“You come, you stay, you go/It really doesn’t matter/You’ve done it all before/By now they’ll know the pattern.” — ABBA
OK, so Benny & Bjorn were writing about a gal named Elaine not a hurricane called Irene. Although the storm is estimated to have cost Atlantic City casinos $40 million last month, it didn’t change the underlying narrative. J.P. Morgan‘s analysts have accounted for the Irene Effect and estimate that the Boardwalk would still have been -9% from August 2010, acts of God notwithstanding. That’s on top of an 11% declivity in August ’10 and Morgan’s Joseph Greff expects “results will continue to remain soft.” Last June’s mild 4% drop in business looks more and more like an aberration, not “a light at the end of the tunnel.”
Tropicana Atlantic City, Borgata and Caesars Atlantic City rode out the storm best, while Irene considerably amplified the misery of the city’s lesser casinos, with Trump Plaza falling into last place for the first time I can recall. Bright spots amid the gloom include 10% higher table revenue at Borgata, 22% greater slot drop overall and a 9% slot hold. Well, maybe the latter isn’t a “bright spot” if you’re a player.
Misery loves company. Irene dampened slot revenues in Pennsylvania, too, generating some soggy numbers that newbie SugarHouse and besieged Harrah’s Chester Downs (right) could do without. Caesars Entertainment CEO Gary Loveman, however, brushed off $25 million in lost East Coast revenues as chump change. Only Mohegan Sun at Pocono Downs (+8%) and Rivers Casino (+6.5%) did better at the slots this year, although Presque Isle Downs General Manager Fred Buro was more inclined to blame the general economy than the barometer.
Balancing act. Staying upstate for a moment, Sands Bethlehem is planning to break ground this month on a concert venue and have it open by next Memorial Day. Construction deadlines and Las Vegas Sands have a habit of intersecting to form a null set. But company COO Michael Leven (left) is clearly determined to be done with $800 million Sands Bethlehem PDQ and plans call for a standard proscenium theater. Presenter-to-be Live Nation might find itself in an uncomfortable position: Client Borgata might not appreciate Sands poaching on its turf with Live Nation’s help. However, Borgata’s hydraulic-lift stage should give it an edge in terms of booking certain acts (especially rock concerts, I would expect). Sands’ efforts to cut in on Atlantic City‘s action will be circumscribed by the limitations of its events center, as well as by any desire Live Nation has to keep both it and Borgata happy customers.
Overseas, it looks as though Sands China needs another $200 million as Cotai Strip™ Sites 5 & 6 lumber toward completion. Considering the amount of revenue that Macao has been throwing off this year, Sheldon Adelson shouldn’t have too much trouble rounding up the extra patacas for a mega-loan who risk is ameliorated by being spread across 10 banks. I’ve heard tell some interesting yarns about how Chairman Sheldon is perceived in the People’s Republic of China and elsewhere in the Pacific Rim … but that’s a story for another day.
