Editor’s Note: Yours truly is still on vacation, so today you’re in the capable hands of Jeff Leatherock, who ponders Las Vegas‘ emergence as a major league sports town. Enjoy!

I have been a big sports fan for 50 years. I also wound up being a fan of the business of sports for about as long. I read The $4000,000 Quarterback for the first time around 1972. 

The 1960s-70s were a great time to be a young sports fan because new leagues and teams were popping up all the time and everywhere. From 1960-80 there was, on average, more than one new team added each year to the “big four” North American sports  (baseball, football, basketball and hockey). Two football leagues, one basketball league, nine MLB teams. The NHL doubled in one Swell Foop in 1967, going from 6 to 12 teams, and by 1980 had 21 (!) teams. The NFL had endured the best shot of the AFL being formed and had a merger agreement with them by 1967. The attempt by the WFL to get in on the action in the early 70s was an abject failure. The ABA  began their decade long war of attrition with the NBA in 1967 and ultimately staggered into the league with the Nets, Nuggets, Pacers and Spurs “allowed” to buy their way into the NBA.

Continuing JP Morgan‘s march through Las Vegas, senior analyst Joseph Greff met with Boyd Gaming CEO Keith Smith and CFO Josh Hirsberg. They seemed pleased, on the whole, marveling and the resilience of their customers, whose play was “amazingly consistent” no matter how many Covid-related mandates you throw at them. Downtown, they conceded was somewhat more of a challenge, given the lack of Hawaiian players. Spend per visitor, however, is above 2019 levels “which management attributed to a healthy consumer backdrop and a higher value customer coming through the doors.” This is some cooling-off in the regional markets, although Las Vegas locals and drive-in players remain stalwart. Boyd has even ceased marketing to low-value customers, what with Baby Boomers returning … albeit not yet at previous magnitude.

Management said it’s have trouble filling jobs, “noting that the shortage is somewhat limiting the amenities that can be offered.” That, in turn, is inhibiting revenue growth. Currently Boyd is at 60% of workforce strength compared to two years ago and “Surprisingly, the expiration of unemployment insurance/stimulus in some states has not resulted in people coming back to work.” Boyd is improving its profit margins by savaging marketing spending and relying less on full-time employees. (And they wonder why they’re having problems re-staffing.) Dark Eastside Cannery will remain so until January, possibly March. After all, it’s redundant to Sam’s Town next door, where business is “strong, but not overdone to level where additional capacity is needed.” A final bit of good news is that Boyd has gotten its leverage down to 3X equity or thereabouts, another sign of a company that rarely strays from sound business fundamentals.

There are signs that the regional gaming recovery is cooling (Missouri was up just 1% last month) but Indiana‘s August numbers, while not as hot as July’s, were a balmy 10% higher than 2019 as casinos grossed $203 million. Horseshoe Hammond lost a percentage point but retained the top spot with $33 million. Closing fast is Hard Rock Gary, with $30 million, while Ameristar East Chicago gained 9% to hit $21 million. Blue Chip, off to the east, sagged 11% to $12 million. Further to the south, Boyd Gaming saw even greater misfortune at Belterra Resort, plummeting 29% to $7 million. Also hard-hit was French Lick Resort, falling 26% to $6.5 million. Other revenue-negative performers were Rising Star, minus 6% to $4 million and Hollywood Lawrenceburg, down 11% to $14 million. In its last month as a Caesars Entertainment property, Caesars Southern Indiana was up 5.5% to $19 million, while Indiana Grand jumped 13% to $24 million and Harrah’s Hoosier Downs grew 12% to approach $19 million. Bally’s Corp. had a good first month at Tropicana Evansville, up 5% to $13.5 million.

As for sports betting, $215.5 million in handle boiled down to $17 million in revenue. FanDuel garnered $5 million and 30% market share against DraftKings‘ $4.5 million and 26% share. BetMGM was third with $2.5 million and 15%. Also in the game were William Hill ($2 million/11%) and Barstool Sports ($1 million/7%). In terms of getting the most bang per handle, FanDuel (25% of handle) skunked DraftKings (34%). Barstool also maximized its share of handle, which was 4%. William Hill had 13% and BetMGM 12%.