Category: Las Vegas Advisor

Posted on by — 5 Comments

F-blue returns from the grave; Caesars socks it to you

The Thing That Wouldn’t Die, aka Fontainebleau, is back again. Former owner Steven Witkoff has sold it to Koch Real Estate Investments for an undisclosed price. Considering that Witkoff bought it from Carl Icahn for $600 million and estimated that “The Drew” (as it was briefly called but never came to be) would cost in the neighborhood of $3 billion to finish, we’re looking at a very pricey megaresort project for Koch (as in Koch Brothers). The latter is in partnership with Fontainebleau Development so, yes, F-blue is a thing once more. Mind you, we’re talking about a casino-resort that’s been under construction for 14 freaking years (so old that Harry Reid was Senate Majority Leader when the original owners came cadging for a bailout). That $3 billion figure may have been optimistic.

Looking on the bright side, Koch trumpeted, “With Las Vegas‘s tourism recovery underway, the city has safely reopened to millions of visitors since June with even more success on the horizon.” Koch assures us that it practices “an agnostic approach to product, geography, and capital position,” which I guess is meant to assure us that this isn’t a leap of faith. As for Fontainebleau Development, it’s—oh no!—the return of the Soffer clan, the people who got us in this mess in the first place. Let’s hope their edifice complex is better-financed this time around. Even so, it may indeed take an act of God to make F-blue pencil out. As Scott Roeben emphasizes, it’s dumping—er, debuting—3,780 hotel rooms into a market that will be hard-pressed to absorb them, even a couple of years down the road. After all, F-blue is being beaten to the punch by not-unchallenged Resorts World Las Vegas. So there’s that. Even Resorts World fan Roeben is nervous about the latter’s prospects. “We suspect Koch will take a wait-and-see approach, sitting on this asset until market conditions improve, should that ever happen,” Roeben writes. Which means the butt-ugly corpse of F-blue is with us to stay for a long time.

Continue reading F-blue returns from the grave; Caesars socks it to you
Posted on by — Leave a comment

The Strip plays Capitol Hill

It was like the good old days of the Las Vegas Strip were back in full flower at President Biden’s inauguration. It featured two Strip headliners-in-limbo, Lady Gaga and Jennifer Lopez, as well as former headliner Garth Brooks, crossing party lines to deliver a moving “Amazing Grace.” Her Ladyship’s very personal rendition of “The Star-Spangled Banner” got the proceedings off to a rousing start and every performer gave hope of better times ahead for Sin City.

Continue reading The Strip plays Capitol Hill
Posted on by — 1 Comment

Massachusetts hit hard; NFL playoffs a tossup

Between Covid-19 capacity restrictions (33%) and statewide curfews (9:30 p.m., when the night owls are just getting rolling), Massachusetts casinos were between a rock and a hard place last month, with revenues falling 40% to a meager $50 million. If there was a silver lining for anybody, it was at Plainridge Park, whose slots collected an above-average win/slot/day of $247 and whose market share was 18%, closing the gap with MGM Springfield‘s 23%. Encore Boston Harbor remained dominant with 59%. Encore revenue plummeted 46% to $29 million, MGM made $11.5 million (-40%) and Plainridge Park won $9.5 million, only 10% off the pace on 10% less coin-in. (They must have some pretty loyal customers.) MGM saw 33% less slot handle (an anemic $118/win/slot/day) and a disastrous 60% plunge in table game revenue. Where JP Morgan analyst Joseph Greff had predicted a 15% decline in the fourth quarter, MGM delivered -34%.

At Encore, it was the opposite story. Greff expected a 50% 4Q20 decline and Encore managed -34%, a victory of sorts we suppose. Slot handle fell 29% and so did revenue from the one-armed bandits. Table game win was $2,972/table/day (contrast that to MGM’s $543). But even tightening the hold on the slots didn’t help that department. Plainridge Park is obviously doing things right, Encore somewhat the same but a serious rethink of MGM’s gaming product appears in order. Connecticut tribes who feared competition from Springfield can sleep easily at night.

Continue reading Massachusetts hit hard; NFL playoffs a tossup
Posted on by — 1 Comment

Slow news day

It’s nice to see that the Las Vegas Golden Knights are set to return to the ice … but with Covid-19 positivity rates in Nevada having just passed 21%, is this any time for companies like MGM Resorts International to be touting—or even contemplating—pool season? For that matter, why has Gov. Steve Sisolak (D) seemingly gone into hiding during this dumpster fire?

In other sports news, the Las Vegas Raiders were dealt the ultimate diss by Fox Sports, which didn’t even bother to post score updates on its ticker of the Silver and Black’s exceedingly narrow but meaningless win over the Denver Broncos, which enabled the Raiders to end the season at 8-8, salvaging pride but little else.