Penn National backpedals; Feral bunnies terrorize Vegas

Penn National Gaming released fourth-quarter numbers and, according to Deutsche Bank‘s Carlo Santarelli acknowledged a “difficult start” at Hollywood Jamul (this despite having an extra-long runway to get the new property aloft). Santarelli called the tribal casino a “drag” on the company’s southwestern portfolio. Going forward, Jamul won’t be factored into Deutsche Bank’s projections for Penn. There goes the $15 million analysts had expected from Jamul, not to mention its role as a counterbalance to reduced market share in West Virginia. (Santarelli latter revised his sentiments, saying, “The start at Jamul is worse than expected, and we previewed it as being lackluster, but didn’t expect a $0 contribution from the asset in 2017, as management has guided.” Taking a anything-is-better-than-nothing view, he concluded, “Jamul represented roughly 1% of Company EBITDA prior to the print today and is now 0%, so it’s all upside from here in the event it turns around.” (emphasis added) Penn parent Gaming & Leisure Properties, in an unrelated investor call, did a fan dance about a potential new acquisition while simultaneously trying to downplay it.

JP Morgan analyst Joseph Greff had a different bombshell: the delay of any decision regarding of the much-anticipated Tropicana Las Vegas renovation until late 2017.  (The money will be put toward share repurchases instead.) Until then, $40 million will be spent on bringing bars and restaurants up to date. Even if Penn keeps us in suspense regarding the Trop, it’s nice to know that it’s not standing pat on the property. No word, though, on how the campaign to banish online-travel-agency guests in favor of Marquee Rewards ones is progressing. Encouragingly, ROI is in double-digits, whereas the Trop was, according to Penn, “barely profitable” when they bought it. Penn also made two “accretive tuck in acquisitions” of slot routes in Illinois, seizing opportunity while the competition stands pat — not a good strategy in the Land of Lincoln.

Penn has also neither forgotten nor forgiven its forcible expiry from Iowa. The trial date has been set for Penn’s courtroom vendetta against the Missouri River Historical Development nonprofit. Penn hopes to prove the MRHD “schemed” to be rid of Penn, which was ousted in favor of a Hard Rock-branded casino.

* Glenn Straub will open Ten on President’s Day weekend … without gambling. In fact, the return of the casino is “not even remotely imminent,” according to the Division of Gaming Enforcement. Straub’s argument that subleasing the casino excuses him from licensure didn’t sell with the New Jersey Casino Control Commission. Of course, Straub will appeal the decision rather than simply give up and walk away from the casino, even though it now constitutes a relatively minor part of his business plan. And Atlantic City casino bosses, who are enjoying an economic renascence, are hardly crying in their beer that Straub’s casino will remain indefinitely dark. (They are probably busier making scenarios for how best to exploit the impending legalization of DFS in the Garden State.)

There was little love on display at the NJCCC hearing. “Unfortunately, Mr. Straub, on multiple occasions, has misled people as he suggested he was ready to put thousands of people to work and open the facility, but that government regulations were blocking the process and creating red tape. In my opinion, this petition is another delaying tactic by Mr. Straub,” said Chairman Matthew Levinson, referring in part to a bungled attempt to rush the megaresort back into business last June. We are not unsympathetic to Straub but, as far as we know, his casino-management firm has not even begun to be licensed, so he’s putting a very large horse before the cart.

* Hard Rock International is serious about being a player in the Japan stakes. It’s formed a division expressly to pursue its Nipponese ambitions and appointed veteran Edward Tracy its CEO. Having been the CEO of both the Trump Organization and Sands China, Tracy knows a thing or two about working with difficult bosses and his Macao experience certainly won’t hurt when it comes to the opening of a new jurisdiction.

* You’d think that casinos would have figured out that long aisles of slot machines are a downer a long time ago. Apparently not, but kudos to Stratosphere for its new, player-friendly “end caps,” which are going over well with executives and punters alike.

* Las Vegas is proving to be as popular with rabbits as with tourists. The area finds itself rife with “bunny refugee camps.” According to one news site, they “overwhelm any attempt at government control, digging up public property, chewing on pipes, and ending up dead in the sewers.” Imagine the threat to the elaborate casino infrastructure! The state has allotted a small amount of money for volunteers to corral the problem but it’s a multi-million-dollar hassle. First Trump, now feral-bunny invasions — signs of the apocalypse, surely. The state says the problem will be gone in six months. Yeah, right. Tell me another one.

* Is Sheldon Adelson piqued by Steve Wynn’s elevation to finance chairmanship of the Republican National Committee? Adelson’s primary newspaper, Haaretz threw shade on the White House — and specifically senior advisor Jared Kushner, son-in-law of Donald Trump over the administration’s devoid-of-Jews International Holocaust Remembrance Day statement. The cluster of events could all be a big coincidence but Adelson was probably expecting more deference than he’s received since the election. Let’s just say it wouldn’t be out of character and leave it at that.

* Speaking of the apocalyptic, here are five souvenirs of the Atomic Age in southern Nevada, including must-see Atomic Liquors, where Barbra Streisand once shot pool.

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