Said JP Morgan analyst Joseph Greff “not to worry, money losing buffets are not coming back” to Station Casinos. We can take this as gospel, since he got it from CEO Frank Fertitta III, Vice Chairman Lorenzo Fertitta and CFO Stephen Cootey. He added, “Lower promotional activity is here to stay, per management, and is going back to the basics.” So it’s kind of a bum deal for locals. During the Covid-19 closedown, management tinkered with marketing strategies and will eliminate those thought to have little or no traction with customers. “It feels this pivot away from promos is permanent and is focusing more on social/digital marketing and more player development touches for higher end /spend customers and far less on print, ads, billboards, and free play.”
The other headline item was concrete news on Durango Station. Responding to what Greff described as “investor skepticism” about the project (well-earned, we might add), management busted out details of the $400 million-$500 million casino, which should break ground in early 2022 and be finished by late 2023. The project will be funded entirely from cash flow—i.e., no new debt—including the proceeds of the Palms sale. Reasons to like Durango Station’s prospects include a high Asian-American demographic in the area and the absence of significant competition within a five-mile radius. Furthermore, Greff said that the player base within a three-mile radius will be higher than that for billion-dollar-plus Red Rock Resort, giving him confidence of a 15%-20% return on investment. Way more bang for the buck! Station owns 73 acres at the site but intends to sell 23 of them off to a residential developer. (One of the mistakes that dogged Aliante Station was building it where the population wasn’t.)
Station also looks forward to breaking ground on a $400 million tribal casino in Madera County, California (a saga in itself), but the National Indian Gaming Commission is still reviewing the pertinent paperwork. However, Station continues to pull back from Reno (despite favorable economic conditions), making noises about real estate sales up there and in the Vegas Valley. With the Oakland Athletics shopping for a new market—or at least claiming to–and Station’s vast land bank, could the critical mass be assembled for a stadium? Let’s hope so. But we digress. Station shareholders can anticipate a dividend, not least because les freres Fertitta own 54 million shares between them. Overall, Greff was “incrementally positive” about Station, given Las Vegas population growth and not least because the newcomers are “comprised of higher income population … We think this makes the LV Locals market advantaged over other U.S. driver-to non-Nevada regionals casinos.” Just don’t expect a buffet.
Among the other announcements made during the Station confab was that its casino floors at six properties had been allowed to go to 100% capacity. Such is also the case at Boyd Gaming‘s nine operational Clark County casinos, although their non-gaming areas are capped at 80%. The news came as Gov. Steve Sisolak (D) relaxed portions of the state’s mask mandate. While Sisolak still requires unvaccinated people to wear masks (think of them as a badge of shame), the Nevada Gaming Control Board ran up the surrender flag earlier today. It released a brief statement to the effect that it would neither require nor prohibit casinos from confirming whether patients had been vaccinated, although their signage should still reflect the latest Centers for Disease Control guidance, in which case it should be written on a whiteboard. Also, if licensees feel CDC policy is too lax, they can have more stringent guidelines of their own. The NGCB got it half right.
Nice to know that. Because in the rush to get back to ‘normal,’ some properties are acting as if there were never a pandemic in the first place. Case in point, Silverton. Mask mandates and social distancing are being abandoned on its casino floor. Gone are plexiglas dividers between slot machines and at gaming tables. President Robert Kunkle seems to think this Coronavirus thing is so yesterday. We’re still in a pandemic, man! People are still dying out there—but let’s not remind our customers, shall we? God forbid that their fun should be tainted with reality.
Sports betting in Michigan hit a slow patch in April, falling below $250 million in online handle. Books came within $100K of that benchmark but couldn’t quite hit it. (March wagers were $359.5 million.) Overall handle was $274 million, of which operators kept $20.5 million—or would have without heavy promotions which reduced revenue to $11 million. Gov. Gretchen Whitmer (D) had better give up looking to sports-betting taxes as a way to fund infrastructure: The state collected a mere $312,824. FanDuel/MotorCity Casino led with $74 million in handle and $7 million revenue. DraftKings/Bay Mills Indian Community posted $61.5 million handle and $3.5 million while BetMGM recorded handle of $55 million and revenue of $5.5 million. Also-rans of note were Barstool Sports/Greektown Casino ($25 million handle, $1 million revenue) and nobody else, as all remaining OSB providers are recorded peanuts for revenue or lost money outright.
