Baccarat. That was April’s magic word for the Las Vegas Strip, as revenues from the volatile game kept Strip casinos out of the crapper. Baccarat winnings (or losses, if you were a high roller) soared 41% to $108 million on 17% more wagering. That helped mask some very worrisome data as the Strip sagged 3%, its eighth down month out of the last nine.
How bad could it be? Well, table winnings plunged 16% to $151 million, despite 1.5% more betting. Slots saw 2% more coin-in but won 5% less ($387.5 million). Lady Luck was definitely with the players last month. Locals casinos fared decidedly better, up 3% overall. Strip casinos took in $647 million (-3%), whilst Downtown gained a point to $83.5 million. The Durango Resort effect continues to wane, as miscellaneous Clark County casinos were flat at $164 million. But both North Las Vegas ($25 million, +4%) and the Boulder Strip ($90 million, +8%) notched major gains. With Fiesta Rancho, Fiesta Henderson and Texas Station long gone and Eastside Cannery to be decommissioned, the locals market can be well and truly said to have rightsized since Covid-19 slammed it.
Drive-in markets sent mixed signals. Business from Utah was robust, as both Mesquite ($18 million, +6.5%) and Wendover ($22 million, +10%) could testify. But what to make of declivities in both Laughlin ($40 million, -7.5%) and Lake Tahoe ($16.5 million, -7.5%), two drive-in markets that suffered? Customers spurned Lake Tahoe for Reno, which surged 9% to $64.5 million, while nearby Sparks sputtered 9.5% to $12.5 million. Nevada was flat overall, for a grand total of $1.2 billion.
Congratulations, Las Vegas Sands. The increasingly maladroit company finds itself with a white elephant on its hands in the form of the Nassau Coliseum on Long Island. The phone hasn’t been ringing in CEO Clark Dumont‘s office since Sands pulled the plug on its New York City megaresort bid. Of the few companies that haven’t already committed to the Five Boroughs casino race, none has shown the stomach to rush in where Sands fears to tread. This means that Sands finds itself the long-term owner of the Coliseum and forced to develop a strategy for a casino-less future there. Ya think Sands maybe should have had a successor in place before springing its ‘strategic redeployment’ on an unsuspecting Wall Street?
Another ‘whoops’ moment occurred when Sands disclosed that, due to environmental issues, the prospective cost of redeveloping the area into a big-ass pleasure palace had ballooned from $4 billion to $7.6 billion. That would rule out a lot of potential suitors—of which there aren’t many—like Penn Entertainment and Boyd Gaming. Not that either company has evinced the slightest interest in Gotham. Meanwhile, Nassau County Executive Bruce Blakeman (R) has been reduced to making calls to Red China and (we kid you not) Albania in an effort to drum up a replacement developer. Melco New York City? SJM Nassau? Not gonna happen, Bruce.
Tot up the $400 million or so that Sands has wasted on this once-promising venture and throw in the fruitless costs of lobbying the Texas Lege, and LVS shareholders will be looking at some massive writeoffs. Maybe Dumont can dazzle them with even more stock buybacks. In any event, Sands looks like a company that has lost its way. In other news, Steve Cohen‘s Citi Field casino project (in tandem with Hard Rock International) leapt a major hurdle when the New York State Senate approved rezoning for it. “Sands Nassau” has yet to be rezoned. It’s theoretically still early in the game but Cohen looks like the winner … and Sands the biggest loser.
Quote of the Day: “The major effect of the tariffs was the fact that the administration was putting them on, taking them off, changing the size, raising and lowering them and making special deals. That uncertainty is playing havoc with the markets.”—Stephen Miller, economist at the University of Nevada-Las Vegas, on the difficulty of forecasting Las Vegas‘ future.