No question about it, THE gaming-industry story of 2011 was both an economic and political one: How the Great Recession has essentially broken the back of anti-gambling resistance in the corridors of American power. We can see it up and down the East Coast and throughout the Bible Belt. For instance, if Maryland has casino licenses it can’t give away, that’s because voters approved a confiscatory tax rate in 2008. Finding few takers (and having seen only one slot parlor and one racino open since ’08), lawmakers are trying to claw back some of what the electorate imposed. State senate President Thomas V. “Mike” Miller (D) is offering an incredibly “george” deal in return for adding a sixth slot parlor in Prince George’s County. The enticements include table games — with all proceeds being kept by the operator — as well as a lowering of the state’s dizzying 67% tax rate, possibly to 60%. Even so, Cordish Gaming, currently
a-building at Arundel Mills (right) balks at having another competitor plunked on its doorstep. Miller’s master plan is to lay out a 40-mile casino corridor, starting in Prince George’s and ending at the door of Caesars Entertainment/[partner to named]’s Baltimore slot house. Interestingly, given how drawn-out and disappointing casino legalization has proven for Maryland, Miller’s putative allies are greeting his proposal with a deafening ‘meh.’ Sixty-seven percent in the hand is evidently preferable to 6o% in the bush.
Good times ahead? All right, so 2011 was a pretty ‘bleah’ year for Louisiana, which finished with resounding 0.0% revenue growth from 2010. That’s right: Flat.As.A.Pancake. (Worse than flat, if you adjust for inflation.) However, that $2.4 billion gross is a doldrum through which the Pelican State shall soon pass, the Louisiana Gaming Control Board predicts, spurred by three new projects that represent a billion dollars’ worth of investment. Adding competition to Shreveport (down 4% last year) seems unwise, but Pinnacle Entertainment and Dan Lee/MGM Resorts International are looking smart by wagering on Baton Rouge and Lake Charles, respectively. “Red Stick” eked out a 1% gain (while New Orleans went the opposite direction), even though the buzzards are circling Tropicana Entertainment‘s Belle of Baton Rouge, where revenues fell 12% in 4Q11.
No surprise, Pinnacle’s L’Auberge du Lac was 2011’s premier performer (up 7% for a state-topping $353 million), leading that market to a 5% gain. Bossier City saw the two hardest-luck stories of the year, little Diamond Jacks (-7%) and Boyd Gaming‘s Sam’s Town Shreveport (ditto). Despite ceding market share in two cities, Caesars had the second- and third-highest-grossing casinos in Louisiana, rolling up $559 million between them.
No respect. Woe is Caesars’ Atlantic City tribune, Don Marrandino. Finding a sympathetic ear, he moaned, “I don’t know of any city in the country, not even Las Vegas, that has the number of shows and variety that we had here [in 2011]. And we don’t get enough credit for that, for some reason.” Earth to Marrandino: That’s what customers expect. It’s part of your unspoken pact with them. We spend at your casino, you entertain us. Deal! It’s a transaction as old as the industry itself. Besides, the plight of the underappreciated casino executive does not resonate with the public. It’s not enough that Marrandino’s got their money, now he wants their gratitude. What sauce!
Once you get past the hand-wringing, Marrandino divulges a forecast or two, including the expectation that his struggling Showboat property will be lifted by next-door neighbor Revel’s tailwind. Tropicana Casino & Resort CEO Anthony Rodio looks into his crystal ball and predicts revenue growth for Atlantic City in 2012. We’ve heard that before but the Boardwalk’s fallen so far, surely it’s hit bottom by now … hasn’t it?
