Malaysia we have a problem. The signature American attraction of Genting Group, its $4.3 billion Resorts World Las Vegas, is a dud, a flop, dead in the water, stale, old news. Why do we say this? Because when 4Q24 numbers were disclosed last week, it was revealed that Resorts World LV had cash flow of a bare $1 million. And why is that significant? Because it’s the customary measuring stick for return on investment. Meaning that Resorts World’s ROI for a period that included Formula One Weekend and New Year’s Eve was so small you’d need an electron microscope to see it, a tiny fraction of a percentage point. (It was $58 million in 4Q23, for the record.)
Genting execs’ response was twofold. One reaction was to blame the financial torpor on the continuing regulatory woes of the property, which is currently before the Nevada Gaming Control Board. Genting is explicitly pinning its hopes on new broom Jim Murren and his hand-picked team to turn things around once they’re licensed. The other reaction was to try and reboot a property that’s approaching five years old, with vague promises made of new restaurants and other diversions.
Interestingly, Genting strongman Lim Kok Thay chose this juncture to fall on his sword. 18-year Genting veteran Tan Kong Han takes his place. It’s not exactly an infusion of new blood but at least Thay’s successor knows where the silverware is kept.
It would be interesting to know how all this is being taken in New York State, where Genting has made some pretty extravagant financial promises for Resorts World New York, should it be green-lit for megaresort status. (At present it’s a gargantuan slot parlor.) If Genting can’t cut it on the Las Vegas Strip, how is it going to generate the literally billions of dollars it has promised the Empire State?
Genting’s partial declaration of penury will at least fall on sympathetic ears at the Control Board. Pleading poverty is a reliable get-out-of-jail-free card with Nevada regulators. If Murren can make it sound like Resorts World is tottering on the verge of ruin (which it very well may be), then Kirk Hendrick and colleagues may well go easy on Resort World’s money laundering and sundry other malfeasances. Above all else, the joint needs a new business plan. We’ll be all ears when new prexy Alex Dixon goes before the NGCB.
Remember the “Grumpy Old Men” lawsuit that sought to void the minority set-asides for investors in Bally’s Chicago? Well, it’s a moot point now that the SEC has (rather conveniently) failed to certify the investment plan as “effective.” The ostensible reason given was that “the prospectus financials became outdated and ‘went stale,’ essentially shutting it down.” Hmmm. Given the ideological leanings of the new administration, we find the timing awfully propitious for the Texas-based crackers who were trying to sabotage the set-aside in court.
Of course, this is bad news that Bally’s Corp. could have lived without. It’s not only out at least $250 million, it also has to go back to Square One in fundraising—or risk violating its agreements with the City of Chicago. Since Bally’s got its Chicago concession on the strength of its minority-investment program, it finds itself in a sticky wicket. So too does Mayor Brandon Johnson, who inherited the megaresort and now must proceed with it, willy-nilly.
In another development that is awfully convenient for the principals, the Federal Trade Commission says MGM Resorts International no longer has to come clean about the 2023 cyberattack that upended many a customer’s Las Vegas vacation. As described by the Las Vegas Review Journal, during the assault, “hundreds of slot machines were inoperative, guests could not access their rooms with smartphones and credit-card payment systems were disrupted, leading to the manual processing of credit-card transactions. Onsite ATMs and the company’s phone system also were inoperative.” In other words, a colossal clusterfuck.
During the previous administration, the FTC did the right thing and tried to compel disclosure by MGM, taking the side of consumers. But FTC Chairmanj Andrew Ferguson has disgracefully waved the white flag now. We do not find the timing of the agency’s surrender to MGM the least bit coincidental. There is being ‘business friendly’ and there is being downright supine. Ferguson is the latter. For its part, MGM is unrepentant, bellowing of “a dangerous overreach that sought to punish MGM Resorts for refusing to pay cybercriminals.” Remember, this is the same company that attempted to sue the Mandalay Bay Massacre‘s surviving victims, presumably for having had the gall to get in the way of bullets.
As even benighted neighbor Alabama seriously contemplates legalizing sports betting, Georgia continues to fall further and further behind the curve. OSB is legal in Florida, Tennessee, Kentucky and North Carolina, and may soon be in Mississippi (where retail wagering is already legal). But the Peach State continues to dawdle. Gov. Brian Kemp (R) removed himself as an obstacle long ago, but the Lege simply can’t get its act together. Last week the state Senate smothered an attempt to amend the state constitution to permit both OSB and casinos. An OSB-only effort in the lower house stalled because its sponsor couldn’t get his cleats on, so to speak.
Even though 80% of Republicans favor putting OSB to a vote of the public, that’s not good enough for the bluenoses at the state capital, apparently. We agree with proponent state Sen. Carden Summers (R), who says “This amendment does not force anyone to gamble.” There’s a sliver of hope this week, with the introduction of a proposal to fold OSB into the popular Georgia Lottery, thereby obviating the need for a constitutional amendment. Since Georgia solons shrink before the thought of an amendment like a vampire before a crucifix, what state Sen. Billy Hickman (R) is pitching makes eminent sense. The Hickman would allow for 18 licenses and a 25% tax (pretty clement compared to what’s going on in other states right now). It also wouldn’t need a two-thirds majority to pass out of the Lege. We like it … but lack confidence in lawmakers of both parties to do the right thing.
Little did we know that it’s now OK to bet on yourself in sports, so long as you wager that your team will win. This edict will undoubtedly come as welcome news to Jontay Porter, as well as the Fresno State basketball players newly caught with their hands in the sports betting cookie jar. Ditto the Iowa college football jocks who bet on themselves to be victorious. The NCAA and NBA, as well as sundry other enforcement bodies, may be less sanguine. Welcome to the new, ethics-free United States.
At least there’s one bit of good news. According to Jean Scott, tribally-owned The Palms has gone all-3:2 at its blackjack tables, reversing the odious Sin City trend toward 6:5. It may be an isolated stance but it’s a welcome one and we thank the San Manuel Tribe for taking it.
If Bally’s Atlantic City’s “management” was “willy-nilly” it might be considered an improvement.
I was downtown Chicago last week on Tuesday and stopped by Bally’s for about an hour and lost $20 playing video poker. I was on the top floor of the Medinah Temple and there was hardly anyone close to me. A cocktail server did not come by me but I did notice one near the table games a couple of times. Despite its great location Bally’s is not doing well. As you have said most of their other locations throughout the USA are not doing well either and that is why Bally’s cancelled their earnings call.
I stopped by Quartinos and sat at the bar and had dinner and the chicken parmesan/spaghetti combination was pretty good. It was not busy so I talked to the bartender for awhile and he had worked at Quartinos for about 10 years. Since covid ended in mid 2020 its been decent downtown but not as busy as pre-covid and lots of his friends in the service industry also work downtown and say the same thing.