After blowing a half-million dollars on lobbying in Massachusetts, cantankerous casino owner Sheldon Adelson took his ball and went home, as reported earlier. Las Vegas Sands‘ rather weak excuse: “[Boston] didn’t synch up with our business model.” Sands fails to elaborate upon the logic whereby Connecticut can support two casinos but Massachusetts only one … theirs. The jet black-haired billionaire’s skittishness may have more to do with Suffolk Downs upping the ante to $1 billion (double the minimum) for its planned racino. Following asset sales in Missouri and South Africa, Suffolk partner Caesars Entertainment ought to have the cash to cover half that and still fund its commitment to Baltimore. However, I wouldn’t count on track owner Richard “Coastal Marina” Fields coming up with a half-billion dollars in a pinch, so Gary Loveman better offload a few more casinos, just to make sure Suffolk can back up its bid.
Even if Sheldon is sincere, he may be jumping the gun. Next month, the Massachusetts Gaming Commission, in the words of Chairman Stephen Crosby, will “re-look at what the market could bear, and see what is the economic prognosis for the model in the legislation … and we’re going to say, ‘What do you think of your projections now?’” In other words, they’ll be pondering what the traffic will bear and strongly imply that some licenses may be held in abeyance. It looks like the red-headed tycoon turned into a cheese-eating surrender monkey before the battle was truly fought. In the meantime, he’ll be pursuing under-served markets … like New York City, right, Shel? Yup, no competition there, nosiree Bob.
(Update: Another possible reason for Adelson’s reluctance — disappointing ROI at Sands Bethlehem, despite strong revenues. A Wall Street analyst pegs the latest project cost at $850 million, which puts the megaresort on pace for a 13% return on investment this year.)
Who knew? After its blockbuster deal with Peninsula Gaming, purchaser Boyd Gaming now finds itself the proud parent of four Louisiana OTB parlors. Since it will soon own two racinos in the Pelican State, those betting parlors should generate a tidy bit of synergy. Contrary to coverage in the Las Vegas papers, the Tri-Parish Times reports that Peninsula was $1.2 billion in debt and Boyd is only paying $200 million up front … but Caesars Entertainment wouldn’t have owned a Bally’s-branded riverboat in 1994, so take the TPT article with a grain of salt.
Boyd’s new ship, the Amelia Belle (left) is a well-traveled vessel, having gone through previous incarnations as Bally’s Casino, the Belle of Orleans (under then-Harrah’s Entertainment) and more ownership changes than I can count. Upon devouring Park Place Entertainment, Harrah’s sold Belle of Orleans to Columbia Sussex, who moved it west and rechristened it Amelia Belle … but only after having to repair severe Hurricane Katrina damage. (Dodged a bullet there, Loveman did.) She’s a doughty craft and her value has appreciated quite nicely (having been picked up by Peninsula for a mere $106.5 million). That must be somewhat chagrining for former owner Caesars, which has been dangling multiple properties for sale but hasn’t interested Boyd in any of them.
Cost-cutting much? It looks like a human sacrifice will be made to the gods of debt-servicing at MGM Resorts International. Word is, the company’s media-buy department will be downsized, with much of the work outsourced to R&R Partners. This bit of reported corner-cutting comes right after MGM officials were up in Toronto, brandishing promises of $3 billion-$5 billion in capital investment before provincial officials. Hey, when you’re $13.5 billion in the hole, what’s $5 billion more, right?
Any MGM cutbacks are a hangnail compared to the 27,000-person jobs massacre that new CEO Meg Whitman unleashed on Hewlett-Packard yesterday. I’m primarily surprised that there were any HP jobs left to eliminate after Carly Fiorina‘s reign of terror and error.
Las Vegas must be on the mend. When was the last time you saw improving Las Vegas Strip revenues cited as a buffer against disappointing returns from … Macao? Like never, right?
I have been to the Amelia Belle in its current incarnation. It is a massive ship with plenty of floor space to build out. When I was there it was owned by Col Sux, so you can imagine how underutilized it was then! Glad it is performing better and in all likeliness will continue to get better under Boyd (I am biased, I like the Boyd crew).