Author: David Mckee

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Wynn’s Arabian nights; White Paper no whitewash

Rendering of Wynn Al Marjan Island – Interior view

Resisting the temptation to call it Aladdin 2.0, executives at Wynn Resorts unveiled designs of their United Arab Emirates casino resort, Wynn Al Marjan Island. Noting that its’ the company’s first oceanfront resort, Wynn is quick to assure us that the casino is 1,000 feet above sea level, presumably safe from the depredations of global warming. The company is specific about the budget ($3.9 billion) but vague regarding what the finished product will offer. “The project will pave the way for the accelerated growth of allied business sectors,” we are promised. What the company is prepared to say is that there will be 1,500 guest rooms and suites, 24 unspecified eateries, and oh yes, “a gaming area.”

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Boyd praised; Graft at Wynn?; NFL hypocrisy

Wall Street analysts loved up on Boyd Gaming following its 1Q23 earnings call. Boyd, Deutsche Bank analyst Carlo Santarelli wrote, “delivers another strong performance … the merits of the story remain compelling on a relative basis.” He pushed his price target to $78/share from $76, rating the stock a “Buy.” He added that “while a beat was expected,” investors had to be liking the Las Vegas locals upside, as well as the company’s digital performance and its handling of Sky River Casino in California. “As we previously noted, we did not expect the 1Q23 upside to come as a surprise, nor did we expect the quarter to serve as a meaningful near term catalyst for shares and we remain of this view.” Still he praised Boyd for its Downtown exposure and new amenities there, for its online and managed-casino revenue growth, its healthy balance sheet and for “Capital returns via dividends and buybacks.”

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Blame it on baccarat; Crime at Hard Rock; Dixie-dumb

The Great American Gambling Craze isn’t abating, although Las Vegas Strip revenues slipped 3% in March, down to $724.5 million. This was paradoxical, as it came in a month in which airline passenger loads into and out of Las Vegas grew 25% year/year, buoyed by two Taylor Swift concerts and March Madness. Part of the problem was bad luck by the house. Baccarat win plunged 50% despite on 5% less wagering as the man saw relatively little ($63 million) of the $604.5 million that was bet. Other table games revenue was actually up 7% to $239 million, while slots did well also, hopping 6.5% to $422 million. Still, the baccarat bath was sufficient to pull Strip table revenues from 7% up to 14% down.

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Mob merriment; Golden Nugget woes

What the hell were you thinking, Bally’s Corp.? The company’s struggling Atlantic City casino recently hosted a meet-and-greet featuring mobster Gianni Russo. Our Boardwalk correspondent, who was there, says Russo is “a lifelong member of the Mafia, who was in The Godfather. [He played Talia Shire‘s doomed husband.] It was both a strange and very interesting presentation. He told his story along with screens showing many photos of people he interacted with, with film clips (my favorite was Elvis Presley and Frank Sinatra singing a song together), newspaper headlines, and also sang a few songs! The promotions said there would be gifts; they had five violin-shaped liquor bottles, and each invited guest received a signed copy of his book . No other gifts. They had an open bar and some desserts.”

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Sands hailed; A’s to Vegas; Coney casino razzed; Mega-Jottings

First-quarter numbers for Las Vegas Sands were “nicely ahead” per J.P. Morgan analyst Joseph Greff, who said Sands’ Macao casinos were firing on all cylinders (mass-market play, VIP action, slots, retail and lodging). He expected Macanese cash flow of $304 million and got $385 million, far more than the rest of Wall Street was awaiting. “There is still ample room for further recovery,” Greff wrote, noting that Sands had achieved the near-unthinkable with only 69% of hotel rooms (due to a labor crisis), 25% of normal ferry capacity, low passenger loads—39% of capacity—at Macao’s dinky airport, and “less robust visitation” from Hong Kong (74% of peak performance) and Guangdong Province (55%). Retail sales of $109 million were particularly impressive, as they hit 95% of pre-Covid altitude. Beyond that, Chinese mainland visitation is very low: 27%. Still, he expects “a rising tide to lift all Macau boats.” As for Sands itself, its labor crunch is expected to ease by summer, so neither Greff nor management is worried.

