Category: Casino News

We Americans sure do love us some gambling. Maryland‘s July numbers just came in and it’s 20.5% (!) ahead of 2019. Casinos won $180 million and two extra weekend days obviously helped the tally. MGM National Harbor led with $72 million (+19%), outpacing Deutsche Bank analyst Carlo Santarelli‘s $64.5 million forecast. Maryland Live locked up a 35% market share and $63 million in winnings, up 28%. Penn National Gaming was just in time in reacquiring Hollywood Perryville on July 1, $9 million gross was a 34.5% improvement on two years ago. Ocean Downs leapt 28% to $10.5 million and Rocky Gap Resort‘s $6 million was a 22% gain. And in what has to be a triumph for Horseshoe Baltimore, it was flat with 2019, grossing $19 million. So there’s some hope for it yet. West Virginia casinos nudged 5% above 2019 numbers, driven by a 34% increase in table win. Hollywood Charles Town was up 7%, 1% higher at the slots and vaulting 42% at the tables.

Penn had Wall Street analysts eating out its hand after the latest earnings call. “Memes [and] grandiose proclamations run wild” wrote Santarelli. “Well, this one was interesting. Between the call commentary, 95% of which was focused on a business that, as we have said for some time, will likely never amount to more than 20% of total Company [cash flow], if it is wildly successful, the social media promotion that began immediately, and the post call livestream ‘pumpapalooza’, PENN threw all it had at the retail investment community to promote a transaction, which, in our view, speaks to exactly what we have been saying for some time, the sports, and especially iCasino, strategies aren’t working.” You see, Penn used the quarterly earnings announcement to hype its acquisition of OSB provider TheScore. “We get that PENN needed a tech stack, but buying a media Company for a tech stack, knowing the challenges peers have had buying tech companies with sports betting tech stacks, seems a bit strange, and frankly, risky. We also get that buying a Canada based company, which has billed itself as a presumptive leader in provincial sports betting, once legalized, seemingly makes sense, but if we have learned any lessons from the US market, the willingness to spend and lose is the path to market share gains, more so than media presence.”

Continue reading Maryland goes, goes, goes; Penn flips out; SEC scrutinizing DraftKings

In a deal that Nevada regulators would block if they had an ounce of spine, MGM Growth Properties proposes to sell itself to Vici Properties, which would put nearly all the prime land on the Las Vegas Strip under one owner. Vici already owns most Caesars-branded properties on the Strip and is on the verge of adding The Venetian and Palazzo. It was, as Deutsche Bank analyst Carlo Santarelli put it with delicious understatement, “a deal with far-reaching implications.” The price tag is a whopping $17.2 billion, paid in a mix of cash and stock. Of that, $5.7 billion is debt already carried by MGP. Adds Santarelli, “the true driver of M&A in the [REIT] sector was cost of capital, and with VICI having traded at a healthy equity premium to the group for some time, with access to inexpensive debt financing, the transaction makes both intuitive and financial sense.” Still, $17.2 billion is a not-inconsiderable amount of debt, however low your interest payments may be (3.75% in this case).

“In 2016 we started on our journey to become asset light and this announcement, together with our recently announced Springfield and CityCenter transactions, reflects the culmination of those efforts and a major step forward in simplifying our corporate structure,” said CEO Bill Hornbuckle. “As a result of these actions, we are well positioned and remain focused on pursuing growth opportunities in our core business, with significant financial flexibility to continue to deploy capital to maximize shareholder value.” In a goodbye note to MGM, MGP Chairman Paul Salem wrote, “We are thankful to the MGP management team for all of their efforts to develop MGP into a premier gaming REIT.” “We have always admired the exceptional quality of MGP’s real estate portfolio,” added Vici CEO Ed Pitoniak, unable to conceal his glee.

