Fontainebleau Las Vegas‘ former owner and a fixture of S&G, Carl Icahn has been a naughty boy. The SEC caught him using his shares in Icahn Enterprises (IEP) to cover risky personal loans. Let’s leave aside the question of why someone as fabulously wealthy as Uncle Carl is supposed to be would need personal loans. How would you like to be an investor in IEP, only to learn that its namesake’s stock was mostly pledged to various (undisclosed) lenders? Caesars Entertainment, maybe you should check up on the status of all those CZR shares that Uncle Carl is supposed to be holding. Has he pledged them to any third parties who might come calling?
Although IEP would seem like the victimized party, it will have to pony up a $1.5 million fine, while Uncle Carl has to pay another $500K, which seems like getting off lightly. If he’s not good for the money, maybe he still has some F-blue furniture he can unload. Meanwhile, what could he be in hock for that would require pledging as much as 82% of his IEP stock (and never less than 51%) as collateral? What prospective IEP owner is waiting in the wings?
Sadly, the SEC does not clue us in on the dirty details of Uncle Carl’s financial faux pas. Mind you, it wasn’t the borrowing that got him in hot water but rather his unfathomable decision not to tell anyone. He failed to fill out the required paperwork, thereby leaving IEP investors (and federal regulators) in the dark. Like they say, it’s not the crime, it’s the cover-up that gets you. We guess the excuses “I forgot” and “The dog ate my homework” didn’t fly with the SEC.
It’s a sad comedown for the man who rescued the Stratosphere and both Arizona Charlie’s back in the day. He made a pretty penny off of Fontainebleau as well (would that once and current owner Jeffrey Soffer could say the same). But his magic touch eventually wore off, especially in Atlantic City, where he parlayed Trump Plaza into a vacant lot and ran Trump Maj Mahal into closure with his rule-or-ruin labor tactics. (Ruin prevailed.) It almost makes you want to pass the hat for Uncle Carl. Almost. (Thanks to S&G reader Eliza for the timely tip.)
All of the planned casinos in Virginia have opened. Except one. That’d be the one slated for Norfolk, which hasn’t even gotten out of the starting blocks—or indeed off the literal drawing board. Offering yet another set of redesigned renderings of its hoped-for casino, the Pamunkey Tribe downsized the project again. Above, is a now-inoperative design. The hotel has been cut back to 200 rooms. Still slated are a 935-car garage, “an outdoor pool and bar, a food hall with four or five restaurants, a sports bar, a steakhouse, a fitness center and a spa.” That’s pretty ambitious for a tribe that hasn’t done squat in five years except keep redrawing the renderings. However, the latest gambit may work: Solons are saying they’re “open” to giving the Pamunkey more years to get their act together. The city, which previously opposed a scaled-down project, has caved on the downsizing front too.
If Headwaters Resort & Casino ever gets off the ground (or, more to the point, obtains financing) it will be a Christmas miracle. It’s already long since ceded much of the area to Rivers Portsmouth, which skipped the slots-in-a-box temporary phase and opened a well-performing permanent casino. It’s unclear whether the Pamunkey will still try to cash in with a temporary but their previous plan, to build the resort in phases, got razzed and was withdrawn. Now they say they’ll build it all in one go, for a currently unspecified cost. (A former estimate of $100 million beggars credulity.) Why does this feel like they’re making it up as they go along?
Although casino revenues in Louisiana seemed to have fallen to the point where June numbers looked like a ‘dead cat’ bounce, we were wrong. July saw them go lower still, to $181 million. That’s 5.5% down from last year and 11% off the 2019 pace. The Pelican State is the one that the gambling recovery clearly forgot. Sports betting saw revenue of $23 million, thanks in large part to usurious (13.5%) hold, on handle of $172 million, which was a huge, 41% improvement from 2023. As for the poor brick-and-mortar performance, Hurricane Beryl is getting saddled with the blame and let’s hope it was indeed an aberrant July.
The brightest spot in the state was new Treasure Chest, vaulting 77% to $12.5 million. Other New Orleans casinos clawed back some of the business, with Boomtown New Orleans being only 5% off the pace for $8.5 million, while Harrah’s New Orleans actually gained a point, achieving $17.5 million. (Technical difficulties prevent giving a comprehensive set of numbers this month.) New competition continued to eat into L’Auberge Baton Rouge, which fell 14% to $12.5 million. If we’re skeptical of the Beryl explanation, it’s because good casinos continued to perform and losers still lost. Take for instance, Bossier City, where Margaritaville was flat but reigned supreme at $14 million while principal rival Horseshoe Bossier City plummeted 44% to $8.5 million. Lake Charles was probably led by usual player favorite Golden Nugget. We have to guesstimate, as Nugget numbers aren’t available but L’Auberge du Lac tumbled 14% to $23 million, Horseshoe Lake Charles had a good month, up 3% to $8 million and Delta Downs slid 10% to $13 million.
Nobody suffered last month in Massachusetts, where the weakest performance was to be flat. And that would describe both king of the hill Encore Boston Harbor ($61.5 million) and MGM Springfield ($23.5 million). The latter was never going to be the $50 million-a-month casino MGM Resorts International evidently imagined it would be. But it’s doing to well to throw out, as MGM has considered doing. And who needs tables at Plainridge Park, which hopped 4% to $14.5 million? It’s clearly benefiting from business lost by Bally’s Corp.’s flagship casino in Rhode Island. OSB handle of $405 million boiled down to $41.5 million in revenue, led by homeboys DraftKings with $21 million. FanDuel was next up with $13 million, followed by BetMGM ($3 million), Fanatics ($2 million), ESPN Bet ($1.5 million) and Caesars Sportsbook, which eked out a bare million.
Jottings: Genting Group, the mastermind behind Resorts World Las Vegas, is pedaling as fast as it can to stay ahead of the law. Nevada regulators have painted the casino as a renegade operation, knowing (but not caring) where some of its high rollers made their ill-gotten gains. Genting says it “looks forward to resolving the issues raised by the NGCB and continuing to ensure that business practices at Resorts World Las Vegas meet all regulatory and legal requirements,” which sounds suspiciously for a euphemism for ‘Please don’t fine us (much)’ … Veteran gaming executive Richard Schuetz, himself a recovering gambling addict, is souring on OSB and its much-reported potential for addictiveness. We’ve been derelict in covering the issue, in part because of the alarmism that surrounds it. But if OSB has lost Schuetz, it’s losing the plot.
check out the typo–it’s doing to well to throw out.