $23.5 million, not too shabby for Golden investors.

* I don’t know if it’s innovation or desperation but Caesars has found a new way to monetize the underperforming Las Vegas High Roller: yoga. The good news for aspiring yogini is that the sessions take place during optimal sightseeing hours, 11:30 a.m. to 5 p.m. (The bad news is that it’s expensive.) It doesn’t necessarily beat early morning yoga with dolphins at The Mirage but Caesars gets props for creative thinking.