Gambling revenue of $108 million out of Illinois last month looks pallid at first glance. But consider this: It was only 6% off April 2019’s pace, when casinos were at full capacity and last month they did it at 50% capacity. So the demand is the definitely manifesting. One of the stars of the market was Grand Victoria (pictured), up 1% to $13.5 million. Of course the marquee performer was Rivers Casino Des Plaines, grossing $41 million for a 7.5% lift. Nearby rivals Empress Joliet and Harrah’s Joliet were down 16% and 17% respectively, grossing $7.5 million and $12.5 million. Hollywood Aurora slipped 9.5% to $8.5 million. Mid-state, the tailspin continues for Casino Rock Island, spiraling -37.5% to a meager $3.5 million. Par-A-Dice, meanwhile, dipped 6% to $6 million. In the St. Louis area, Argosy Belle slipped 20% to $3 million while DraftKings Casino Queen was down 23% to $6.5 million. Harrah’s Metropolis was steady as she goes at $6 million.
Sports betting continues to lag casino reporting by a full month, so we are only now getting the March numbers. Handle was $633.5 million, from which $50 million in revenue was derived, including a tax haul of $6.5 million. Noteworthily, Illinois was just a few whiskers behind Nevada ($641 million handle). Silver State, look to thy laurels! The prohibition of bets on University of Illinois and Loyola College may have put a damper on March Madness action ($177 million), with professional basketball engendering $366 million in wagers. “March Madness helped deliver a huge month for Illinois, but March is essentially a ‘last hurrah’ for the state’s rapid growth,” warned PlayUSA analyst Joe Boozell. “Illinois will still be one of the largest U.S. markets because of the population of the state, but it will be difficult to maintain its current status as the U.S. No. 3, much less catch Nevada. No matter how appealing a market, there isn’t any easy way to overcome the inconvenience of in-person registration.”
Colleague Jessica Welman put it more bluntly, saying that “The question now becomes what will happen when the brakes are hit on that growth? Does it alarm lawmakers enough to make a change? Or will Illinois be satisfied with where the sports betting market has been frozen in place?” Operators new to the market are essentially screwed (to inelegantly paraphrase Welman), except for Barstool Sports, which made it across the transom in time before online registration ceased (again).
No surprise, DraftKings/Casino Queen was the top operator, with 32% market share. FanDuel, having defected from Par-A-Dice to Fairmont racecourse, was second with handle of $195 million, while BetRivers/Rivers Casino continues to fade from its early lead, back toward the pack with $107 million. Also-rans were PointsBet ($53.5 million), Barstool ($48 million, impressive given the circumstances) and William Hill (a disappointing $13 million). Operators distant from large population centers are expected to struggle now that in-person registration is once more the rule.
Casinos in neighboring Iowa were positively boffo in April, vaulting 30% over 2019 with $160.5 million in win. Yes, there was an extra weekend day but still … Prairie Meadows racino led the state with $22 million, a 28% gain, followed by Horseshoe Casino‘s $18.5 million, up 32%. Such dramatic gains were the norm for the Hawkeye State, too many to enumerate here. The most eye-popping was a moonshot +68% at Rhythm City, airlifting it to $10.5 million. By contrast, Boyd Gaming did ‘only’ 10% better at Diamond Jo Dubuque ($6.5 million) but was 34% higher at Diamond Jo Worth ($10 million). Other major operators shared in the wealth. Caesars Entertainment gained 32.5% at Isle of Capri Bettendorf ($7 million), 26% at The Isle Waterloo ($9 million) and 12% at Harrah’s Council Bluffs ($6.5 million). Penn National Gaming hit it out of the park at Ameristar Council Bluffs, +29.5% to $17 million. Not one of the myriad casinos in the state was revenue-negative, although a couple of the smallest were relatively flat. But that’s hardly bad news. Onward and upward.
In other news, we’re shocked—shocked!—that there’s another doping scandal in horseracing, this one affecting the outcome of the Kentucky Derby. Seems that winner Medina Spirit failed a post-race drug test, having too much betamethasone (a painkiller) in its system. While Medina Spirit will still run in the Preakness, this test result—if it holds up—could cause the Run for the Roses to be invalidated, with the runner-up, Mandaloun, getting the trophy. And since Mandaloun isn’t running in the Preakness, there would be no Triple Crown winner this year. Churchill Downs has done the right thing so far, including suspending trainer Bob Baffert, five of whose horses have tested positive for doping in recent years. “I got the biggest gut-punch in racing for something that I didn’t do,” Baffert told reporters. “And it’s disturbing. It’s an injustice to the horse. … I don’t know what’s going on in racing right now but there’s something not right.” He ought to know. This shouldn’t be a negative for CHDN stock, coming off one of the strongest Derby Days ever, but the only outright winners are bettors, whose winning wagers on Medina Spirit will be honored. Kudos to Churchill Downs for its handling of this imbroglio.
