Las Vegas Advisor

Posted on November 9, 2022September 14, 2023 by David Mckee — 1 Comment

Election Special: Gaming, tribes lose big

Although only 41% of all precincts have reported, it’s clear that both tribal and private-sector gaming suffered a stunning defeat in California last night. Both the tribes’ Proposition 26 and Big Gaming’s Proposition 27 are losing—and by wider margins than expected. 70% of Californians voted “no” on Prop 26 and 83% nixed Prop 27. The only clear winners in this scenario are the Golden State’s card rooms, which surely would have been litigated out of existence had Prop 26 passed (due to some fine print in the ballot measure).

Prop 27’s backers are now spinning that this was just a dry run for 2024. Before anybody files another ballot initiative, we urge both sides to come to the table and try to hammer out their differences. This would include A) tribal-private partnerships, B) a lower cost of entry, unlike Prop 27’s minimum of $10 million, C) a reasonable tax rate such as Prop 26’s 10% and D) no more dissembling about what your proposition is about, like ending homelessness. It’s about sports betting—and voters saw clear through you. Oh, and ixnay the hundreds of millions of dollars in attack ads; it’s a surefire path to defeat.

In other news …

Posted on November 8, 2022August 24, 2023 by Bob Dancer — 8 Comments

Comparing Two Different Games at Dotty’s — Part One of Two

Today I’m going to discuss a play that is of limited interest to most of my readers. It includes, however, a “how did I figure it out” discussion that could be useful to many of you.

Long-time readers of mine know I sometimes play at Dotty’s. Dotty’s has numerous (more than 100) locations in Nevada which are mostly 15-machine locations. It does have a few full-blown casinos with several hundred machines each, and at least one intermediate-sized location (at Sunset and Green Valley Parkway) with about 50 machines in it.

Posted on November 8, 2022 by David Mckee — 2 Comments

Bread and circuses

Christians throw themselves to this lion.

Inflation or no, there is one quantifiable, incontestable fact about the American consumer. He or she is spending more—way more—on gambling than before Covid-19 and more than last year, when they had stimulus money to burn. So if there are fewer presents under the Christmas tree, maybe the economy isn’t to blame. Big Gaming’s poster child for its current prosperity has to be Maryland, where last month’s gambling losses were 37.5% higher than 2021 and 48% over pre-pandemic 2019 for a total haul of $213 million. That may be peanuts by Las Vegas standards but it’s the biggest casino month in the history of the Free State.

Posted on November 7, 2022September 14, 2023 by David Mckee — 3 Comments

DraftKings tumbles big-time; Big Gaming bets on red

“It’s kind of fun to do the impossible,” said Walt Disney. For the leadership of DraftKings, “the impossible” would include finding a path to near-term profitability. DKNG reported 3Q22 numbers late last week and J.P. Morgan analyst Joseph Greff called the projected, year-end negative return on investment “worse than expected.” And it gets more adverse next year, when DraftKings is expected to return [sic] $110 million more negative ROI than Wall Street anticipated. “This is disappointing as this outlook follows recent 3Q22 earnings commentary from DKNG’s OSB/Digital competitors … who have talked up an accelerated path to profitability and suggests that DKNG is lagging peers on a path to positive EBITDA generation.” Oh sure, DraftKings might produce a positive ROI … in 14 months or maybe break even in 2024. But the company continues to get less bang for its buck, in terms of revenue and market share than (privately held) rival Fan Duel.

Posted on November 4, 2022September 14, 2023 by David Mckee — 1 Comment

MGM, Penn disappoint, Golden droops; Tilman’s gambit

Dragged down the golden albatross that is Macao, earnings of MGM Resorts International missed analysts’ projections by a whopping $1.61 per share for a 3Q22 loss of $1.39/share. More’s the pity, as MGM did so many things right. Wall Street expected 91.5% Las Vegas Strip room occupancy; MGM delivered 93%. The Street anticipated $3.2 billion in quarterly revenue; MGM saw that and raised it by $200 million. But Macao missed analyst estimates (which can’t have been very high to begin with) by 18%, eking out $87.5 million. J.P. Morgan analyst Joseph Greff dismissed the quarterly numbers as “more of the same,” while Deutsche Bank‘s Carlo Santarelli was slightly more clement, calling the results “some bumps, but broadly solid.”

