Vegas’ Dream is TSA’s nightmare; MGM disses Chicago

Part Two of our survey of analyst reports on Vegas-based casino companies will have to wait a day, given a bevy of breaking news. First up, a major setback for the planned Dream Las Vegas on the south Strip. Airlines don’t want it and neither (and perhaps more importantly) does the TSA. Buildings in the immediate vicinity of McCarran International Airport are height-restricted to about 135 feet. $300 million Dream wants to go big: 237 feet. This presented no concern to the Federal Aviation Administration, it should be noted. But the security boffins at the TSA are concerned, according to the Las Vegas Review-Journal, about “the potential threat of active shooters in the hotel, improvised explosive devices in vehicles and people throwing objects over the airport’s fence.” Given the peril to McCarran fuel storage posed by the fusillade of the Mandalay Bay Massacre, these are not idle worries. The Clark County Planning Commission is leaning the TSA’s way and is also concerned that the proposed height of Dream LV would make it stick out like a sore thumb.

We’ve always been a little skeptical about the prospects for Dream (both its cost and business plan) but this really would seem to write finis to the project. It’s gotten a one-month reprieve from the Clark County Commission to come back with a compromise plan but we don’t see how, short of pulling up stakes and moving elsewhere, it could allay the TSA and its “aviation partners,” and their worries, which boil down to location, location, location. The TSA did indirectly suggest some design alterations that would smooth the path. Per the R-J: “the TSA pointed out open areas on the resort’s third floor where a pool is planned and the ninth floor where a day club would be located that would provide a direct line of sight for laser flashing and long gun attacks against aircraft.” Even were those eliminated, there is still the problem that airport-facing rooms could act as potential sniper nests, from the TSA’s viewpoint. Also, “government officials and professional sports teams” use the portion of the tarmac that would be closest to Dream.

Two pilots unions and five major airlines have joined the TSA in protesting Dream LV, and have raised a host of their own issues, ranging from drone activity to light pollution, as well as the impediment of further McCarran expansion. Pushing its luck, Dream requested a setback from the Strip of only two-dozen feet (not the required 68), which would pretty well nix any widening of Las Vegas Boulevard, a demand that did not endear the developers to the Planning Commission. Since owner David Daneshforooz and partners are only $21 million into their casino projection, our suggestion is they cut their losses and dream on … someplace else.

Did a recent story in the Las Vegas Sun get the poker-room issue backwards … or simply view a half-full glass as half-empty? Said pro player Justin Young, “I’m actually surprised that more rooms haven’t closed.” So are we. Yes, tables have shrunk from 418 in Clark County to 282 in the past year. But who’s to say that trend won’t moderate or reverse once Las Vegas tourism returns to normal? On the Sun‘s side, it must be noted that 282 tables is a faint shadow of the 1,000-plus that were in business in 2010, back when everybody and his brother thought they were a poker pro. At least one casino exec at Wynncore hints at an upward curve of inventory coming when he says, “Demand is slowly starting to creep back … We’re just now seeing poker play about to outgrow what we’re offering now.”

Given the health-and-safety infrastructure now in place for Covid-19 (and likely to become a way of life), downsized—as opposed to closed—poker rooms seems to be the coming trend. The Sun compiles a laundry list of prestigious rooms (The Mirage, Mandalay Bay, Green Valley Ranch, Palace Station, Sam’s Town) that are shuttered, but there’s no present reason to suppose this is a permanent thing. “We’re seeing more and more of our regulars come back,” said Red Rock Resort General Manager Scott Nelson and The Orleans reported business as Coronavirus-era usual. South Point execs are optimistic. So are we.

Wynn Resorts is suddenly “in” on the Chicago-casino derby—and both MGM Resorts International and MGM Growth Properties may be out. MGM Resorts said, somewhat bizarrely, that submitting a request for information doesn’t equal an expression of interest. Were they simply bored and had nothing better to do? By contrast, Wynn spokesman Michael Weaver told the Sun, “When a large city of significance decides to consider a gaming resort, we are interested. Chicago fits that profile.” And if MGM pulls back but Wynn persists, it should be game, set and match to Wynn. Mayor Lori Lightfoot would be crazy to consider any companies other than those two (or Hard Rock International, another late entrant). Already heavily invested in the surrounding area are Caesars Entertainment and Penn National Gaming, and the former is retrenching while the latter doesn’t have high-end resorts in its DNA.

Although several Chicago-area businesses, including Rush Street Gaming, have expressed interest, Lightfoot implicitly dissed them, telling the Sun, “Las Vegas is the gold standard of casino gaming.” She also said, “We want an [Request for Proposals] that’s going to be attractive to the top gaming ventures in the world—my hope is that many of them will have Las Vegas addresses. For us, the sky’s the limit.” Asked about the prospect for a second megaresort, Her Honor said wittily, “Listen, I love it. But getting just one from our state legislators had the gestation cycle of an elephant.”

