Las Vegas Advisor

Posted on July 30, 2021September 26, 2023 by David Mckee — 3 Comments

Masks back on, Las Vegas!; All’s right with the REITs

Mincing few words, MGM Resorts International CEO Bill Hornbuckle sent a letter to all employees, urging them to quit dithering and get their Covid-19 vaccinations, if they haven’t already. He pleaded, “In addition to the heart-wrenching thought of more illness and death, I fear that progressively more restrictive measures, including a return to social distancing and capacity restrictions, could be around the corner if we continue on this path. This would be a significant blow to our community, industry, and economy.” Clark County‘s current vaccination rate currently stands as a dismal 44%. The county is reliably “blue” territory, so this crisis goes beyond political chumming of the anti-vaxxer waters. Playing to his audience’s wallets, Hornbuckle warned that, as Las Vegas‘ health goes, so does its economy. If Coronavirus worsens and scares tourists away, furloughs and layoffs could follow. He wrote, “After the pain endured by so many these past 16 months–and the tremendous progress made in 2021–I can think of no more damaging scenario for us as a community.”

We think that Hornbuckle and others in like positions in Big Gaming are stopping one step short and need to mandate vaccination for their workers. If little outfits like Google, Facebook, Twitter, Netflix, Lyft, Morgan Stanley, Saks Fifth Avenue, The Washington Post, Ascension Health and BlackRock can do it, MGM can. We know you’re feeling cabin fever and ‘pandemic fatigue’ out there, America. We feel your pain. It would be great if events ran in a bright, linear fashion. But this is a war, a once-in-a-century calamity and, had we been so easily discouraged in the 1940s, the Axis powers would have won World War II (gladdening the heart of Imperial Palace founder Ralph Engelstad).

Posted on July 29, 2021 by David Mckee — 3 Comments

Station hits records, drops hints; Strip suffers mild setback

Station Casinos announced 2Q21 earnings yesterday and “blows through” previous peaks, according to Deutsche Bank analyst Carlo Santarelli. Despite expiration of the management contract at Graton Rancheria, Station recorded record levels of net revenue ($426.5 million) and cash flow ($210 million), leaving Wall Street‘s $159 million consensus in the dust. Management is in no hurry to reopen Texas Station or Fiesta Rancho or Fiesta Henderson and why not? It costs only $2 million per quarter to keep them dark and their business is obviously being soaked up elsewhere. Station execs performed a fan dance regarding Durango Station, withholding the budget but announced their intent to break ground in early (pre-April) 2022, with an 18-24 month construction timeline envisioned. When completed, it will have 2,000 slots, 40 tables and four restaurants, along with the inevitable sports book. Santarelli expects Durango Station to be financed out of (abundant) free cash flow, possibly filled out with the sale of some excess land. The $650 million all-cash Palms sale proceeds have also been earmarked to cover construction costs.

Buffets may be gone with the wind but Station expects to reopen its showrooms in the second half of this year, and for group business to return over the next two years. Truist Securities analyst Barry Jonas noted “incremental hotel business” improvements congruent with the distribution of the Coronavirus vaccine. “Stimulus payments have also played into recent strength, though management noted sizable savings and discretionary income with their core customer base beyond stimulus.” While acknowledging “uncertainty” around the state mask mandate, Station brass said that business didn’t change markedly when masks came off in June. “This suggests there may not be any meaningfully negative impact with reintroducing masks,” reported Jonas, “Management also notes that they expect any potential impact to be short-lived.”

Posted on July 28, 2021September 14, 2023 by David Mckee — 1 Comment

Boyd beats The Street but charts cautious course

“Massive beat” and “exceptional” results were some of the terms being bandied about after yesterday’s Boyd Gaming 2Q21 earnings call. Wall Street expected $803 million in revenue and Boyd delivered $896.5 million, while profit margins at its Las Vegas locals casinos rose all but exponentially over 2019. “We believe this acceleration is likely to surprise investors,” wrote Deutsche Bank analyst Carlo Santarelli, adding that Boyd executives thought their performance targets had been too conservative. They also gave a hint about 3Q21, saying that June’s strength was (no surprise) carrying over into July. “While investors are sure to question the sustainability of margins going forward, as any right minded individual would, especially after this quarters [sic] performance, we continue to believe there is support in the thesis for the likes of” Station Casinos, Golden Entertainment and Boyd. Leadership, JP Morgan analyst Joseph Greff wrote, “notes that the 2Q21 undoubtedly benefitted from government stimulus and unemployment insurance padding consumer spend, but also strong demand from its core customer.

