David Mckee

Posted on July 22, 2022September 26, 2023 by David Mckee — Leave a comment

Louisiana plummets; Cool front disrupts summer gaming

A “cruel, cruel summer” for regional casinos was predicted by Truist Securities analyst Barry Jonas and it’s already arrived in Louisiana, where gambling revenues fell 10% last month. It’s not even keeping pace with go-go 2019 any longer. The statewide gross was $200 million, as visitation fell 8% and spending dipped 2%. Sports betting revenue was a miserable $11 million on handle of $132.5 million. Not much pent-up demand there. Hobbled by renovations, Harrah’s New Orleans fell 14.5% but still easily let its market with $21 million. Also revenue-negative in the Big Easy were Boomtown New Orleans ($11 million, -7.5%) and Treasure Chest ($8 million, -4.5%), while Fair Grounds racino was up 5% to $4 million. Up the river in Baton Rouge, new ownership at Belle of Baton Rouge inherited a property that Caesars Entertainment left at rock bottom ($1 million, -11%), while Hollywood Baton Rouge slid 18% to $5 million. L’Auberge Baton Rouge posted $16 million (-2.5%).

Posted on July 21, 2022September 18, 2023 by David Mckee — 1 Comment

“Standout” at Sands; Station challenges South Point

Despite attenuated revenues of $1.2 billion in the second quarter, Las Vegas Sands was the beneficiary of what one analyst termed “creeping expectations” on Wall Street. Or, as Deutsche Bank‘s Carlo Santarelli put, “we continue to believe LVS represents one of the more compelling medium- to longer-term risk-reward stories in our coverage universe.” How come? Managed expectations, in large part. Losses in Macao were not as bad as feared and Marina Bay Sands in Singapore (55% of the company’s equity now) is prompting higher forecasts, as the city-state loosens its Covid-19 restrictions. Regarding Macao, “management had little to say” but numbers were “soft” and the company expects to lose $110 million a month in cash flow and rents as long as the current shutdown persists.

Posted on July 20, 2022September 14, 2023 by David Mckee — Leave a comment

Two Atlantic City casinos to be struck; Pennsylvania’s fuzzy math

Unite-Here quickly ran out of patience with the Golden Nugget and Resorts Atlantic City. 97% of affected membership voted to authorize strikes at both the bottom-feeding casinos if a labor deal can’t be reached before August 1. That still gives both Nugget and Resorts management some wiggle room but it also indicates that talks are not going well. Although the exact nature of the grievance wasn’t specified, we’ll hazard a well-educated guess. The casinos are probably taking a page from the Carl Icahn playbook and demanding a preferential, lower, wage scale. That negotiating tactic bombed at Trump Taj Mahal and probably won’t play much better at the two holdouts, if they go to the wall. The union has made it crystal-clear that it won’t accept second-tier status for any of its employees at any casino in town.

Posted on July 18, 2022September 14, 2023 by David Mckee — 1 Comment

Atlantic City strong; Station’s demolition derby; De$anti$ hits jackpot; Mega-Jottings

There’s so much news today we almost don’t know where to begin. But we’ll start with Atlantic City, which reported a 2% increase in casino revenue, to $229 million. Internet gambling and sports betting chipped in another $169 million. One of the biggest beneficiaries was Bally’s Atlantic City (above), which leapt 20% to $13.5 million. Other coffee achievers were Ocean Casino Resort, which catapulted 29.5% to $30 million, and Hard Rock Atlantic City, scarcely to be outdone with a 26.5% increase to $44.5 million. Borgata actually lost market share (or was unlucky at the tables), down 4% to $54 million. Of the Caesars Entertainment threesome, only Tropicana Atlantic City was revenue-positive, up 1.5% to $21.5 million. Harrah’s Resort was 5.5% down to $20 million and Caesars Atlantic City, formerly the most volatile house in town, ceded just 4% to $19 million. Resorts Atlantic City was flat at $14 million and Golden Nugget nudged up 3.5% to a last-place $12.5 million. Overall, slot revenue climbed 11% to $171 million on 12% more coin-in, while tables saw 4% less win but on 7% less wagering.

Posted on July 15, 2022September 26, 2023 by David Mckee — 1 Comment

Atlantic City notes; MGM Singapore?; Mega-Jottings

Ocean Casino Resort has unveiled its pricey new sports book and our Atlantic City correspondent deems it nothing short of “spectacular! In the center is a circular bar, surrounded by TV screens. There is a set of steps (and elevator) to the Balcony Bar overlooking the main area. Borgata‘s sports book used to be number-one in being attractive. Not any longer.” Our man on the town stayed at Hard Rock Atlantic City and reports “it’s much nicer here at Hard Rock than Bally’s; here you can choose from four or five breakfast places that are open.” Meanwhile, all bets are off for the Golden Nugget and Resorts Atlantic City. They have until Tuesday to reach terms with Unite-Here and if they poor-mouth the union then pickets are a certainty.