Continue reading Monster monopoly on the Strip?; Caesars wows Wall Street

Mincing few words, MGM Resorts International CEO Bill Hornbuckle sent a letter to all employees, urging them to quit dithering and get their Covid-19 vaccinations, if they haven’t already. He pleaded, “In addition to the heart-wrenching thought of more illness and death, I fear that progressively more restrictive measures, including a return to social distancing and capacity restrictions, could be around the corner if we continue on this path. This would be a significant blow to our community, industry, and economy.” Clark County‘s current vaccination rate currently stands as a dismal 44%. The county is reliably “blue” territory, so this crisis goes beyond political chumming of the anti-vaxxer waters. Playing to his audience’s wallets, Hornbuckle warned that, as Las Vegas‘ health goes, so does its economy. If Coronavirus worsens and scares tourists away, furloughs and layoffs could follow. He wrote, “After the pain endured by so many these past 16 months–and the tremendous progress made in 2021–I can think of no more damaging scenario for us as a community.”

We think that Hornbuckle and others in like positions in Big Gaming are stopping one step short and need to mandate vaccination for their workers. If little outfits like Google, Facebook, Twitter, Netflix, Lyft, Morgan Stanley, Saks Fifth Avenue, The Washington Post, Ascension Health and BlackRock can do it, MGM can. We know you’re feeling cabin fever and ‘pandemic fatigue’ out there, America. We feel your pain. It would be great if events ran in a bright, linear fashion. But this is a war, a once-in-a-century calamity and, had we been so easily discouraged in the 1940s, the Axis powers would have won World War II (gladdening the heart of Imperial Palace founder Ralph Engelstad).

Continue reading Masks back on, Las Vegas!; All’s right with the REITs

At the risk of flogging a deceased equine, the emperor at Caesars Entertainment has yet again showed himself to be without clothes. The latest Eldorado-ization of the Roman Empire is the wholesale slaughter of table games along the Las Vegas Strip. As Vital Vegas reported over the weekend, “entire swaths” of the games have disappeared from casino floors, leaving blank patches to be filled in with slot machines or that dreaded new idol of casino executives, electronic table games. Just think of all the high-salaried dealers you can pink-slip! As Scott Roeben wrote to us, it’s “a really big shift that was happening under our noses.” We should have known, perhaps. Caesars execs had been promising to run a post-pandemic company at pandemic-era cost levels, which would require some real creativity. Enter the robo-games and the conversion of properties like Caesars Palace and The Cromwell into giant slot parlors.

Not only do ETGs cost less than old-fashioned table games, they offer lower minimums (and table minimums along the Strip have gotten pretty steep). It’s a shameless play for the low-roller clientele and another symptom of “Less Vegas,” the post-Covid environment in which the casinos make money by offering a diminished experience for the same—or sometimes higher—price. Certainly in Caesars’ case it bespeaks a contempt for the player, providing a regional-casino atmosphere in what was supposed to be the Holy See of gambling. It’s the latest in a death of the Roman Empire by a thousand cuts: short-poured liquor, closed buffets, shuttered shows and defunct player lounges. Roeben gloomily writes, “As there’s unlikely to be a new wave of demand for table games, expect this to be the new normal in Las Vegas casinos.”

Continue reading Caesars massacres table games, renames Superdome; Bally’s boffo

Shares of Las Vegas Sands traded down yesterday after the company missed its second-quarter estimates. Wall Street expected cash flow of $290.5 million and LVS delivered $244 million, a significant shortfall. (Mind you, Sands no longer reports earnings from Venelazzo.) Revenue overall was $1.17 billion, not the expected $1.37 billion. Sands execs blew sunshine up Wall Street’s keister, predicting better Macao business in the third and fourth quarters, albeit conceding that Singapore was harder to predict. Due to Marina Bay Sands-derived Coronavirus cases, the megaresort is closed from today through August 5. As for LVS’ new focus on i-gaming, the company is thinking small, planning to act as a supplier to other online companies and make minor purchases. Or, as President Patrick Dumont wisely put it, “I don’t think we’re going to buy our way into a business.”

Back on terra firma, CEO Rob Goldstein is still in denial about Texas after the company’s stunning rejection there, while continuing to ramp up ($17 million and counting) a ballot drive in Florida to permit new resort casinos. The company is concentrating on the gaming-averse northern part of the Sunshine State, going out of its way not to antagonize the powerful and well-heeled Seminole Tribe.

Continue reading LV Sands overpromises, underdeliver; Court to Station: Unionize!