Union Gaming‘s Grant Govertsen was also interviewed and saw the only downside being that Sin City might draw fewer Chicagoans if the Windy City had a destination resort of its own, preferably one designed like The Cosmopolitan of Las Vegas or twinned with one of the Second City’s convention centers. “At the margin, yes, there could be some lost business for Las Vegas,” he allowed. “By and large, though, as casinos have proliferated across the U.S., that’s generally grown the pie more than it has split up the pie. Whether it’s tribal casinos in California or riverboats in the Midwest, Las Vegas has continued to thrive.” Just one thing, Wynn: Not another curved, green skyscraper. Please.

Next door, in Indiana, February revenues bordered on the disastrous, down 31%. You could blame it on one less weekend day but that wouldn’t fair. More to the point is that the state was competing with a robust February 2020, which saw a 14.5% leap. Coping best was tiny Rising Star, off only 14.5% to $3 million. It’s now been over a year since table games debuted at the Hoosier State’s two racinos, so no more revenue boost from that. Horseshoe Hammond remains the top grosser in the state with $25 million (-32%), while nearby Ameristar East Chicago kept the damage to -17% ($15.5 million). Other northern-tier casinos were less fortunate. Majestic Star I was off 19% to $6 million, Majestic Star II tumbled 41.5% for a mingy $2.5 million and Blue Chip (above) fell 40.5% to $7.5 million. Caesars Entertainment had a pretty bad month all around: -38% at Tropicana Evansville ($8.5 million), -34.5% at Caesars Southern Indiana ($14), -32.5% at Harrah’s Hoosier Downs ($12 million) and -31% ($17.5 million) at Indiana Grand. It may not be a bad thing that CZR is reducing its exposure to this market. Others getting slammed were Belterra Resort (-40%, $5.5 million), French Lick Resort (-36.5%, $5 million) and Hollywood Lawrenceburg (-27%, $11 million). This month is sure to be better, guys.

“If you’re going for a touchdown, don’t spike the ball on the five-yard line. Wait until you get into the end zone,” said Dr. Anthony Fauci yesterday, regarding complacency about Covid-19. Dr. Fauci, meet certifiable idiot Jon Last, prexy of Sports & Leisure Research Group and premature ball-spiker. Whooped Last, “In the past month, we’ve seen a meaningful intensification in COVID fatigue that has only been escalated by the increased pace in vaccine distribution. Americans have ‘Spring Fever!'” Pardon our French but so the fuck what? We probably had ‘spring fever’ four times during World War II but our national resolve did not falter. This time the enemy may be microbes but there are higher priorities than beach volleyball, Jonny. Joining him in the penalty box is Fox News dimwit Brian Kilmeade, who said insensitively, “We don’t need to go over the 500,000 dead, we had that moment.” So half-a-million deaths only merits “a moment”? In Kilmeade’s addled brain perhaps. Had cretins like him taken Coronavirus seriously a year ago they might not have blood on their hands today.

Jottings: Could there be a Wynncore New York City? It’s thought that Wynn Resorts will jostle with Las Vegas Sands for a Manhattan casino license. Also in the mix is Bally’s Corp., which would be hilariously out of its depth … BetMGM has widened its marketing alliance with racist Buffalo Wild Wings. Kind shoots that ‘diversity’ thing in the ass … As recently as a year ago, Hokkaido was vying for one of Japan‘s three casino megaresort licenses. But now it’s pulled out of the running, er, crawling as momentum for casino development continues to fade … Capacity at MGM National Harbor and Borgata is being upped to 50%, good news for both … Casinos are still a long shot in Texas but sports betting could be the Lone Star State’s soft underbelly. That’s what state Rep. Dan Huberty seems to think. He’s proposed a constitutional amendment to permit sports wagering. More power to him … How do you bring back Jabbawockeez and keep it Covid-19 safe? Relocate it to vast MGM Grand Garden Arena (and limit audiences to 512 people) … The Biden administration’s $1.9 trillion economic-stimulus package should be a boon to the Nevada economy, including $171 million for McCarran International Airport … The Stardust brand is being expanded by Boyd Gaming as part of its new, online identity. Watch this space for more details. “Stardust Gaming” has a nice brand equity if you ask us (no one has) … Arizona Gov. Doug Ducey (R) wants historical-racing machines at OTBs and tracks. Native American tribes are opposed. We like Ducey but think he’s outmatched on this one … At least one Las Vegas Strip buffet is making another stab at it. Wicked Spoon at the Cosmo reopens March 25. Is it an outlier or are buffets back? The answer is in your hands.