Gambling revenues on the Las Vegas Strip last month heated up dramatically, $735 million or +23% from the year previous. Unfortunately for Nevada, the good news pretty much ends there. Locals play continues to decline, with Downtown off 11.5% to $70 million, North Las Vegas cooling 8% to $22.5 million and the Boulder Strip slipping 12% to $86 million. Laughlin wilted 14.5% to $36.5 million and miscellaneous Clark County dipped 1% to $146 million. Mesquite held its own, flat at $13.5 million and Wendover was up in June, gaining 5.5% to $20 million. Lake Tahoe, however, suffered a blowout, minus 29% to $22 million (yes, worse than North Las Vegas). Reno booked $61.5 million but stumbled 5%.
The statewide gross was $1.3 billion, up 8%, so expect that to be the official spin, even if the Strip was almost entirely responsible. Some Wall Street analysts ignore 2021 comparisons and cling to 2019 as their benchmark. In the context, June was an unalloyed triumph, with the Strip elevated 19% and $254.5 million in locals revenue marking a 35% surge. But year/year measurements strongly suggest those levels aren’t sustainable (at least off the Strip, where baccarat play still lags 2019) and that normalization of gambling is happening.
That seems to be the conclusion of Deutsche Bank analyst Carlo Santarelli, who reports that local slot coin-in was off 5% and table play decline 8.5%. By contrast, Strip coin-in rose 6.5% and non-baccarat table wagers were up 13%. Baccarat itself dipped 3.5% in wagering but win rocketed 253%. But it’s early innings yet, with international air travel still warming up in the bullpen. Wall Street took the revenue news in stride, with gaming stocks showing scant fluctuation.
Gaining a casino concession in Macao is, we’ve said before, a Faustian pact. If legal expert I. Nelson Rose is to be believed (and we think he is), the Devil—in the form of Xi Jinping—has come to collect. Unfortunately for the CEOs currently minding the store, their precursors who signed this blood oath are either deceased or, in Steve Wynn‘s case, might as well be. One of the problems the Goldsteins and Hornbuckles of the world inherit is that under the new casino act their concessions can be seized for ill-defined “national security” reasons. Junkets? On life support. Satellite casinos? Dying. Economic influence? Nil. Red China, according to Rose “has always hated the massive amounts of cash, estimated at US$150 billion a year, much of it escaping through Macau.”
Hence the extirpation of VIP play: “Punishing high-rollers is exactly the goal. The Marxists who run the PRC believe that all social problems arise from conflicts between classes. The rich are to be shunned, not admired.” Such “social engineering” makes for a limited tolerance for—but not endorsement of—gambling. “In fact, the new law is expressly designed to restrict the size of Macau’s casino industry.” At least there are tax incentives for those operators who expand the appeal of their Macanese properties beyond China and Taiwan. But that may not mean much when City Hall is telling you how many baccarat tables you can have and what your win tally should be—or else. Casino owners would holler bloody murder (and rightly so) if they were put under such strictures in the U.S. But when Peking says jump, American companies ask, “How high?”
Massachusetts Democrats are cutting off their noses to spite their faces when it comes to sports betting. Speaker of the House Ron Mariano (D) won’t back an OSB bill that doesn’t contain collegiate wagering and State Senate President Karen Spilka (D) won’t give Mariano what he wants, resulting in a complete impasse with time quickly running out. Spilka acknowledges the continued money drain out of the Bay State but says, “we would be ignoring the pleas of all the college presidents and athletic directors who know their students best.” As far as Mariano is concerned, no sports betting is better than professional-sports-only wagering. With an attitude like that, his constituents are well advised to hunker down and wait for the next Lege, hoping that a spirit of compromise prevails. Mariano’s been given half a loaf. He should take it.
The ancien regime at Caesars Entertainment evidently didn’t have time for playing by the rules in New Jersey. The company has been wrist-slapped with a 50 grand fine for “employing, for a number of years, approximately 49 individuals in numerous positions throughout various departments—including in the areas of purchasing, information technology, marketing, human resources, and credit—without such employees holding the requisite casino employee registrations.” That’s roughly $1K per scofflaw employee … pretty clement regulation. In addition, Caesars pencil pushers didn’t “maintain complete, accurate, and current records for each of its employees, including license and registration numbers.” Don’t blame the new management: Caesars self-reported most of the violations, which probably explains the lightness of the punishment. Caesars’ properties, Borgata and Resorts Atlantic City were also fined for either permitted excluded individuals to play or failing to verify players’ identification. Tsk, tsk.
Jottings: The sorry saga of Okada Manila grows more sordid by the day. Kazuo Okada‘s managerial junta stands accused of pilfering casino cages, what we would call “skimming.” The alleged skim is supposedly to secure operating funds, the casino’s bank accounts having been frozen … Give major environmental props to Golden Nugget Atlantic City. Rather than displace ospreys who are nesting on outdated billboards (including an ad for the deceased Bobby Rydell) the Nugget is keeping the old placards up until the ospreys have flown the coop on Sept. 1 … Following the abrupt resignation of one board member, Toronto-based Bragg Gaming Group has scooped up former Nevada Gaming Control Board chairman Mark Clayton as a replacement. He’s a plum catch and also currently sits on the board of Palms Resort Casino … Meanwhile, on the Strip, MGM Resorts International will fine you $1K if you smoke pot in your hotel room. Can’t really quibble with that … On the other hand, The Cosmopolitan of Las Vegas is reported to have put two-hour time limits on its in-room fridges. If true, that would win the Cosmo both George of the Year (for mega-bonuses to employees) AND Stiff of the Year. Quite an accomplishment.