Category: Casino News

So we leave on vacation (I checked into the Westin O’Hare and didn’t leave the building for three and half days) and all hell breaks loose in Big Gaming. The breaking story was MGM Resorts International‘s decision to shuck Gold Strike Tunica. It’s unloading a non-core property to the fast-expanding Cherokee Nation Entertainment. The fact that the Cherokee got 1,100 hotel rooms and a casino for a below-average 6X cash flow speaks for itself. Vici Properties remains the landlord and will collect $40 million a year from Cherokee Entertainment. MGM collects $350 million in cash, net, money it will hopefully not sink into the Osaka pit. The transaction is expected to take a year to close.

Although 2022 is still shaping up as a better year than 2019 for the industry, the post-pandemic recovery is definitely cooling. Indiana came out of May down 4% from last year, booking $212 million in revenue. With $36 million, Hard Rock Northern Indiana was the clear winner, besting nearby Horseshoe Hammond, falling a precipitous 24% to $29 million, and Ameristar East Chicago, plunging 34% to $17.5 million. Over to the east, Blue Chip was relatively unruffled, off 3.5% to $12 million. Elsewhere in the state, Hollywood Lawrenceburg was flat at $14.5 million and everyone else was down except Bally’s Evansville, up 7% to $14.5 million. Horseshoe Indianapolis banked $29 million, off 4.5%, and Harrah’s Hoosier Downs was down 1% to $21 million, both of them making up for the leakage up in Hammond.

Our East Coast correspondent visited Bally’s Atlantic City to check out its revisions and we’ll let his photos tell the story:

Atlantic City gambling halls like Ocean Casino Resort (pictured) may get a summer’s reprieve from a smoking ban, as the New Jersey legislative session winds down without resolution on the contentious issue. Even if both chambers were to vote by June 30, there’s a good chance that the legislation would contain a grace period to soften the blow. A pre-Labor Day ban seems out of the question. The bill in question is creeping toward majority support with 16 state senators and 35 assemblymen having co-sponsored it. “Passing this legislation is the least we can do for frontline casino employees who worked throughout the pandemic, keeping our already struggling gaming industry open for business during some of the bleakest moments over the last couple of years,” said Assemblyman William Spearman (D), one of the newest signatories.

With a mealy-mouthedness that is becoming all too familiar, Atlantic City casino operators took advantage of the Covid-19 pandemic to plead poverty, warning of “grave danger” to their businesses unless they got tax cuts yesterday. One of their arguments was they were losing business to Internet gambling (largely operated by themselves). But hey, it worked. Gov. Phil Murphy (D) told the Lege to give the casinos what they wanted—and it did. According to a new Pro Publica report, “under the changes, companies will collectively pay … $55 million less than they otherwise would have this year—cuts that will disproportionately impact Atlantic City, the distressed capital of the state’s gaming industry.”

Liar, liar, pants on fire. That’s what we say to Atlantic City casino executives who predict the coming of the Apocalypse is smoking is banned in their premises. First-quarter gross operating profits were up even by pre-pandemic standards, which hardly makes it sound as though the sky is about to fall. GOPs were 63% over last year and 79% higher than 2019. The downside is that the prosperity was largely confined to four casinos, three usual suspects (Borgata, Hard Rock Atlantic City and Ocean Casino Resort) and one overachiever (Tropicana Atlantic City). Everybody else posted lower GOPs than in 1Q19. And Bally’s Atlantic City recorded a modest loss—$8.5 million—in 1Q22. Borgata pocketed $46 million, Hard Rock made $27 million, Ocean bagged $5.5 million while Tropicana took home $20 million. (Ocean had the highest hotel occupancy, 81.5%, while Golden Nugget brought up the rear at 41.5%. That’s a lot of empty rooms. If you want a cheap room, try Resorts Atlantic City‘s average $106/night, while Ocean’s $209/night is the priciest.)