Hard by Planet Hollywood there’s a strip mall where you can get some egg rolls at Panda Express, satisfy a Big Mac Attack at McDonalds … and buy pre-rolled joints at the little boutique above. Legalized marijuana hasn’t infiltrated casinos yet, but it’s getting closer. (Addendum: Actually, it’s untruth-in-advertising. A source says Rey Las Vegas is just selling CBD product and the “Pre-rolls” is purely for show. Still, a sign of the changing times.)
“Foreign agent.” That’s who Steve Wynn is, according to the Justice Department, which is prepared to sue the disgraced casino mogul if he doesn’t register as an aegis of Red China‘s government. Seems that Steve was carrying water for the ChiComms during Donald Trump‘s administration. Specifically, he was leaning on the White House to extradite a certain Guo Wengui, who sought asylum in our great country back in 2014. The Chinese say Guo is wanted for bribery and sexual assault. And of course we can always take the Beijing government at its word. (*Cough*Wuhan*Cough*) Ultimately, in another chapter of the Trump/Wynn love-hate relationship, The Donald didn’t cede to Wynn’s pressure … perhaps because Guo is card-carrying member of the Mar-a-Lago country club. He’s also in Steve Bannon‘s Rolodex, which obviously didn’t hurt his cause.
According to Bloomberg, “Under the Foreign Agent Registration Act, passed in 1938, any person representing the interest of foreign entities in the U.S.—including governments—must disclose their relationship to the Justice Department. They also need to make public all of the activities they’ve done on their behalf and, if applicable, how much they were paid.” Hmmm … Steve Wynn do something untoward? Nah.
Continue reading Steve Wynn, international man of mystery
Last month Nevada raced ahead of 2019 gambling-revenue benchmarks, up 11% to just over $1 billion. Locals-derived winnings ($245 million) jumped 18%, despite operating at 80% capacity. (Locals casinos saw 15% higher slot win 18% greater handle and 35.5% more table win on 9% higher wagering—talk about luck being with the house.) Similarly confined were Las Vegas Strip casinos, which finally matched 2019 numbers with a $483.5 million performance. Strip slot revenue ($327 million) was up 19% on 16% more coin-in, while non-baccarat table win was down 10% on 3% less wagering. Baccarat remains a black hole, with winnings down 58% on 42% less wagering and low hold percentages. In other words, slots saved the day.
Continue reading Strip returns to form; Caesars nixes buffets, free play
Colorado closed out its first full year of sports betting with an April decline, presaging a summer slump that is likely to prevail until football season. Handle was $244.5 million, which left $10.5 million in revenue after promotional credits ($6.5 million) were deducted. “In U.S. sports betting, there isn’t any real substitute for the popularity of the NFL or the NCAA Tournament,” understated Play USA analyst Ian St. Clair. “But even with a monthly decline in wagering, Colorado continues to fare well compared with similarly sized states.” The only real loser in Colorado’s first year of sports wagering is the state tax collector, who only brought in $6.5 million (on $2.3 billion handle and $147 million gross receipts), which some warned may bring a second look from the guvmint. NBA wagering ($84 million) led the Rocky Mountain State in April, distantly followed by baseball ($48 million) “a total likely dampened by the struggles of the Colorado Rockies.” The Colorado Avalanche scared up $10.5 million in hockey wagers and table tennis was almost as popular—$9 million in handle. Just imagine what that latter number will be when the summer Olympics finally roll around.
Continue reading Case Bets
Let’s start with some good news. JP Morgan analyst Joseph Greff laid out a series of benchmarks for a Las Vegas comeback across the second half of 2021 (one year earlier than anticipated). “We think these data points are indicative of the strong and relatively quick inflection of demand on the LV Strip, with particular importance for group/convention business into the fall,” he wrote. While this rising tide should lift all boats, Greff picked MGM Resorts International and Caesars Entertainment to be particular beneficiaries, with Station Casinos and Boyd Gaming getting a lift off the back end.
For starters, airlines are coming back in a big way. Airlift capacity into Las Vegas is expected to be at 93% of 2019 levels by June and 97% by July, compared to a national average of 85% and 89% for those same months. And in September, when convention season starts in earnest, airlift is expected to be above 2019 levels. As for room rates, 3Q21 prices still lag 2018 by 8% but 6% higher on weekends. Caesars’ occupancy has already risen to 84% in March from on 72% in February and can be expected to keep moving the needle, with weekends sold out “for the foreseeable future.” As payrolls grow in other industries, discretionary income increases and unemployment continues to drop, the benefits trickle down to Boyd and Station.
Continue reading Caesars, MGM lead Vegas recovery; Florida compact dicey
If Sin City wasn’t chastened by the Coronavirus pandemic, it has certainly been cheapened by it. And not in a good way. Returning customers can expect to pay more for a diminished experience. Case in point, Caesars Entertainment. Not content to evict roughly a dozen four-wall shows (including sacred icon Wayne Newton), Caesars applied a kick to the posterior in the form of thousands of dollars in load-out charges. As Vital Vegas author Scott Roeben put it, “Insult, meet injury.” The impost was levied on Wednesday and (after it went over like a lead balloon), Caesars COO Anthony Carano lifted it on Friday. But the PR damage had been done. Caesars looked like a bunch of money-grubbing cutpurses. “ElDiablo” indeed!
