Strip still catching up; Nevada taking bets on the Olympics

While gaming companies on the Las Vegas Strip are fairly sanguine about 2016, a new report by Alex Bumazhny of Fitch Ratings takes a somewhat gloomier view. For one, he notes that revenue per available room “growth during the recovery has lagged the national average despite virtually no new capacity since 2010, which may suggest that the market is still digesting decade-old new supply.” Should there be another recession, though, he says the big boys are better positioned to ride it out, not being deeply into merger activity or new, capital-intensive projects. But the good news sort of ends there: “The weakness in Macau has spilled over with the Strip baccarat volume on track to decline by around 20% in 2016. Weakness may persist into 2017 as four additional resorts open in Macau and the dollar further strengthens.” At least Las Vegas‘ economic diversification (think restaurants, amenities) shields it from “lackluster” regional gaming prospects, according to Bumazhny, who says this “supports a view that the Strip resorts are real estate investments and should trade at comparable multiples.” So I guess that’s one more vote for REITmania.

* As Westgate Las Vegas Sports Book Director Jay Kornegay points out to the Los Angeles Times, the Olympics are now tantamount to a professional sporting competition, full of paid mercenaries. “I don’t think there’s anything wrong with it. The Kenyans in the marathon, the Russians — they get paid. Our athletes get endorsements. There are very few amateurs left,” Kornegay said. His stance is scarcely that of a disinterested observer, since this will be the first Olympiad on which Nevada sports books are allowed to take bets in 15 years. (That’s one way to raise spectator interest.) No doubt this has occasioned great howls of outrage and much rending of garments within the International Olympic Committee, but that body occupies no moral high ground, having turned a blind eye to everything from blood doping to Tonya Harding. “The purity of the Olympic movement was lost years ago when the [IOC] removed any distinction between amateurism and professionalism. Only in the U.S. does a portion of the population actually believe in what even the IOC calls this ‘magic dust,’” said Stephen Mosher, who teaches sports ethics at Ithaca College.

Most of the betting action is expected to be on events like boxing, swimming, volleyball and (of course) basketball, although the U.S.’ overwhelming domination of the latter will put a bit of a damper on the wagering. British sports books took Olympic action when the 2012 summer games were hosted by London, which caused Nevada to think about getting a slice of the pie. Don’t worry about figure skating being wagered upon when the next Winter Olympics rolls around. Says Kornegay, action will be taken only on sports which are “scored or timed, not voted upon by judges, with the exception of boxing, because that is the accepted form of scoring … it’s going to be a very selective menu at most books — basketball, soccer, golf. You’re not going to see rowing, kayaking, fencing, handball.” Kornegay adds that Olympic betting is a mixed blessing: “It’s a lot of work.”

* Chef Alex Stratta has fared even worse in Arizona than he did at Wynn Las Vegas. The award-winning chef has up and left Prado at Omni Scottsdale Resort & Spa at Montelucia after a tenure of only a few months. Las Vegas isn’t a one-horse town. Surely someone could entice Stratta back to the Strip.

* Considering the long tradition of anti-casino sentiment within the Republican Party, there are a number of ironies embedded within the week-long Donald Trump infomercial being held in Cleveland. Not least of these is that the venue is Quicken Loans Arena and that company was founded by Dan Gilbert. Yes, that same Dan Gilbert who not only owns Greektown Casino in Detroit but Jack Cleveland Casino … less than three blocks from the arena. And Ohio casinos and racinos just broke the $1 billion mark in revenue during their four-year lifespan to date, with $21 million of that going to programs that discourage pathological gambling. Said an optimistic American Gaming Association President Geoff Freeman, “The Republican National Convention offers a chance to highlight the significant contributions, from $1 billion in tax revenue to nearly 18,000 good jobs, gaming makes to Cleveland and across Ohio.” Somehow I doubt that will become a talking point any more than Pennsylvania‘s record-high fiscal year at its casinos will be highlighted at the Democratic National Convention when it assembles in Philadelphia. Political parties run scared from the casino industry’s embrace but it’s harder and harder to find places to hide. By the way, Penn National Gaming, you’ve got a problem at Hollywood Casino at Penn National Race Course, the only casino in the Keystone State to see declines in slot and table revenue.