Station Casinos may have cleverly figured out a way to extract extra money from the San Manuel Band of Mission Indians. Seems that some of the high-priced artwork at the Palms was purchased jointly by the Fertitta Brothers and Station. So does San Manuel have to pay the Fertittas to relieve them of such items of dubious merit as Damian Hirst‘s Shark? Nobody knows yet but the devil remains in the details of the San Manuel purchase agreement. Meanwhile, Station isn’t getting the anticipated lift from the disposal of this beached whale of an asset. Howard Stutz polled analysts and found little love for Station. “We are probably willing to give them a pass on the Palms investment,” said Siebel analyst Steven Wieczynski. “They tried operating an asset out of their comfort zone, realized they were probably in over their skis and instead of holding on to it and flushing more capital away, decided to part ways. We applaud that.”
That’d be the sound of one hand clapping. JP Morgan analyst Joseph Greff added, “Our sense is that investors have given zero net asset value credit related to the Palms.” Ouch. Stutz notes that there remains the little matter of an unresolved labor negotiation at the Palms, something drawn out to epic lengths. Our own spider sense is that Station will invoke the federal WARN Act (as it has done in the past) and sack the entire workforce, giving San Manuel a blank slate from which to start. Whether San Manuel proves labor-friendly remains to be seen and surely has the Culinary Union on the tip of its collective fanny. The tribe, meanwhile, continues to assiduously seed the Las Vegas community, building up brand equity along the way.
Room rates on the Las Vegas Strip continue to solidify. For the week of May 30-June 5, they’re only 14% off the 2019 pace. This overlaps with the World of Concrete expo at the Las Vegas Convention Center, which doubtless accounts for the healthy comparison. No word yet on 2021 show attendance but it 2019 it drew 60,000 souls. Even so, midweek rates everywhere except Venelazzo (+19%) tend to be saggy. MGM Resorts International is -29%, Caesars is -43% and Wynncore brings up the rear at -47%. Weekends are, needless to say, much better. Las Vegas Sands is 52% higher than two years ago, MGM is +41%, but Caesars cedes 9% and Wynn Resorts is -38%. Gotta work on that.
The fast-rebounding hospitality industry added 331,000 jobs in the last quarter. But that’s hardly Mission Accomplished. Need a job? MGM is hiring across the country. It’s also earned a major diversity honor, as you will see above. Congratulations.
Jottings: Are buffets coming back? The king of them all is. Bacchanal Buffet reopens a week from Thursday. It’s been extensively remodeled and its food offerings expanded. It’s now taking reservations via Open Table, a move we applaud … Golden Week was good for Macao, “we think well above subdued investors’ expectations … and not seeing as much of a post-holiday slow down,” reported Joseph Greff. Play was at 60% of 2019 levels. May Day saw a record 45,000 arrivals, while hotel occupancies surged to 83%. Mass-market and premium-mass play led the way, with “robust” numbers despite anemic VIP play … Elsewhere on the market, $5 billion Grand Lisboa is creeping onto the market with only a small fraction of its hotel inventory ready for deployment. Count on Stanley Ho‘s heirs to underwhelm … Still proud of being one of the most backward states in the country, Missouri‘s Lege has shot down sports betting. Perhaps the problem was that it was part of an elaborate package that also included extensive slot routes, which have been death to casinos in Illinois … Say not so! Station Casinos sports-betting supremo and industry legend Art Manteris is calling it quits after an illustrious career. If you’ve ever played at the “Superbook” at Westgate Las Vegas, you’re admiring Manteris’ work. He will be missed.
Bob Baffert is making an even bigger ass of himself going on television trying to manufacture excuses for his Derby winning horse testing positive for a banned steroid. He blames “cancel culture”, he said stables are now open areas and that people are touching his horse all the time, as if that is something brand new. Credit to the Fox News host who heard the lame touching excuse and said the drug has to be injected into the joints of the horse. Horse racing dying gives me a big sad, I used to be a complete junkie reading the Racing Form for hours a night. I have no magic plan to offer to save it, but punishing dopers in a giant way is a good start…
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