While the last round of casino expansion in New York State was no better than a succes d’estime, Empire Station residents are still behind a planned 2023 enlargement that would bring three new resorts. Given the choice of casinos, higher taxes or budget cuts, 70% of voters pick Door #1. While no big players have descended upon Manhattan (unless you count Vornado Realty Trust), both MGM Resorts International and Genting Group would like to upgrade their racino slot parlors to full-fledged gambling, complete with hotel rooms. Leo the Lion is popular in Yonkers, where expansion has 73% support, while Resorts World New York gets the thumbs-up from 66% of its neighbors. Voters might even back expansion in a landslide: It’s estimated that 83% would approve were the issue clearly explained.
Except for Vornado, megaresort upscaling wouldn’t be that heavy a lift for MGM’s Empire City facility and for Resorts World, both of which have most of the gaming infrastructure in place, as well as a robust constituency. Still, neither is what you’d call presently a ‘destination resort’ and we wait for Las Vegas Sands to do more than drop vague hints about the Five Boroughs. For that matter, why is Wynn Resorts on the sidelines, especially in view of its Boston triumph? Unlike fanny-patting Gov. Andrew Cuomo (D), voters surveyed narrowly approve of extending online sports betting to the two Gotham racinos. At least somebody’s not leaving money on the table.
Credit Suisse analyst Ben Chaiken was underwhelmed by Tuesday’s earnings release from Scientific Games. “While we were on the wrong side of this one through the strategic review process and market momentum in sports betting, we still don’t think the risk/reward stacks up. SGMS has momentum behind it, we just think a lot of that is captured,” Chaiken confessed. He enumerated multiple concerns, including a major slowdown in social gaming now that pandemic restrictions are easing. And while sports betting and i-gaming were growing nationwide, Scientific’s segment of this was down sequentially and flat year/year. Saying that sports betting was “still additive” for Scientific, Chaiken added, “it’s tough to get overly excited with this limited apparent gearing.” Also, 50% of the company’s business is land-based gaming, “which still faces headwinds. With around 70% of units having been turned back on, we think there is a risk we never get back to 100% (which [Wall Street] views as a forgone conclusion), while at the same time sports betting likely continues to take up more square footage on the floor.” At least that’s a more sanguine outlook than our reaction to the dreadful International Game Technology earnings, to which our reaction could be summarized as “EEK!”
Also exuding caution was JP Morgan analyst Daniel Politzer, although this time the cause was “better-than-expected” DraftKings numbers. The company grew its share of the DFS biz and lowered its promotional costs, reasons to which Politzer attributed the positive 4Q20 outcome. Even so, he continued to like DraftKings’ capture of its targeted 20%-30% of both new markets like Michigan and Tennessee, and established ones such as New Jersey. He also saw strong conversion of OSB play to i-gaming within the DraftKings universe, as well as strong growth of handle in early-to-market states like N.J. New-user growth was pegged at a healthy 44%. Looking ahead, Politzer thought the valuation of DKNG was “fairly full” despite favorable legislative prospects this year.
Las Vegas is perceived as a place where people come to release their pandemic-era frustrations. Unfortunately, they continue to do so in a way that makes Sin City the Meaningless Crime capital of America. Case in point, the death of retired Connecticut policeman Thomas Driscoll in the wee hours of last Sunday on the pedestrian bridge between The Cromwell and Bally’s. Driscoll and a female companion were crossing said bridge at 4:30 a.m. when they passed a group containing Brandon Leath. Someone in Leath’s posse said something pejorative to Driscoll, prompting Leath to ambush the latter, according to Las Vegas Metro, connecting with the former bomb squad member with one fatal punch. Leath has been charged with homicide, as you might expect. His attack on Driscoll—committed right under the watching eyes of Metro—was apparently motivated by racial animus, as Driscoll and his date were an interracial couple. “He doesn’t argue, so when I heard all about this I was shocked,” former Driscoll girlfriend Anne Chong said of the deceased.
Leath has a history of violence, quick with his fists, according to KVVU-TV. “I was in [a convenience store doing a little shopping and he happened to see me, and he confronted me about wanting his stuff,” one previous Leath victim told reporters. “He knocked me out, so now I have to see a doctor about my possible concussion.” And that’s just the icing on the cake. He also terrorized the inhabitants of a local apartment complex. One hopes that the eventual return of normal tourism to the Las Vegas Strip will cause the recent crime wave to abate.
While Congress continues to think that it’s hunky-dory that Americans should work for wages that condemn them to poverty, the casino industry still provides salutary examples of gaming raising its employees’ standard of living. Our latest such dispatch comes from Graton Resorts & Casino, which has upped minimum salaries for non-tipped workers to $18.50/hour. That’s a $3.25/hour bump. Tipped workers, incidentally, will now receive a none-too-shabby $17.50. “Families in Northern California struggle to get by on the minimum wage,” said Graton Rancheria Tribal Chairman Greg Sarris. “Costs for food and shelter are inordinately high here.” The new labor pact was hammered out in collaboration with Unite-Here, with union prexy D. Taylor saying that “Too many employers in the hospitality industry have left their workers behind during Covid-19, and the leadership of Graton Resort & Casino sends a powerful message that our recovery depends on good jobs and a just economy.”
We’re not sure we agree with Taylor about the hospitality industry abandoning its workforces. At least you don’t see casino moguls whining that good-paying jobs will put them out of business … unless you count doom-and-gloom Tilman Fertitta, who went on CNBC to wail that a 2% wealth tax would be the End of Capitalism As We Know It. Then again, no casino CEO is as hated by his employees as Tilman and he’s just reminded us why.
Jottings: Although Ellis Island owner Gary Ellis is the developer of cashless-gaming system Marker Trax, it’s making its debut at Morongo Casino in California, another example of tribal casinos being first movers on the techno front. Marker Trax enables customers to load funds onto their smartphones and then play away … January sports-betting handle in Nevada was $646.5 million, with casinos keeping $52 million. That’s still way behind New Jersey … Wanna earn $7,200 in 10 weeks? Station Casinos has an internship for you. It’s looking to discover the next generation of casino managers, and is throwing in free room and board to do so. You have to be a college student and be prepared to attend “many meetings” … Macao-centric casino stocks, particularly those of Melco Resorts & Entertainment and Wynn Resorts, bounced nicely on news that travel restrictions to the gambling hothouse were being eased …
Scott Roeben, take note! Wynncore is getting into podcasting. A purpose-built studio will arise in the Wynn Las Vegas lobby. “That studio will host Blue Wire podcast personalities as well as star athlete guests to entice people to visit the hotel, get excited about sports, and hopefully place bets on them,” reports The Verge. Less auspiciously, the programming will be dormant much of the year, rousing itself for March Madness and the onset of NFL play—hardly the best plan to promote WynnBet … It’s only a first step, but sports betting has begun moving forward in the Georgia Lege. A state Senate committee has approved a bill allowing online sports betting—provided that it’s not on Peach State collegiate teams. “Right now, it’s going to the bookie, but when we pass this, it will be going to the lottery and broadband and rural health care,” said chief proponent state Sen. Jeff Mullis (R). The bill would also cap losses at $2,500/month. Putting faith over freedom, as usual, the Faith & Freedom Coalition is predictably opposed.