Author: David Mckee

Desperation, thy name is Genting Group. In its panic to obtain a New York City casino license, the gaming giant has offered unilaterally to pay 67% of its slot winnings to New York State. That’s right, two thirds. This dramatically ups the ante for anybody else wanting a Big Apple casino, an expected annual levy of $1 billion with a capital “B.” Executives at Las Vegas Sands, Wynn Resorts, Bally’s Corp., MGM Resorts International, etc., etc., have to be scowling in the direction of Resorts World New York City right now and with good reason.

A chorus of hosannas arose from Wall Street this week, singing the praises of Station Casinos. First off was J.P. Morgan analyst Joseph Greff, who upped his 2024 and ’25 projections “on stronger than previously modeled Durango [Resort] property estimates.” His 1Q24 estimates for cash flow goes to $242 million, with $38 million coming just from Durango Resort—and at the cost of 6% cash-flow decline at other Station casinos. The growth just keeps on coming, with full-year cash flow in 2024 of $919 anticipated, followed by $942 million next year. Wall Street, on the whole, expects $883m and $926m, respectively. And that’s not even Greff’s best-case scenario.

Craziness is the order of the day in Atlantic City. Late last week, police conducted a search of the home, cars and person of Mayor Marty Small (D). The constabulary’s five-warrant raid followed hard upon charges against Atlantic City High School Principal Constance Days-Chapman (“Aunty Mandy” to the Small family) for alleged official misconduct, hindering apprehension of another, obstruction of justice and failure to report child abuse. It is therefore worth noting that Mrs. Small is one La’Quetta Small, the superintendent of schools for Atlantic City. Nepotism much? Days-Chapman was also campaign manager for Mr. Small, so we’re dealing with a very cozy circle of cronyism.

Try to separate them. Just try. You can’t. They’re inextricably intertwined in a love-hate relationship. Or, as we like to say, you can take the casino out of politics but you can’t take politics out of the casino. Let’s look at some current events that illustrate this. Down in Mississippi, an attempt was made to juice a state-subsidized casino into Jackson, tiptoeing through the Lege when nobody was looking. Regulators were caught flat-footed, as were elements of the industry. The bill would have specified both the level of investment ($500 million, minimum) and the location (on the Pearl River). Also, it was a limited-bid scenario, with only owners currently operating in the state eligible.

Gaming observers awoke yesterday to the news that MGM Resorts International wants to be shot of struggling MGM Springfield, a $960 million albatross. No great surprise there. CEO Bill Hornbuckle had washed his hands of it a year ago, literally shrugging and telling the Boston Globe, “It is what it is.” Plus, the property president left late last year under murky circumstances and replaced with Louis “Louie” Theros, former legal counsel of MGM Grand Detroit. A curious choice, on the face of it. MGM grossly overestimated the regional pull of a Springfield casino and those chickens have evidently come home to roost.