Continue reading Welcome to Less Vegas, Part TwoAll Sheldon Adelson‘s horses and all Sheldon Adelson’s men couldn’t put Texas megaresorts together. Or, as they said in Brooklyn (in a non-gaming context), wait ’til next year. Two separate bills to authorize everything from full-service casinos to poker rooms died in committee without even getting so much as a vote. The late Adelson put all his eggs in the Texas GOP basket and the party failed to show much gratitude, as the dismal performance of gaming legislation evinces. At least the lower house’s version of the bill got a hearing. No such luck in the state Senate. Even had the Lege gotten its act together, the casino push was an uphill slog, facing an increasingly likely veto from Gov. Greg Abbott (R), never mind the need to obtain a two-thirds supermajority at the 2022 ballot box, had Abbott reversed field. Polling showed majority approval but fell well short of 66%.
Despite the Lege’s truly dismal performance, Las Vegas Sands‘ man in Austin, Andy Abboud, remained optimistic, blowing sunshine up solons’ asses. “We have said from the beginning that we’re committed to Texas for the long haul. We have made great strides this session and have enjoyed meeting with lawmakers about our vision for destination resorts and answering all the questions they have.” Given the short shrift he got from lawmakers, we’re not so sure about Abboud making any “great strides,” and the deployment of literally scores of lobbyists, led by Karen Rove, yielded so little progress that it has to be chalked up as a giant flop. Losers other than Sands included Golden Nugget owner Tilman Fertitta and several Native American tribes who would have qualified for Class III casinos. It’s difficult to scavenge much upside from this result and Abboud might want to think about making some friends on the Democratic side of the aisle. The Texas GOP is so casino-averse that Abboud was ultimately spitting into the wind.
Casino revenues in Louisiana enjoyed a big bounce last month, up 18% to $236 million, a substantial increase over 2019 levels. Mind you, that number was achieved without two casinos that were operational in 2019, Diamond Jacks and Isle Grand Palais. The former succumbed to Coronavirus shutdown, the latter to Hurricane Laura. All markets showed strength, especially Shreveport/Bossier City, so we will start there. Except for a 14% boost at Horseshoe Bossier City (pictured, $16 million), the increases were eye-popping. Margaritaville rocketed 56% to $20 million and Eldorado Shreveport vaulted 46% to $13 million. (Watch out, Horseshoe: You’re closer to third place than first.) Boomtown Bossier jumped 27% to $5.5 million and Harrah’s Horseshoe Downs hopped 52% to $5 million. Only Sam’s Town, flat at $6 million, got left out of the party.
New Orleans finally caught a break, with everybody revenue-positive except Treasure Chest (flat-chested at $9 million). Harrah’s New Orleans may have ‘only’ nudged up 7% but it led the market with $25 million, distantly followed by Boomtown New Orleans‘ $13 million (up 37.5%). Fair Grounds racino—one of the few tracks from which Bob Baffert has not been banned—leapt 31% to $4.5 million and Amelia Belle gained 12% to $4 million. In Baton Rouge it was pretty much the usual narrative. Belle of Baton Rouge sank 25.5% to $2 million, Hollywood Baton Rouge‘s $6.5 million was good for +9.5% and L’Auberge Baton Rouge ruled the roost with $18 million and a 35.5% gain. Outlying Evangeline Downs policed up $8.5 million, a climb of 27%.
Continue reading Louisiana advances, Pennsylvania recedes
Massachusetts almost reached 2019 levels, coming up 4% shy with an April gross of $84.5 million. The commonwealth’s three casinos did this despite having to operate at 40% of capacity (all capacity limits will be lifted May 29). Plainridge Park brought up the rear, down 11% with a gross of $12.5 million. MGM Springfield was flat, which is good news considering how it has struggled, posting $22 million win despite an unlucky month at the tables (-32.5%). Encore Boston Harbor (which wasn’t operational in early 2019) rang up $50 million, $29 million from slots and $21 million at the tables. Except for Wynn, JP Morgan analyst Joseph Greff still has gloomy forecasts for Plainridge and MGM Springfield this quarter, down 14% and 12% respectively. Encore is predicted to be boffo, +35%.
Slot addict and social influencer Brian Christopher has announced that he’s going to start boycotting casinos that permit smoking … 18 months from now. Or as Americans for Nonsmokers Rights put it “he will prioritize smokefree casinos.” (Does that make it a non-smokers’ non-story?) Christopher visits an average of 40 casinos a year, so he’s going to have to be pretty selective and more or less boycott Las Vegas. He’ll be in a particular quandary when it comes to the Plaza Hotel, which features a Christopher-branded slot lounge filled with his favorite games. Plaza CEO Jonathan Jossel told us, “We have nothing to add. It’s not something we are considering right now; however in his area it will go smoke-free on June 1.” So Christopher has already wielded some influence in Glitter Gulch after all.
Casinos in Atlantic City grossed $189.5 million last month, 9% behind their 2019 pace. Slots were off 5% and tables 17%. Regular top-grosser Borgata had a terrible month, falling 28%, spurring by lackluster table-game winnings (-34%), with slots tumbling 25%. The Caesars Entertainment threesome fared almost as poorly, sliding 20% as table win plunged 40% and slots were down 11%. Borgata’s $38.5 million gross put it within striking distance of hard-charging Hard Rock Atlantic City, which won 35% for a 51% leap in revenue. Also soaring was Ocean Casino, vaulting 45% to $22 million and elbowing aside Harrah’s Resort ($21 million, -24%) for third place. Caesars’ much-vaunted $400 million capex may not be enough to prevent a permanent change in the pecking order.
Caesars Atlantic City, despite its reputation for volatility, was a relatively stable -14.5%, grossing $19 million, while Tropicana Atlantic City closed out the portfolio, slipping 20% to $19 million. There was a surprise among the grind joints, with Resorts Atlantic City up a percentage point to $13 million. Little Golden Nugget won $11 million but that was a 29% plummet, while Bally’s Atlantic City also grossed $11 million, down 22.5%.
Continue reading Hard Rock, Ocean drub Borgata; Caesars massacres shows