Beating the expectations of the boys on Wall Street was Las Vegas Sands, which reported boffo cash-flow numbers from Macao and Singapore. In the former it did $631 million where The Street anticipated $600 million. In the latter, Sands’ EBITDA number was $491 million. Wall Street expected about $450 million. With 20 bucks a share to make up to hit analysts’ price targets by year’s end, Sands reverted to that tried and true form of price manipulation: share buybacks and $2 billion of them. Wall Street boffins predictably did cartwheels at the news. The bottom line is that the Miriam Adelson clan is going to scarf up 15% of the shares it doesn’t currently hold.
Macanese gambling revenue for Sands rose 10%, driven my strong mass-market play. Singapore’s boost came from expanded tourism from China, although J.P. Morgan analyst Joseph Greff cautions that this segment “still has to room to recover.” Sands’ Macao operations shrugged off a September typhoon and neared 3Q19 revenue levels (-8%), far outpacing the comeback in visitors per se. With airport traffic at only 62% of pre-Covid amplitude and nearby Guangdong Province at 72%, Hong Kong took up much of the slack (106% vs. 2019). Looking ahead, Sands is pulling in its horns a bit, cutting its capex spend on Marina Bay Sands from $575 million to $500 million. However, there’s well over a billion dollars of spend budgeted for Singapore next year, plus a $4.5 billion long-term commitment to Macao.
Casinos in Detroit are going with a RIchard Nixon, modified, limited hang-out strategy against their striking employees. They’re running scab casinos, “anticipating some service disruptions.” Ah, so that’s what the kids in the C-suite are calling a walkout these days: service disruptions. You can’t valet-park your car anymore and that’s just the start of it. Since Michigan gaming licenses are required to work the casino floor, Big Gaming’s options for scabs are somewhat limited. Expect managers to have to walk the walk behind table games and in the cage. “Management will be able to see how hard we work. They know how hard we work, but it’s going to be difficult,” said bartender Susan Gallagher.
Play Michigan paid a visit to the newly attenuated casinos and reported darkened slot banks, a shuttered poker room (did anyone notice?) and table games “with not as many dealers available.” If you wanted to cross a picket line to place bets on sports, robots were your rescue, as kiosks were still in service. The sports book was not. MotorCity closed its entire first floor, although gambling options were reported to plentiful elsewhere. The hodgepodge known as Hollywood Greektown was actually operating at something approaching full capacity, although the Barstool Sportsbook was dark.
MGM Grand Detroit COO Matt Buckley did nothing to further labor relations by issuing an inflammatory statement encouraging union workers to break ranks and come back to work, accusing the UAW indirectly of using threats and intimidation. Penn Entertainment also broke its silence on negotiations, praising itself for having “made generous, progressive settlement offers that position our team members and business for sustainable success.” That sounds like fancy-pants talk for poor-mouthing the unions. The latter, for their part, have taken a page from Motown empress Aretha Franklin, as their picket-line watchword is “respect.” (“No contract, no peace,” was also popular.)
As Unite-Here Local 24 President Nia Winston elaborated, “one thing I hear most from all the members here outside of protecting their health care, outside of retirement improvements and wages is the respect level … They believe that these employers have taken advantage of them and have disrespected them after they kept them afloat through the pandemic.” Added MGM veteran Jamil Johnson, “that’s how a lot of my coworkers feel because we really did sacrifice a lot. During shift change you see a lot of workers walking out limping. This is hard work.” To its discredit, MGM Grand, the highest-grossing casino in Motown, offers the lowest starting wages for a housekeeper ($15.93 an hour).
MGM housekeeper Alice Weaver was particularly steamed, telling The Detroit News, “We feel very slighted. We feel like they don’t understand our work. What we do every day. We don’t get no respect. And we want that more important than anything. Respect what we do, respect us as individuals. And that’s something we haven’t been getting.” She added that the casinos want to shift the cost burden of health benefits onto employees. The takes some nerve when one considers the profits casinos have racked up since Covid-19 gave them a pretext for taking a scythe to costs.
The most conciliatory of the casinos was MotorCity. It issued a statement that “significant progress has been made … We remain committed to bargaining in good faith and achieving a contract that is fair to our employees and allows our company to remain competitive in our industry.” (MotorCity also offers the highest starting wage to its housekeepers: $17.70 an hour.) However, Unite-Here disagrees, saying employees and their bosses are “dollars apart” in salary talks. “Workers are asking for pretty significant raises, given the concessions that they made over the course of the pandemic,” said Unite-Here spokeswoman Megan Cohorst. And no talks are on the agenda, another indication that Big Gaming is going try and hang tough. They’re enumerating service cutbacks and hunkering down for the long haul, looks lie.
On the subject of respecting one’s employees, a black eye goes to Agua Caliente Casino in Palm Springs, which cravenly walked back its no-smoking policy. We know and like casino boss Sal Scheri but this was a big screw-you to customers and employees both. As Casino Employees Against Smoking Effects stated, “We no longer live in the 90s and casinos should not be catering to the ever shrinking 10.9% of Californians who smoke at the expense of their employees and guests.”
CEASE also sent a delegate to the Pennsylvania Lege, to testify against the pro-smoking policies of all but one Keystone State casino. Our friend Richard Schuetz also spoke—and found solons pretty clueless about the issues and dangers involving secondhand smoke. They heard as well from the American Society of Heating, Refrigerating & Air-Conditioning Engineers, whose representative dismissed the potency of HVAC systems against smoke as so much bunk. As Schuetz writes, “When a global group with substantial credibility states that the filtration argument is a myth, the [casino] industry appears out of bullets.” We strongly recommend reading Schuetz’s report in full.
Jottings: Congratulations to the Las Vegas Aces, who won a(nother) WNBA championship last night, in a squeaker. With two rings in as many years (and three consecutive trips to the finals), the Aces are now a WNBA dynasty. Thank you, Jim Murren, for having the vision to bring them to Sin City, and to owner Mark Davis for helping them get over the top. Now if only Davis could work the same magic on the underachieving Las Vegas Raiders … Speaking of which, newly ex-Raider Chandler Jones is in the pokey again, having violated a restraining order yet another time. The Silver & Black sure knows how to pick ’em, don’t they? … Speaking of lack of restraint, our nation’s capitol is being roiled by a scandal that takes one back to Lefty Rosenthal‘s Vegas. A fight over a legislative position has seen strong-arm tactics (including death threats) that would do the Mob credit … Citing “unprecedented demand,” U2 has upped its 2023-4 engagement at the MSG Sphere from 43 shows to 54. Given the Sphere’s very limited seating capacity, U2 could probably play there for years and not satisfy demand.
Quote of the Day: “Allowing mobile sports betting throughout the state, based on a legal fiction that tribal servers render the entire state to be Indian land for mobile gambling purposes, undermines this state’s public policy, as expressed in (the constitutional amendment) to disallow such gambling in Florida absent approval by citizen initiative.”—No Casinos, intervening in litigation to invalidate the sports wagering contract between Florida and the Seminole Tribe. We hate to agree with prudes like No Casinos but they’re 100% on point in this case.