Unite-Here quickly ran out of patience with the Golden Nugget and Resorts Atlantic City. 97% of affected membership voted to authorize strikes at both the bottom-feeding casinos if a labor deal can’t be reached before August 1. That still gives both Nugget and Resorts management some wiggle room but it also indicates that talks are not going well. Although the exact nature of the grievance wasn’t specified, we’ll hazard a well-educated guess. The casinos are probably taking a page from the Carl Icahn playbook and demanding a preferential, lower, wage scale. That negotiating tactic bombed at Trump Taj Mahal and probably won’t play much better at the two holdouts, if they go to the wall. The union has made it crystal-clear that it won’t accept second-tier status for any of its employees at any casino in town.
As Golden Nugget bartender J. Eger told a Philadelphia TV station, “We just want what workers at the other casinos in the city are getting. We’re not asking for any more or any less than that.” You don’t have to dig very deeply into that remark to find the subtext. Meanwhile all the other casinos in town are being pretty george, making the newly reached salary levels retroactive to June 1. Good on them.
Across the river in Pennsylvania, the state’s casino industry is grossing more dollars than ever in fiscal year 2021/2022, even though—according to J.P. Morgan analyst Joseph Greff—it’s well off the 2019 pace. Then again, the Pennsylvania Gaming Control Board sloshes online-gambling and gray-market slot routes into the tally, so we’re more confident in Greff’s comparison than the PGCB’s. He’s backstopped by Deutsche Bank‘s Carlo Santarelli, who reports a $269 million gross, which is +3% overall but a 1% decline on an apples/apples basis.
When it comes to brick-and-mortar gambling, June was a very mixed bag. Hollywood Penn National continues to widen its lead on Parx Casino, grossing $57 million (+6%) to Parx’s $52.5 million (-10%). And although David Cordish was just spouting a bunch of B.S. to Global Gaming Business about how Philadelphia Live is running the table in the City of Brotherly Love, the cold, hard fact is that patrons have reverted to Rivers Philadelphia ($42.5 million, -2%) while Cordish is getting squashed like a bug ($22 million, +8.5%). The novelty factor of Philly Live sure wore off fast.
Wind Creek Bethlehem dominated the outstate casinos with $42 million (+15.5%), while Valley Forge Resort took an 18% tumble to $34.5 million. Even so, it still left Harrah’s Philadelphia ($17 million, flat) eating its dust. Rivers Pittsburgh enjoyed market supremacy in the Steel City with $29 million (+2%), prevailing over Hollywood Meadows ($17 million, -16%) and Pittsburgh Live ($8 million, -2%), the latter soon to be juiced by a modest, new event center. Mohegan Sun Pocono Downs booked $20.5 million, up 8.5%, closely followed by Mount Airy‘s $19.5 million, albeit down 11%. Presque Isle Downs slid 10.5% to $9 million and Lady Luck Nemacolin fell 14.5% to $2 million. The two Penn National Gaming satellites made up for some of the losses elsewhere. Newbie Hollywood York chipped in $7 million while Hollywood Morgantown rocketed 287% to $5 million.
Sports betting promotions ate up $10 million of the $23 million revenue take, on handle of $393.5 million. FanDuel captured $10 million in revenue, while DraftKings took in $3 million, BetMGM $2.5 million, and BetRivers and Barstool Sports $2 million each. Parx and FoxBet scored pocket change and Caesars Sportsbook got blanked. Internet gambling was much more lucrative, scoring $103 million (+16%), $42 million of that going to the four-skin Hollywood Casino consortium. BetRivers was next with $25 million, followed by FanDuel’s $18.5 million.
Although some Wall Street pundits are (rather wishfully) predicting a big Macao recovery next year, Moody’s Investors Service is keeping its powder dry, postponing the bounceback to 2024. Quoth Moody’s, gross gaming revenues “will weaken to 30% of 2019 levels this year, before improving to 70% in 2023. We expect a full recovery in the mass segment only in 2024, which will lead to a significant improvement in the gaming operators’ credit metrics.” The pressing question is how long some of the operators can hang tough. Galaxy Entertainment has so much cash on hand it can wait ’til Hell freezes over but SJM Holdings is facing serious questions as a going concern.
Complicating the picture is that VIP players are an endangered species, which hurts everyone, although mass-market-oriented Galaxy and Sands China would seem to have the least reason for worry. But, opines Moody’s, “MGM [Resorts International] is the most insulated from continued weakness in the Macao gaming market because of the strong recovery in its extensive US operations.” Whoever thought American casinos would be propping up Macanese ones? The irony’s so thick it could choke you.
Sports betting generated an anemic $15 million of revenue in Michigan, of which only $5 million was left after promotional givebacks. FanDuel had a 39% market share, BetMGM 32% and DraftKings 11%, as did Barstool. Caesars got blanked. Again. How much longer can it afford to underperform like that? Internet casinos, meanwhile, pulled in $121.5 million, led by BetMGM’s 39%, then a FanDuel/DraftKings scrum for 15% each, segued by 4% each for Caesars and WynnBet, and 3.5% for Barstool. Penn National seems to be doing a good job of staying in the picture with Barstool, waiting for attrition to provide growth opportunities.
Jottings: Cost creep at Hollywood Baton Rouge is more like a gallop. The $60 budget has ballooned to $100 million, as pilings submerge into Mississippi River mud. “And also, the supply chain, it’s absolutely horrible right now. They’re having a hard time getting steel, they’re having a hard time getting basic supplies,” added Louisiana Gaming Control Board Chairman Ronnie Johns … While a few Atlantic City casinos haggle with their workers over cost-of-living adjustments. Wind Creek Bethlehem is being george about the problem. It’s unilaterally issuing stimulus checks to its employees, to help them overcome pain at the pump. It’s also offering flexible work schedules to reduce the amount of childcare and driving that workers will have to pay for. “Every member of our Tribal Council believes very strongly that they need to support our team at this time,” said Poarch Band of Creek Indians Tribal Chair Stephanie Bryan. Amen to that. Big Gaming, are you listening?