Posted on November 2, 2022September 14, 2023 by David Mckee — 4 Comments

Caesars Strip-tease; Slot flea swatted; Biden targets resort fees

In the end, all that talk of Caesars Entertainment selling a Las Vegas Strip asset was just a sham. The company probably couldn’t find any takers for the Flamingo at CEO Tom Reeg‘s preposterous asking price (ditto his equally preposterous conditions for vending Planet Hollywood). Reeg’s explanation was “We ran into a market where the cash flow of the asset continued to increase and the ability of buyers to raise financing made it a very easy decision for us to keep.” Never mind that his decision blows a $1 billion-$2.5 billion hole in the strategy to pay down the company’s groaning $13.3 billion debt load. (If there is a recession, God forbid, Caesars will be in a boatload of trouble.) In the end, nobody was going to pay $2.5 billion for the Flamingo and even Planet Ho would be a heavy lift at that price.

Posted on November 1, 2022August 24, 2023 by Bob Dancer — 7 Comments

What Was Your Best Gambling Decision?

Pick your one or two best gambling decisions throughout your life. Pick them before reading on. Take however much time you need. This blogpost will be here when you get back.

This post has been inspired by my recent reading of Annie Duke’s books, “Thinking in Bets” and “Quit.” I wrote about these books last week. I’m not sure which book spoke about this topic. I read them more or less concurrently as audiobooks checked out from the library, and they’ve both been returned.

Posted on October 31, 2022September 26, 2023 by David Mckee — 2 Comments

Atlantic City beat; MGM Cotai padlocked; Adelson buys Abbott

“Did Bally’s open a casino in Atlantic City and forget to tell anyone about it?” So asks our East Coast correspondent. “This is Bally’s yesterday (Sunday). A few casinos here would have more customers during a snow storm than this.” As though to prove their cluelessness, Bally’s Corp. mailed its faithful Boardwalk customers a lengthy flier touting the Tuesday promotions (including the blue-plate specials) at Dover Downs, right? Nope … Bally’s Vicksburg. What a waste of time, money and bandwidth. And this is the company that’s supposed to elevate Chicago into the casino major leagues?

Posted on October 28, 2022September 14, 2023 by David Mckee — 1 Comment

Station accentuates positives; Wynn gets richer, Adelson poorer

Do Station Casinos execs really want to double their footprint in seven years? Yesterday they reported flat 3Q22 revenues of $414.5 million, all but $3 million of which were Vegas-derived, unwittingly highlighting the company’s exposure to a single market. Company leadership promised better times ahead—and soon. CFO Stephen Cootey spun the disappointing first blush by pointing out that, on a same-store basis, it was the best third quarter in the company’s history. Although foot traffic was flat with 2Q22, Cootey said spending trends are strong, with F&B recording its best third quarter ever. While pledging not to look into his crystal ball, CEO Frank Fertitta III said, “We don’t see anything that would suggest that it will be any different than it has been historically, other than the last third quarter, when we had a bunch of stimulus money in the economy that may have made things a little harder to read.” In other words, comparisons to to 3Q21 don’t count.

Posted on October 27, 2022September 18, 2023 by David Mckee — 3 Comments

Strip still booming, locals flat; Gambling with democracy

Nevada scored yet another $1 billion-plus month in September, up 8% from 2021. As you might expect, the Las Vegas Strip drove the big gain, booking $693 million in win, up 8%. Strip slot revenue was $409.5 million, a 17.5% vault in coin-in. Table games not called ‘baccarat’ saw 10.5% more wagering and the whales appear to have returned to the baccarat table, where betting volume was 34.5% larger. Luck wasn’t with the house, which saw 3% less baccarat win.

This more than compensated for a Las Vegas locals market that has leveled off from last year. Downtown was more like its old self, gaining 1.5% to reach $74 million while Laughlin hopped 5% to $39 million. Boulder Strip casinos took a hit, down 8.5% to $74.5 million. This negated most gains in the rest of the locals picture. North Las Vegas was up 5% to $23.5 million, proving out Station Casinos‘ contention that demolishing two casinos wouldn’t hurt the region. Miscellaneous Clark County climbed 4% to $142 million.

Blog Posts