Category: Casino News

Coming in slighty ahead of Wall Street‘s expectations, Caesars Entertainment delivered cash flow of $887 million in the first quarter. (The Street anticipated $883 million.) J.P. Morgan analyst Daniel Politzer attributed the beat to “modest upside,” both online and in vexed Las Vegas. Caesars’ bread and butter, its regional casinos, were merely in line with forecasts. And management was keeping mum on the possibility of a Tilman Ferttita takeover or an insider LBO.

In a coup that did not take Wall Street completely by surprise, Churchill Downs revealed last week that it had obtained the IP rights to the financially troubled Preakness Stakes. This gives CHDN control over two of the three legs of the Triple Crown. For $85 million, Churchill Downs gets the Preakness and Black-Eyed Susan Stakes, as well as 2% of handle therefrom. The state of Maryland remains in control of the track, in which it plans to invest $400 million. “In short, CHDN will generate fees from the Preakness and Pimlico under new state operation, with little formal operating influence, although, given the state’s intended investment of $400M to reposition the track, we expect CHDN to be involved,” summarized Jefferies Equity Research analyst David Katz, noting the obvious synergistic benefits to owning both the Kentucky Derby (which continues to prosper) and the Preakness.

Rumors of Atlantic City‘s imminent demise—mostly spread by Big Gaming itself—proved exaggerated last month. Casino revenues ticked up 2.5% to $236.5 million. Table play, up 14%, carried the Boardwalk, as slots won 1% less. And one less weekend day didn’t even hurt. Golden Nugget had a bad month, however, falling 13% into last place with $10 million. Volatile Caesars Atlantic City, by contrast, had a bully March, shooting up 17.5% to $19.5 million. Scarcely outdone was Borgata, vaulting 15% to $67 million. Some of that evidently came at the cost of Hard Rock Atlantic City, down 4% to $42.5 million. Ocean Casino Resort rounded out the top three with $35.5 million, up 2%.

First, the good news. That “inclusive pricing” strategy that the Las Vegas Strip filched from Downtown is working. The bad news is that it will probably be quickly abandoned, turning a promising recovery in Las Vegas into an anemic one, at best. Given all the misguided economic “policy” coming out of Washington, D.C., a nascent Vegas bounce-back could yet be smothered in the crib. It’s not like those fellows ever bankrupted a casino, is it? Oh, wait …

There’s a fundamental flaw to Las Vegas‘ “Soak the Rich, Screw the Poor” business model. Somebody has to fill that preponderant number of hotel rooms (over 154,660) and gambling positions (too many to count). And the “Epstein class” isn’t going to stay at Circus Circus. But there’s hope. Maybe it’s recognition of our K-shaped economy, so called for the widening gap between rich and poor it manifests. Or, more likely, it’s the one-two punch of customer discontent and adverse media coverage of things like $13 candy bars at MGM Grand. Either way, there are signs that Big Gaming is finally waking up to the repulsive, anti-value message that Sin City has latterly presented to the public.