How the wheel of fortune has turned for MGM Resorts International. Where Macao was once the grand prize among its casino trophies, it is now an albatross around the company’s neck, provoking a guarded outlook from Fitch Ratings. But MGM’s Las Vegas and regional casinos made up for that and more. Fitch was not only impressed by MGM’s liquidity both in terms of cash in hand and credit lines, it also said U.S. casinos had “essentially fully recovered” and were helping MGM retire debt. “The strong performance in Las Vegas, both slots and table games, is offsetting lingering weakness from the international and convention segments, although the latter will come back more in earnest in 2022,” Fitch boffins wrote.
MGM’s regional properties will outdo 2019 both this year and the next, Fitch predicted, and Las Vegas should be fully recovered by 2023 (visitation still lags 2019 levels), a forecast “which may prove conservative, given current trends domestically.” The crystal ball was cloudier vis-a-vis Macao, both due to Covid-19 policies and the uncertainty of the concession-review process. Of the former, Fitch’s rating “reflects the potential for negative rating actions should there be signs that the recovery in visitation to Macau, particularly from Mainland China, and resultant gaming revenues are not materializing.”
At least CEO Bill Hornbuckle shouldn’t lose too much sleep over his casino concession: “Fitch views the possibility of incumbent concession holders failing to secure a new concession as low, though the risk should not be ignored. The operators have invested several billions of USD capital, are large local employers and critical government taxpayers, and have supported the local and Mainland government’s broader policy goals.” Furthermore, “procedure will take a pragmatic form and MGM China will continue operating in Macau in the long term.” That could include the exercising of a hitherto-obscure clause whereby Macao can extend casino licenses by five years before retendering them. Throw in the fact that MGM only derives 20% of its revenue from Macao (compared to Wynn Resorts‘ 75%) and Hornbuckle can feel pretty darn sanguine.
Skepticism continues to mount over the supposed crisis affecting Atlantic City casinos, especially given their stellar financial performance of late. Unite-Here local prexy Bill McDevitt tried to stir up panic by citing the unrelated fact that 20% of his constituents are still out of work. We’ve got plenty of independent confirmation that operators are deliberately running with as little staff as they dare—and not for fear of going out of business. Stockton University‘s Jane Bokunewicz wasn’t spooked. “It is difficult to assess the statement that four casinos would close because there is limited public information available about the impact on individual casino properties,” she told The Associated Press. “The proposed amendment to eliminate sports and online betting [from taxation] could help some casinos and hurt others,” she added.
One New Jersey newspaper wasn’t buying any of it. The Press of Atlantic City editorialized that the revision of PILOT fees was a rescue of a ship that isn’t sinking. It predicted that “most lawmakers and the public won’t see documentation of the need for some casinos to pay less tax.” Although Assemblyman Don Guardian (R) is predicting that one casino will close, the likeliest candidate is Resorts Atlantic City—which would get hit with the worst PILOT reassessment. We’d say “stop making sense” except that the Garden State Lege never started doing so.
Those rowdy realtors. While they were holding a convention at Harrah’s Resort in Atlantic City “a large brawl” broke out. Caesars Entertainment did a good job of keeping the story under wraps, as it only made it onto Philadelphia TV news two full days later. The fisticuffs are described as involving “dozens of suited-up men,” which must have been something to see. If you were peacefully dining at 3 a.m., your meal would have been rudely interrupted by the realty brouhaha: “At one point, a man in a light-colored suit jacket could be seen striking someone on the floor with a chair.” The eruption of violence followed several shindigs thrown by mortgage companies. Who knew refinancing could make people so pugnacious? Lots of people must have been feeling responsible, as nobody wished to sign a criminal complaint, not even the one guy who was taken to the hospital with injuries.
It’s another incidence of random, idiotic violence to which we are unfortunately becoming inured. Case in point: A Texas woman playing a black-market slot machine didn’t like how the one-armed bandit was treating her (the price you pay for engaging in unregulated, potentially illegal gambling), poured lighter fluid on it and set it afire. This didn’t sit well with another woman who wanted to play the device. The two ladies took their difference of views out into the parking lot, whereupon Woman B shot Woman A, not fatally. (There being no issue in today’s America too trivial to be settled with gunplay.)
Then there’s upstanding citizen William Brisco, who allegedly locked his four kids in the family car while he gambled at Delaware Park. Not only did the police have to free the four kids but Brisco had “suspected cocaine” and drug paraphernalia on him when he returned to the SUV and found the cops waiting. Looks like Brisco, who fled and was found hiding behind a copse of trees, had been consummating a drug deal at Delaware Park (a digital scale was among the aforementioned paraphernalia), which can now advertise itself as a great place to get high. But there are lower scum than Brisco. Consider Michael Anthony Hooks who left a baby alone and without air conditioning in his car in North Las Vegas in freaking July to gamble at Bighorn Casino. Fortunately, jails dispense rough justice to those who hurt children.
Patrick Mahomes toyed with the Las Vegas Raiders in a 48-9 humiliation of the Silver & Black, showing them up for the mirage some of us always suspected them to be. We predicted in our Twitter feed that the early 9.5-point spread might prove “conservative” and, boy, was it ever. The Raiders effectively lost the game on their first play from scrimmage, which Chiefs defenders ran back for a touchdown and the rout was on. Perhaps the Raiders’ prancing on the midfield K.C. logo before the game was not the best possible idea, especially for a 6-6 team … oh wait, make that 6-7. The Raiders are still theoretically in the playoff hunt, although theory looks more like delusion at this point. As the Las Vegas Review-Journal‘s Ed Graney succinctly put it today, “Blow it up.”
Jottings: Tilman Fertitta can’t decide whether to have his casino empire publicly traded or kept private. Last week he ended his quest to go public (again), a bit of indecision that cost him $33 million in exit fees … The long-dreamt-of “Carcieri fix” to widen the parameters of tribal eligibility for gaming is once again before the U.S. House of Representatives. As much as we like its chances there, the Senate is proving to be where legislation goes to die … Maryland Gov. Larry Hogan (R) is a man of faith. We know because he placed Maryland‘s first sports bet on a Washington Snyders/Baltimore Ravens meeting at the Super Bowl. Baltimore maybe (depending on Lamar Jackson‘s sprained ankle), Washington not so much … If you can’t beat ’em, join ’em. Pressured by Cambodian competition, the Parliament of Thailand has thrown together a 60-member “extraordinary committee” to study the legalization of casino gambling in that country … Has Jason Ader gone off his rocker? His vision for a New York City casino includes a landing pad for flying automobiles and a cryptocurrency exchange. Paging George Jetson … Still more bad news for Peninsula Pacific. Vehement voter rejection of its Slidell casino pitch means it is legally required to reopen Diamond Jacks in Bossier City (and re-staff it from scratch) within two months. Peninsula better move fast, having denuded Diamond Jacks of “everything from commercial kitchen and laundry equipment to flat-screen TVs and stage lights.”
Quote of the Day: “We had a lot of suitors, both gaming REITs and non-gaming REITs. We chose GLPI because they’re conservative, and we’re conservative. We studied their portfolio of leases, and it’s a very good lineup.”—Cordish Cos. Chairman David Cordish on why he sold three casinos to Gaming & Leisure Properties Inc. for $1.8 billion.