“While labor shortage is an issue, we don’t think elevated labor costs going forward will pierce margin gains in a significant way which poses risks to our new forecasts,” Greff continued. He liked a business plan “predominantly focused on a drive-to, leisure gaming customer. We think our estimates are reasonably based, with a steady return of its older demographic.”

Posted on July 28, 2021 by James Grosjean — 15 Comments

What is an “AP”?—Part I

[Note: Season 1 of Colin Jones will resume next time, and there is further good news: Netflix and GWAE have announced that Colin Jones is renewed for Season 2!]

A few times per year, my elderly parents used to make the drive from New Jersey to Boston. Like all old people who haven’t grasped the power of the “cellular telephone,” they would stock the car with snacks, bottled water, batteries, blankets, and other survivalist items, just in case the 4-hour drive turned into nuclear winter. They—meaning my daddy—would also use old-school paper diagrams of the land and roads, that they called “maps” (before the word earned a capital letter). The map was marked with an asterisk in Connecticut for a particular rest stop—the one that had immaculate bathrooms.

Posted on July 27, 2021August 24, 2023 by Bob Dancer — 5 Comments

A New Game for Me

I was looking at dollar progressives and found a 9/6 Triple Double Bonus Poker game where the royal was at $5,300, aces without a kicker were at $1,400, and the two kicker jackpots were just slightly higher than reset. It was a bartop game, the meters rose by 1% with each dollar played, and nobody was playing it.

I have not played a lot of progressives, but I was pretty sure this was positive. I went to my hotel room, checked my computer, and found out it was right at about 101%, including the slot club. I created a strategy using the Wizard of Odds Video Poker Strategy Calculator, studied that, practiced the game on WinPoker for about twenty minutes, and headed down to play.

Posted on July 27, 2021September 26, 2023 by David Mckee — 5 Comments

Caesars massacres table games, renames Superdome; Bally’s boffo

At the risk of flogging a deceased equine, the emperor at Caesars Entertainment has yet again showed himself to be without clothes. The latest Eldorado-ization of the Roman Empire is the wholesale slaughter of table games along the Las Vegas Strip. As Vital Vegas reported over the weekend, “entire swaths” of the games have disappeared from casino floors, leaving blank patches to be filled in with slot machines or that dreaded new idol of casino executives, electronic table games. Just think of all the high-salaried dealers you can pink-slip! As Scott Roeben wrote to us, it’s “a really big shift that was happening under our noses.” We should have known, perhaps. Caesars execs had been promising to run a post-pandemic company at pandemic-era cost levels, which would require some real creativity. Enter the robo-games and the conversion of properties like Caesars Palace and The Cromwell into giant slot parlors.

Not only do ETGs cost less than old-fashioned table games, they offer lower minimums (and table minimums along the Strip have gotten pretty steep). It’s a shameless play for the low-roller clientele and another symptom of “Less Vegas,” the post-Covid environment in which the casinos make money by offering a diminished experience for the same—or sometimes higher—price. Certainly in Caesars’ case it bespeaks a contempt for the player, providing a regional-casino atmosphere in what was supposed to be the Holy See of gambling. It’s the latest in a death of the Roman Empire by a thousand cuts: short-poured liquor, closed buffets, shuttered shows and defunct player lounges. Roeben gloomily writes, “As there’s unlikely to be a new wave of demand for table games, expect this to be the new normal in Las Vegas casinos.”

Posted on July 23, 2021September 14, 2023 by David Mckee — 3 Comments

‘ElDiablo’ rides again; Sports betting on the verge in Massachusetts

Last week, Vegas Message Board hosted a lengthy, detailed and impassioned screed from a self-professed Seven Stars member about a recent trip to Las Vegas and stay with Caesars Entertainment. First, the good news: the player host was extremely obliging, guest service was friendly and great, and the food was very good. The bad news was … almost everything else. The guest rooms at Harrah’s Las Vegas (our source’s hotel of choice) “were all recently remodeled, were nice enough, and had a low comp rate.” But mention the magic word “Eldorado” to an employee and, boy, did they spill! This started as soon as the party arrived, being informed that valet parking was closed from noon on Tuesdays until the weekend. The valet parking attendant “told me they are always hiring but that they have plenty of parkers and plenty of business to have valet open 24/7 like it used to be. He said it’s all Eldorado being cheap and not caring about providing the customer the proper service they are entitled to and have come to expect.”

