Penn, Vegas to GSA: Thank you!; What price Victorville?

By David McKee ~ April 19th, 2012 @ 2:58 pm

With so many fine hotels to choose from in Las Vegas, it’s no wonder that it took disgraced General Services Administration Regional Commissioner Jeffrey Neely no fewer than eight ‘fact-finding’ missions at a cost of $130,000 (or $16,250 per vacation investigation) to settle upon M Resort. This is serious research, people! But hey, as long as the GSA’s in a generous mood, we’ll take it. Unfortunately, the words “Las Vegas” are all that’s required to get the churchy set’s panties in a twist, so this scandal — and it deserves to be one — has become a much larger political football than it would be had the offending orgy been held at the Sheraton Tuscaloosa … if such a hostelry even exists.

So far, it appears that the conduct of Penn National Gaming was on the up-and-up, as ABC News attests. Hell, M even threw in a $21,540 discount, which was pretty damn “george” of them. And kudos to the Penn execs who wooed the GSA away from high-powered competitors on the Strip. Well played!

If any Penn execs had their feelings hurt by the media fallout of recent days, they’re crying all the way to the bank. Penn shocked Wall Street with boffo 1Q12 profits, despite a projected forfeiture of $8 million in business at $320 million Hollywood Casino Toledo, due to a delayed opening. Penn’s about to get another bump as $145 million Hollywood Casino at Kansas Speedway hosts its first NASCAR race of the year. (That casino came in $10 million under budget, incidentally.)

Deutsche Bank‘s Carlo Santarelli called the first-quarter numbers “a best of both worlds scenario,” brightening the outlook for what had been a cloudy-looking 2012. He went on to characterize Penn stock as “the best way to play the domestic consumer recovery in gaming.” Those consumers about whom Penn execs used to grumble ungratefully are now coming back and the erstwhile grumblers are the beneficiaries. J.P. Morgan analyst Joseph Greff speculated that Penn’s Charles Town racino was driving the improved results, which makes the company’s tantrums and sleazy Maryland machinations against Cordish Gaming look all the sillier in retrospect.

Also shimmering along the Penn horizon are management fees from Casino Rama, in Ontario — although they sunset this year — plus an earlier-than-expected opening of $400 million Hollywood Casino Columbus (in October rather than November). The Penn-style VIP (someone who drops $400 or more per visit) is on the rise and comp wars have abated, driving down promotional costs. Still on the drawing board are two Ohio racinos (a $550 million investment), which will be coddled from competition by 50-mile-radius exclusion zones. (A nice “juice job,” that.) The company’s push for a second location in Maryland remains inconclusive at this juncture, the Lege having gone home without even considering Rosecroft Racetrack as a casino location.

Penn pooh-poohed cannibalization both specifically (at Hollywood Casino Lawrenceburg) and in general. However! March numbers from the Kansas City area put the lie to Penn’s assertion. The Speedway casino took an 8% chunk out of the market’s ass and the biggest victim was … Penn’s Argosy Riverside, down 21%. By contrast, Ameristar Kansas City took a 6% hit and Harrah’s North Kansas City got off with a -2% scrape. Sailing serenely through the month was Isle of Capri Kansas City, whose revenues remained steady. Penn’s blowing smoke up Wall Street’s rectum and analysts are, for the moment, inhaling.

Elsewhere in Missouri, the could-use-a-break folks at Caesars Entertainment staged a big comeback at their Maryland Heights casino (up 8%) and Ameristar St. Charles was flat in March, suggesting that Pinnacle Entertainment‘s River City (+13%) has been absorbed. However, the same company’s marquee Lumiere Place, right, continues to slip (-3%, down for the fourth straight month), possibly a victim of resurgent Casino Queen in East St. Louis. Two outstate boats, in Caruthersville and Boonsville, fared well, closing out a robust quarter for Isle of Capri Casinos in its home state.

What price Victorville? According to a worshipful story on the KXNT Web site, the controversial Desert Xpress will whisk you from Victorville to Vegas for $50. Since it’s a 166-mile trip, it would cost less to drive that distance — assuming $5/gallon fuel and a decent gas mileage in one’s automobile. (Those who own gas-guzzling “Mormon assault vehicles” do not have my sympathy.) That perfunctory article drew an uninformed shriek of dismay from National Review blogger Greg Pollowitz, who got off on the wrong foot by blasting some phantom named “Harry Ried [sic]” in his headline. He then blames this particular Sen. Harry Reid (D-NV, right) porker on “spending fetishists in the Democratic party.” Had Pollowitz done his homework — ha! — he’d know that Old Sixty Votes is returning a favor to former Ronald Reagan emissary and local GOP string-puller Sig Rogich. The Choo-Choo To Nowhere is Sig’s baby and Reid’s support is payback for Siggy’s “juice” during the 2010 election. At least when Sig was shilling for the infamous Voyager Wheel, he had the decency not to cadge for taxpayer subsidies.

Merengue fever. On the subject of typos, it’s “beachlife” time at the Hard Rock Hotel & Casino (with unseasonal temperatures to match). The HRH is busting out “Latin house, meringue [sic] and top 40″ music. Now, my Mom used to make a wicked Lemon meringue pie (until she changed the recipe, that is) but we at LVA think the HRH means merengue music, not pie filling. As to whether the monotonous industrial thumpa-thumpa-thumpa of the “house” genre can be dignified with the term “music,” that is a topic for another discussion.

A mystery flu debilitated me for four days straight, so I hope you will forgive me: I am in frantic catch-up mode at present, slaying incoming e-mails by the score.

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