I-gaming generated revenue of $95 million, led by MGM Grand Detroit‘s $37 million, followed by FanDuel’s $14 million and DraftKings’ $14 million. Tax receipts were considerably more impressive than for sports betting ($7 million from MGM alone). “Sports betting gets the lion’s share of attention, but it will take years for Michigan’s sportsbooks to reach the kind of revenue that online casinos are already producing,” noted PlayUSA analyst Jessica Welman. “In addition, online casinos aren’t susceptible to the same seasonal ebbs and flows like sports betting. That said, $1 billion in less than four months of online sports betting is no minor feat either.”
In Colorado, meanwhile, sports betting handle has surpassed $2.3 billion in its first year of play. Division of Gaming Director Dan Hartman said it “exceeded our expectations, especially after we launched amid a worldwide pandemic that shuttered the casinos, the industry and Colorado.” That translates to $148 million-plus in revenue for OSB providers and casinos. Not at all bad.
Virgin Las Vegas is making its virgin entertainment offering, starting May 19, and it’s a decidedly morbid one. Entitled 27, it’s a tribute to musical artists who left this vale of tears at that tender age. Those saluted will include Kurt Cobain, blues legend Robert Johnson, Jimi Hendrix, Janis Joplin, Jim Morrison and Amy Winehouse. Considering that a plurality of them succumbed to drug abuse, the musical might as well be titled Just Say No. Because if the likes of Hendrix and Winehouse had been able to do that, they might still be enlightening us. Anyway, Virgin’s ghoulish salute—15 years in the making—”culminates with the artists all performing together on one stage in a rock concert like no other.” Tickets start at $65 and even six-year-olds can be admitted. Is the really a show for the tykes? Perhaps ‘family friendly’ Vegas has gone a smidge too far.
Jottings: Don’t bother running for mayor of Atlantic City. It’s been officially confirmed that state control of the burg will continue for another four years … Rivers Casino Schenectady and three other upstate gambling halls owe New York State nearly $18 million in unpaid oversight fees. The state Comptroller’s office came to that conclusion a year ago and the quartet of casinos still hasn’t ponied up. “The Gaming Commission must do a better job staying on top of New York’s ever-expanding gaming footprint. The commission should collect all oversight charges that casinos are supposed to cover,” fumed Comptroller Thomas DiNapoli … Get a vaccination, get a lottery ticket potentially worth $1 million. That’s the incentive enjoyed by five Ohio citizens (Kentucky has incepted a similar promotion). It was the brainstorm of Gov. Mike DeWine (R), who said, “Now, I know that some of you are now shaking your heads and saying, ‘That Mike DeWine, he’s crazy! This million-dollar drawing idea of yours is a waste of money.’ But truly, the real waste at this point in the pandemic—when the vaccine is readily available to anyone who wants it … is a life that is lost now to Covid-19.” Amen … There’s a new bidder in the scrum over Crown Resorts. Rival operator Star Entertainment Group has proposed a merger at $10.90/share, bettering Blackstone Group‘s latest tender of $9.60/share. The takeover bid would value Crown at $6.5 billion
If the Oakland Athletics are ‘shopping for a new market’ perhaps they could go back to their ‘roots’ as the Philadelphia Athletics. Better yet, Atlantic City has a failed & vacant baseball stadium. It only failed 2X, remember three times might be a winner.
Station Casinos owns the old well-worn Wild Wild West casino at Tropicana Avenue and Dean Martin Drive which could be a possible home for a new baseball stadium for the Oakland A’s. I think Station Casinos has at least 70 acres of land there so there is plenty of room for a new baseball stadium.
The Oakland A’s would be a boon for Las Vegas, 81 home games a year, and they amazingly field a competitive team year after year despite the fact that they trade away any player wanting to get fairly paid. There is plenty of desert land to build a new stadium. This move would infuse the team with money, this is a perfect situation for both entities, I fully expect this deal to be made…