“This became a theme of the trip; mention Eldorado to an employee and they knew YOU knew what was going on and felt they could talk candidly about how far and how quickly Eldorado is bringing the company down and treating not just guests, but also employees, with disdain.” The hits just kept on coming: The Seven Stars/Diamond lounge was closed, ostensibly on a temporary basis. Our source was told it has been defunct since the Great Reopening and they don’t expect it ever to resume hosting players. Upon check-in (understaffed), the visitors witnessed a line like the one seen below—by a friend of S&G—at 4 p.m. on a Sunday over at the Flamingo.

Posted on July 22, 2021September 18, 2023 by David Mckee — 1 Comment

LV Sands overpromises, underdeliver; Court to Station: Unionize!

Shares of Las Vegas Sands traded down yesterday after the company missed its second-quarter estimates. Wall Street expected cash flow of $290.5 million and LVS delivered $244 million, a significant shortfall. (Mind you, Sands no longer reports earnings from Venelazzo.) Revenue overall was $1.17 billion, not the expected $1.37 billion. Sands execs blew sunshine up Wall Street’s keister, predicting better Macao business in the third and fourth quarters, albeit conceding that Singapore was harder to predict. Due to Marina Bay Sands-derived Coronavirus cases, the megaresort is closed from today through August 5. As for LVS’ new focus on i-gaming, the company is thinking small, planning to act as a supplier to other online companies and make minor purchases. Or, as President Patrick Dumont wisely put it, “I don’t think we’re going to buy our way into a business.”

Back on terra firma, CEO Rob Goldstein is still in denial about Texas after the company’s stunning rejection there, while continuing to ramp up ($17 million and counting) a ballot drive in Florida to permit new resort casinos. The company is concentrating on the gaming-averse northern part of the Sunshine State, going out of its way not to antagonize the powerful and well-heeled Seminole Tribe.

Posted on July 21, 2021September 14, 2023 by David Mckee — 1 Comment

Real estate frenzy on the Strip; Barrack busted; Masks redux

Setting foot inside Aztec Inn Casino is not for the faint of heart. But its owners think they’re sitting on a gold mine. It and a gaggle of properties that includes Golden Skull Tattoo and Diversity Tattoo is on the market in plots of $30 million each or $60 million for the whole Aztec enchilada. Because the area is somewhat, uh, challenged, it qualifies for tax incentives and there’s no height restriction on development—you’d be next door to the friggin’ Stratosphere, after all! Now, those prices seem a mite aggressive, given the off-Strip location and general dilapidation of the area. But with two acres of CityCenter fetching $80 million, why be timid about one’s asking price? It’s a seller’s market. As for buyers, so far they’re overseas interests who, seeing the chances of gaining a foothold on the Strip proper as being somewhere betwixt slim and none, are creating their own opportunities.

The fix was in at City Hall in Oakland, where the Athletics—despite extracting desired concessions from the city—used the negotiations as a pretext to pull up stakes and move to Las Vegas. Considering that A’s brass was kicking the tires on Clark County ballpark sites the day before the vote was taken is an index of how sincere the team was about staying in California. So it looks like Clark County will be strong-armed into helping subsidize a billion-dollar ballpark, even as it has already made three emergency-fund draws to keep Allegiant Stadium up to date on its bond obligations.

Posted on July 20, 2021 by Bob Dancer — 15 Comments

How I Order Food

I recommend you start out with reading Matthew Dicks’ Facebook post from July 2, 2021. Matt is one of my storytelling gurus and has posted daily posts “forever.” This time he writes about how he and his wife’s different eating habits mesh well with those of a few friends. Matt (and the female friend) like to order their own food without regard to whatever anybody else is having. They prefer to eat it without sharing with others. Matt’s wife Elysha (and the male friend) like to order somewhat communally. “If you get the veal, I’ll get the chicken and we’ll share!” When Matt and Elysha go out with these friends, everyone gets to eat the way each prefers, and all have a fine time. (Dicks lays out a third way to eat too. You’ll have to read his post to find out what it is!)

The post caused me to look at the way Bonnie and I order. It has nothing to do with any of the ways Matt laid out. It is probably a way that he has never considered. But I’m willing to bet the farm that a number of the people who read my blog order in a similar way at least some of the time.

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