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Pennsylvania, Lousiana flagging; All eyes on Macao

Casino winnings in Pennsylvania stuttered last month, hitting $311 million, flat with March 2022. Spreading more gaming wealth among a greater number of properties obviously isn’t helping on a same-store basis. Parx Casino maintained its supremacy with $53 million, despite a 5% slippage. Elsewhere in the Philadelphia area, Philadelphia Live jumped 5.5% to $22 million, besting nearby rival Rivers Philadelphia ($21.5 million, -6%). Harrah’s Philadelphia plunged 10% to $14 million, falling tantalizingly close to Valley Forge Resort, whose $13 million represented a 2.5% gain. In the Pittsburgh market, Rivers Pittsburgh was flat at a still-impressive $33.5 million. Rival Hollywood Meadows galloped 17.5% faster to hit $19 million while Pittsburgh Live gained 5% to reach $10.5 million.

As for the outstate casinos, Wind Creek Bethlehem dipped 1% to a massive $45 million, leaving behind Mohegan Sun Pocono ($19 million, -2%) and smoky Mount Airy ($16 million, +8%). Presque Isle Downs was down 11.5% to $9 million, Hollywood Penn National slipped 3.5% to $16.5 million and Lady Luck Nemacolin plunged 21% to $1.5 million. Amongst the satellites, Hollywood York leapt 14% to $9 million, Hollywood Morgantown vaulted 22.5% to $6.5 million and Parx Shippensburg booked $3 million.

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Atlantic City still up; Full House fuels diners; Japan payday?

Casino revenues were outstripped in New Jersey in March by i-gaming ones, $228.5 million to $253 million. But Atlantic City continued to be healthy, up 5.5%. Slot winnings were 1% higher on flat coin-in but table games did 7% better despite 5% less wagering. Bottom line: Players spent less, lost more. Borgata galloped 12% ahead to $61.5 million (not too shabby for a 20-year-old resort), while Hard Rock Atlantic City remained fairly static, up 2% to $40 million. Ocean Casino Resort vaulted 36% to $34.5 million. In the middle tier (i.e., Caesars Entertainment), the leader was Harrah’s Resort, nudging ahead 3% to $20.5 million. Tropicana Atlantic City wasn’t far behind at $19 million (flat) but Caesars Atlantic City slipped ignominiously to $17 million, down 7%.

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Case Bets

Ohio‘s gaming industry continues to experience woes. Former lottery director Pat McDonald claims to have resigned for reasons of health. Gov. Mike DeWine (R) cites “HR irregularities.” Either way, McDonald’s out abruptly. Top members of DeWine’s staff personally escorted him from the building. Now DeWine has to find a Mr. or Ms. FixIt and soon. For the time being aerospace specialist Michelle Gilchrist is the new occupant of the hot seat. We don’t envy her.

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Atlantic City blues

Atlantic City‘s first casino, Resorts Atlantic City, celebrated the 45th anniversary of legalized gambling on the Boardwalk in rather limp fashion. Highlights included a beachball drop and an appearance by Mayor Marty Small (D). Well, we suppose he’s got to do something besides be a sock puppet for Trenton. Small was accompanied by Atlantic City’s new resident celebrity, Kelsey Grammer, who was evidently “assistant mayor” for the occasion. Is being a Small sidekick that much of an honorific? To cap the festivities, Resorts rolled out … a tribute band?!?! Yes, it’s the New York Bee Gees, adding to the perception of the Boardwalk as an also-ran destination for entertainers.

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Illinois leaps, Indiana falls; Japan awakens; PointsBet blunder

Gambling revenues in Illinois were jolted 10% upward last month, hitting $131 million. This was driven by 15% greater visitation, customer spend being 4.5% lower. Most of the increase was driven by new product. Otherwise, the boost would have been only 4%. American Place improved markedly, reaching $7 million in its second month, putting it on par with Hard Rock Rockford ($6 million, +22.5%) but still trailing the rest of the Chicago market. Rivers Casino Des Plaines enjoyed a 9.5% bump to $48 million, while Grand Victoria slipped 6% to $13 million. Hollywood Joliet gained 10.5% to $8.5 million, Harrah’s Joliet slid 11% to $11 million and Hollywood Aurora was flat at $9 million. Full House Resorts seems to be executing on its Waukegan business plan to the extent of creating new gamblers, not so much at drawing business from outmoded rivals.

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