Category: Las Vegas Advisor

Online sports betting has evidently proven too rich for Wynn Resorts‘ blood. The New York Post reports that Wynn “is looking to unload its online sports-betting business at a steep discount as the fledgling niche faces painful losses from stiff taxes and costly promotions needed to lure customers.” Wynn Interactive, valued at $3.2 billion, is being peddled for $500 million. This will come as bad news to Shaquille O’Neal, who unloaded his share of the Sacramento Kings in return for becoming a “brand ambassador” for Wynn, which also built a ritzy Las Vegas broadcasting studio to showcase its product. There were rumblings from the top that Wynn and OSB were an uncomfortable fit. CEO Matt Maddox had told investors, “The market is really not sustainable right now. Competitors are spending too much to get customers. And the economics are just not something that we’re going to participate in.”

Resorts World Las Vegas, we’ll see your Celine Dion health-scare postponement and raise you an Adele cancellation at Caesars Palace. The British megastar’s team has, like so much of the human race, contracted Covid-19 and is not physically capable of grinding out a Vegas residency at this point. We wish them a speedy recovery—and a contract extension. There are skeptics about the matter, asserting that the show simply wasn’t ready and that there would have been empty seats galore (we blame the greedy secondary market). Indeed, nixing 13 weekends of shows on account of Covid-19 seems an extreme reaction. Did Caesars Entertainment rush this show to market to one-up Resorts World? It kinda looks that way. Tickets sellers seem to have sensed this, judging from a precipitate, last-minute drop in prices.

On the “george” side of the ledger we find Bally’s Atlantic City, which is offering room rates starting at $29/night through February 28, albeit on “select nights.” Hey, it’s a terrific way to raise awareness of the new-look Bally’s. As for the Stiff of the Week, the winner is Borgata. Let our Atlantic City correspondent tell it: “MGM Borgata is getting cheaper by the day. [My wife] has reservations for a Christmas show this Wednesday night, but we now have a family night out scheduled. When she called MGM yesterday, she was told next week was ‘fully booked’ for comp tickets, and the host she spoke with told her to contact Ticketmaster to buy her own tickets. With 75,000++ tier points (my estimate is somewhere between $7 to $9 per point). She told the host the tickets were only $12 each (seems like a ‘high quality’ show), and she already had tickets for this week. Didn’t matter to them (she doesn’t have any assigned host at MGM).” Bad Borgata!

The City of Chicago unveiled the applications for its casino license late Friday, effectively burying it at the end of a news cycle, in another triumph for Mayor Lori Lightfoot (D) and her administration. The five submissions “are in line with our vision to develop a world-class experience in Chicago that will drive significant economic growth and employment opportunities for our communities,” said Lightfoot. The pitches break down alphabetically as follows:

Bally’s Corp. #1: To be sited at the Chicago Tribune Publishing Center, “an economic sleeping giant,” this $1.8 billion, two-phase project would include 100 hotel suites, 20,000 square feet of expo space, three restaurants—curated by Paul Kahan and Erick Williams—and rooftop “green space.” The casino would feature 95 table games and 2,700 slots. A “Best of Chicago” theme is planned. In a dig at its rivals, Bally’s wrote, “As our flagship property, Bally’s Chicago has no conflicting interest in the Chicago market. We don’t operate, own or partially own casino properties located elsewhere within the Chicagoland market. Simply put, Bally’s is conflict-free.” Even so, the company noted that it is already licensed in the Prairie State. Bally’s predicts a 20% ROI on the project (and if it doesn’t reach it, won’t build Phase II), which will have 25% Black and Latino ownership. This plan really needs to pencil out economically, as most of the amenities are in the second stage.

Wall Street analysts were frankly underwhelmed by Las Vegas Sands‘ third quarter. Now that the company is wholly reliant upon the afflicted Macao and Singapore markets that’s hardly surprising. JP Morgan analyst Joseph Greff was pretty blunt, calling Macanese cash flow “barely positive in September,” swinging from a negative August, while characterizing Marina Bay Sands as a “locals” casino these days. (Ouch!) At least Singapore shows signs of easing up on international travel. “In terms of when travel mobility between Mainland China and Macau eases, there is no visibility on when this occurs, given China’s seemingly zero COVID-19 case tolerance; our best sense is that the earliest this takes place is sometime after the Beijing Olympics in February.” It does not help that the Macanese vaccination rate is an unimpressive 50%. At least there were no signs of new regulations upon Macao’s casinos, which is some comfort.

Investment in digital gaming “will likely be small” at least until Pacific Rim cash flow improves. Ditto share repurchases. Sands has $5.6 billion worth of powder that it’s keeping dry. The future, as Greff sees it, is one of sequential improvements “but not a heroic one.” That means mass-market gaming reaching only 60% of 2019 levels next year and VIP play an anemic 35%. By 2023, mass play should be back to 95% of normal but VIPs will still be lagging at half their pre-pandemic level, further validation of Sands’ mass-market strategy.