Posted on July 14, 2022September 14, 2023 by David Mckee — 1 Comment

Insolvency in Macao; Sports betting everywhere

Prior to the current Covid-19 lockdown, casinos in Macao were already engaged in a $600 million/month cash burn, thanks to the China‘s zero-tolerance policy on the disease. That will only get worse now that access to customers has been shut off entirely, needless to say. Given the former and potential money-making puissance of Macao, the six operators have no chance but to hunker down and absorb the punishment, especially as they wait the six months before their licenses are renewed, as appears inevitable. (And why not?) “The sad part is that it’s going to be years until business comes back to where it used to be,” observed gaming pundit Alidad Tash. How many years remains to be seen but the smart money is on later rather than sooner.

Posted on July 13, 2022September 14, 2023 by David Mckee — 2 Comments

Bally’s Chicago stirs skepticism; Vegas locals cooling

It’s not just us who are leery of Bally’s Corp. and its ability to do something unprecedented in its history—swing a $1.7 billion casino in Chicago. The company’s corner-cutting “improvement” of Bally’s Atlantic City does not inspire confidence. Nor does a “negative” rating placed on Bally’s debt by both Fitch Ratings and Standard & Poor’s. As Crain’s Chicago Business explains, “That means that while no immediate credit downgrade has occurred, concern about the company’s finances is rising and a downgrade is a distinct possibility in the near future.” S&P cited potential difficulty in obtaining building permits, as well as inflationary pressures on the project cost: “In addition, the risks related to successfully ramping up the operations and cash flow generation of a greenfield project are high.”

Posted on July 12, 2022September 14, 2023 by David Mckee — Leave a comment

California Dems rebuff Big Gaming; Icahn irate; Mega-Jottings

California‘s Democratic Party has officially taken sides in the sports-betting ballot race and effectively come down on the side of a tribal/racetrack-driven initiative, going on the record as opposing a rival measure backed by most of the big names in online wagering. This is not entirely surprising. The Dems are going with a traditional source of support (Indian Country) and against what is, mainly, a group of carpetbaggers with relatively political clout out West. To split hairs, the California Democrats are not endorsing the tribal initiative, staking out an official stance of neutrality. But when they line up against Big Gaming’s alternative, we know darn well where their sympathies lie.

Posted on July 11, 2022September 26, 2023 by David Mckee — Leave a comment

Macao is closed; Mixed signals from the Midwest

Effective today, all casinos in Macao have closed, in governmental reaction to a spike in Covid-19 cases. “Only essential businesses like supermarkets, gas stations, and pharmacies will remain open.” In other words, just when you thought things couldn’t get any worse in Macao, they did. SJM‘s Grand Lisboa is the Covid hot spot, with 13 of the 71 newest cases being spotted in the pleasure palace. At the risk of sounding heartless, this latest turn of events exposes the danger of doing business at the sufferance of an authoritarian regime. Companies vulnerable to the effects of the shutdown include (in diminishing order) Las Vegas Sands, Wynn Resorts and MGM Resorts International. They may pass the pain on to their Macanese workers. When the Las Vegas Review-Journal asked if they would continue paying the idled—through no fault of their own—employees, all three firms clammed up.

Posted on July 8, 2022September 18, 2023 by David Mckee — 1 Comment

Ohio shows fatigue; Macao seizes hotels; Abe assassinated

Since it has been outperforming the broader U.S. market for some time now, perhaps we should not be unduly concerned that Ohio casino revenues are down for three months in a row. Indeed, compared to go-go 2019, they’re still arguably overheated, up 17%. Besides, there was simply so much money that Americans could gamble and lose, and inflationary pressures in non-discretionary areas of the pocketbook cannot be denied. But don’t hit the panic button.

Casinos and racinos in the Buckeye State grossed $189 million last month, 4% lower than the previous June. The pecking order remains pretty much the same, with racino MGM Northfield Park easily out front with $23.5 million (+2%), followed most closely by Jack Cleveland ($22 million, -5%). Hollywood Columbus tumbled 9% but hung onto third place with $21 million, while Hard Rock Cincinnati continues to prosper from its new brand, up 5.5% to $20.5 million. Rounding out the casinos was Hollywood Toledo and its $18 million (-5.5%).

Author: David Mckee