In another sign of a faster-than-expected Las Vegas comeback, room rates on the Strip for the May 23-29 period are reported to be flat with 2019. Midweek numbers are mildly down (-17%) but counterbalanced by higher weekend rates (+18%) than two years ago. This is a big achievement and a rapid one. Only Wynncore is missing out on the bounty, -2% weekdays but -45% on the weekend. MGM Resorts International is just 2% off the midweek pace and +22% on weekends. Caesars Entertainment is down 36% weekdays but 28% higher on the weekend, while Venelazzo is not feeling the midweek love (-27%) but rebounding +63% on weekends. The midweek numbers at MGM and Wynn may have been goosed by the fact that there’s finally a convention in town but it looks like the window may have closed in Sin City for travelers seeking a room-rate bargain.
Vital Vegas is doubling down on its insistence that the Palms Casino Resort has been sold to the San Manuel Tribe, despite an absence of confirmation from either Station Casinos or the analyst boys on Wall Street. A sale would be a plus for Station investors, as it would remove a dead weight from Station’s balance sheet, provide a one-time cash infusion and accelerate the company’s refocus on what it does best: build quality locals casinos. (Will Durango Station ever be constructed?) Scott Roeben reports that the San Manuel got the Palms for $660 million, which wouldn’t even cover the $690 million Station put into renovating the place, although it would recoup the $312.5 million purchase price. So, capex aside, the Palms is now worth considerably more than when Station got it for a fire-sale markdown. That’s the glass half-full perspective.
Speaking of positive Las Vegas auguries, Vici Properties is feeling Vici-cated by MGM/Dubai World‘s sale of two CityCenter acres to Brett Torino for $80 million, sensing it justifies their faith in the Las Vegas Strip. Vici spent $6.25 billion to acquire Venelazzo and is coveting 23 acres of fallow land behind every Caesars Entertainment Strip property not named Caesars Palace, in addition to 27 acres it already owns. “I’m not sure if we’re going to be buyers or sellers,” equivocated Vici prexy John Payne. The $40 million/acre paid by Torino eclipses the previous record, $33 million/acre for what was supposed to become the Plaza meta resort (pictured) and became … nothing. Vici CEO Ed Pitoniak shared Payne’s enthusiasm, saying, “We believe U.S. gaming, after showing its resilience as a consumer leisure sector throughout the worst periods of the Covid-19 pandemic, will demonstrate continuing leadership as America fully reopens from the crisis.”
Another East Coast newspaper has joined the anti-smoking fusillade. The Times-News in Pennsylvania is throwing its op-ed weight behind a ban on casino smoking led by state Rep. Dan Frankel (D). It would segregate smoking to a secluded area away from the gaming floor. This would shut a loophole in the Keystone State’s 2008 smoking ban, which excepts casinos, cigar bars (naturally) and private clubs. Railed the column, “Even before the pandemic, 20 states had no-smoking bans in place, and, for the most part, they have succeeded financially. Along with Pennsylvania and New Jersey, Michigan has enacted a temporary ban during the pandemic. In all, about 1,100 casinos nationwide are smoke-free, even pre-pandemic, so to argue that it cannot be done in Pennsylvania and New Jersey is disingenuous.” We are increasingly inclined to agree.
Sports betting finally yielded tax revenue for the state of Virginia last month, as operators recorded positive adjusted gross revenue. Handle was $304 million, from which $26.5 million in revenue was derived. After promotional outlays, that number was $14 million. WynnBet arrived on the scene last month, to be joined by UniBet this month. Obviously, the NCAA Tournament boosted action—although punters were forbidden to wager on any of the five Virginia teams in the big dance. Observed PlayUSA analyst Dustin Gouker, “Virginia’s market is in such a healthy position for such a young market … with such a solid foundation in place, Virginia’s market should easily be able to withstand future challenges, including future competition from a neighboring state like Maryland.”
How did Hard Rock International spend $500 million reinventing Trump Taj Mahal not yet not put flat-screen TVs in every room? That’s an oversight Hard Rock Atlantic City is promising to correct as part of a new, $20 million capex campaign. The bulk of the money will go into redesigning 25 Roxy Suites and 66 Celebrity Suites. Other monies will go toward adding Asian-oriented slots and table games, as well as a Starbucks and a new, unspecified restaurant. Embracing the newly upgraded beach (thanks, Army Corps of Engineers), Hard Rock will put out 1,000 deck chairs and eight restrooms.
Our Atlantic City correspondent kudos Hard Rock this week, after a Sunday visit: “Got there just in time for the 4 p.m. open of their Legends Lounge. So glad, their food was both better and fresher than MGM’s Borgata lounge. One of their dessert choices is shown with a very good presentation, not just a few cookies on a plate like MGM. The cup in the upper left is the ice cream; at Borgata we were previously told ‘no ice cream, freezer was taken away.’ Borgata’s no-ice-cream [problem is] easily solved as both Home Depot and Lowe’s sell freezers.”
Previously, our spy checked out the Golden Nugget, which “was crowded, half-hour wait to get into their Chairman’s Lounge for dinner. Good food, slow service, won $130.” Not a bad night overall. “Saturday was Harrah’s Philadelphia at Chester to watch the harness races and later the Kentucky Derby on TV screens. I don’t remember seeing so many people in Chester before. The photo shows only a small portion of the crowd. Won a little on slots, lost a little on the horses. Overall was a $2 loss.” Again, not bad. We’ve had worse days at the track.
Jottings: There’s been another Coronavirus death in Singapore, part of a new cluster in cases, the first in two months. What’s this got to do with casinos? It’s reported that a resurgence of Covid-19 is “potentially threatening efforts to open up a long-awaited travel bubble with Hong Kong and host major upcoming summits including the World Economic Forum and Shangri-la Dialogue.” You don’t want to hear that if you’re Marina Bay Sands. Capacity at attractions like Resorts World Sentosa has already been restricted … Earth Wind & Fire will play The Venetian Nov. 10-20. Tickets go on sale May 7 at 10 a.m., Vegas time … WynnBet went live in Tennessee on Friday, its sixth territory. The online-only service will be promoted with a touring bus to host special events around the state … If you think American casinos were hit hard by Coronavirus, look at Europe. It’s been knocked to the canvas and still hasn’t gotten up … No more gambling in Saipan: Sole operator Imperial Pacific International has had its license pulled. At issue are links with junketeers from China … More bad news for Crown Resorts. It’s been hit with a $780,000 fine in Melbourne … Finally a casino operator has balked at a too-high tax rate. MGM Resorts International CEO Bill Hornbuckle is saying ‘no’ to Chicago, citing concerns with the selection process and, yes, the steep taxation. The odds on Wynn Resorts or Hard Rock International just got a lot better.
Glad Hard Rock AC is pumping some more capital into the place. I too was taken back about the TVs! I also read that the indoor pool will get some much needed cap ex where it just got a fresh coat of paint with the conversion. The pool and some other places in the hotel still feel like the Taj. Hopefully HRH touches it all!