The Gaming & Leisure Properties Inc. regime at Tropicana Las Vegas was (as planned) a short-lived one. GLPI just announced that it has flipped the Trop to Bally’s Corp., which evidently couldn’t wait one minute longer to get onto the Las Vegas Strip. For an unspecified “value” of the property, Bally’s gets the casino and pays $22.5 million in “incremental rent.” Not done yet, Bally’s sold the real estate of its Black Hawk, Colorado casino and that of Jumer’s Casino Rock Island for a combined $150 million. That’s a neat trick for Bally’s, considering that its purchase of Jumer’s (a real turkey) hasn’t closed yet. Sell something you don’t own? That’s clever. We wonder what Illinois regulators will think of this three-card monte. The Black Hawk and Rock Island casinos will be consolidated into a GLPI master lease that includes Bally’s rentals of Tropicana Evansville and Dover Downs. “Recall, last year, early on it the pandemic, GLPI received the Trop from PENN … last year in exchange for 2020 rent credits (since used and expired). We look at today’s news as a creative way for GLPI to extract long-term value from last year’s deal with PENN (which is no longer the OpCo nor has any economic/equity interest in the Trop),” wrote JP Morgan analyst Joseph Greff. As for Bally’s, it may need a stout dose of Geritol, as it is making a habit of buying casinos with tired blood in their veins.
Sports betting is dead in Georgia and dying in Texas but very much alive and kicking in Arizona, where a legislative impasse was resolved over the weekend. Yesterday, solons voted to approve a grand bargain. Not only is online sports betting legalized, so is DFS. Twenty ‘skins’ have been approved, half for tribes and half to professional sports teams. Also, tribal compacts will be amended to permit more casinos in the Phoenix area. Gov. Doug Ducey (R, above) is expected to sign the bill this week. Legislators gave the bill a special “emergency” status—the better to have books up and running in time for NFL season. (Credit Suisse analyst Ben Chaiken had originally pegged Arizona for a 2025 launch.) Immediate beneficiaries are expected to be DraftKings, FanDuel and BetMGM. Revenue is projected to be in the $250 million-$300 million/year range.
Voters in Maryland overwhelmingly approved sports betting last fall and the Lege fell into line this week, voting out HB 940, legalizing OSB. The ‘george’ bill allows for no fewer than 60 (!) skins, meaning no one is likely to be left out in the cold. Also to the good is the registration process, which is online. (Illinois, are you taking notes?) “Under our current interpretation, we do not think the sports books necessarily need to partner with a land-based casino, but would need to pay a relatively small upfront license fee and renewal fee,” writes Chaiken. Gov. Larry Hogan (R) is likely to sign the bill, which (again) aims for NFL-season readiness. We’re not through Covid-19 yet but the runaway growth of sports betting simply must be the top story of 2021.
As for the man of the hour, that would be Foxwoods Resort Casino CEO Jason Guyot, the first (believe it or not) Native American to hold that important post. He’s the subject of a profile in Global Gaming News and joins Raving Consulting for this week’s podcast. Guyot has brought stability to a job that was roiled by the abrupt departure of John James and sudden death of the much-missed Felix Rappaport. As interim CEO, Guyot showed his stuff by shepherding Foxwoods through the Coronavirus shutdown and subsequent reopening. A casino lifer, Guyot got his beginnings in the industry as a Foxwoods bellhop, a better education in gaming than you can find at MIT. As he tells GGN, “I ended up in human resources and behavioral science, and continued to move my way up the organization. In 2007, I was offered the opportunity to move to operations and to oversee the opening of Fox Tower. I fell in love with operations.”
Foxwoods initially clashed with Mohegan Sun over the sports-betting compact signed with Gov. Ned Lamont (D) but Guyot puts the best face on the outcome, saying that “A lot of things need to happen to get it through the legislature, but we want to get sports betting up by fall, in time for the NFL season. That would be the goal.” There’s no reason to believe that OSB will sap in-person gambling and Guyot is sanguine. Although casino development in Japan borders on the comatose, Guyot is also upbeat about opportunities in the Land of the Rising Sun. Closer to home, he says business is running at as much as 65% capacity at Foxwoods. He may be playing with fire by booking Dave Chapelle for four shows this summer—not because of Chapelle’s humor but due to the plan to play at 90% capacity. At least face masks with be mandatory and ventilation upgraded. Still, Guyot seems to have a high appetite for risk.
A strange item flashed across the wires this morning, courtesy of the Great White North. It seems that trading of Canadian firm Interactive Games Technologies (IGT.BET) was halted last Friday. CEO Chris Neville felt it incumbent to release a press release saying, “Contrary to the information distributed last week by certain individuals purporting to act on behalf of IGT, I have neither resigned nor been terminated as CEO of IGT. I am currently working with the British Columbia Securities Commission and The Canadian Securities Exchange … on a number of issues at the board level which I hope will be resolved in due time.” Hmmm … working with regulators? A rumored resignation? Obviously all is not well at Interactive. Neville explains, “I have raised serious concerns that a large shareholder is effecting and steering the direction of IGT without authority, with the support and encouragement of two board directors.”
He adds, “Highly important information regarding certain potential transactions has been not provided to the CEO of IGT and meetings have been held without the CEO being privy.” It must be pretty humiliating to admit that your board has been meeting behind your back. Neville may still have his job but his perch looks pretty shaky at the moment.
Jottings: Is there a purge underway at Caesars Entertainment or is the company simply looking to clarify a byzantine PR structure? Difficult to say. But the Roman Empire is simultaneously advertising for a director of internal communications at CZR, a PR director at William Hill US and a director of internal communications at Harrah’s Horseshoe Iowa racino. There’s nothing like a good housecleaning … There was a little too much electricity in the air Monday at the Golden Nugget Las Vegas, setting off a fire. A “small electrical fire” broke out near the sports book at 7:15 a.m. According to the Las Vegas Fire Department it did not spread, did not smoke and did not require any evacuation. One employee was evaluated for minor smoke inhalation and we hope they get well soon … Good news for Las Vegans who like to sing: Nevada karaoke bars are being reopened at 50% capacity. (Just wipe down the mike, that’s all we ask.) Nudie bars hope to get the go-ahead as of May Day … Yet another green shoot: Minus5 ice bar and 1923 Prohibition Bar, both at Mandalay Bay, are taking group bookings, albeit only for private events. The same holds true for Minus5’s outpost at The Venetian and Icebar at The Linq … Bally’s Atlantic City is embarking on a strange promotion. It’s offering chances to win an oceanic cruise. First the bad news: No cruises are sailing from the U.S. right now. The good news? You’ve got 18 months to redeem the voucher. Surely we’ll past Covid by October 2022. Won’t we?
Bally’s sure is making some risky bets! I always thought BYD would have been a good fit for the Trop. Oh well.
Does Bally’s LV now become a Horseshoe and the Trop becomes Ballys???