Further growth projected for Vegas; Arizona sports betting upheld

As we await tomorrow’s reopening of Main Street Station, a set of projections comes from Deutsche Bank analyst Carlo Santarelli that should have Las Vegas casino owners rubbing their hands with glee. Mind you, Santarelli might be erring on the side of caution: He expected Las Vegas Strip casino winnings to rise 5% in July and they vaulted 46.5%. Nevertheless, he foresees 26% Strip growth (up from a previous 14%) once last month’s earnings are tallied. Elsewhere he sees a deceleration in the fevered pace of gambling revenue. Vegas locals will be up, but by just 6.5%, Missouri should be up 7%, Indiana will gain 14% and Ohio will boom 19%. The one area of implosion will be Louisiana, down 19% and the explanation is quite simple—Hurricane Ida. “While July GGR trends, helped in part by a favorable calendar which included two extra weekend days, were robust across all markets in terms of their rate of change relative to 2019, we expect August trends, as the calendar dynamic reverses, to show a deceleration,” Santarelli explained.

The Las Vegas Strip gain is particularly impressive when one considers that Santarelli models visitation to be 2% lower than 2019 (mask mandates clearly aren’t scaring off gamblers). What volatility there will be is expected to be seen in high-end play. Foot traffic was 26% lower than two years ago but spend per visitor is way up, +43.5%. Also, revenue numbers should be boosted by end-of-July slot coinage that, due to an accounting quirk, will be reported as part of August. Given a Strip awash in money, is it any wonder that Blackstone Inc. is actually finding takers for an above-market-price offer of The Cosmopolitan of Las Vegas in a climate of irrational exuberance? Vegas isn’t the only state where players are living large. They’re spending 44% more per visit in Missouri, 43% in Ohio, 33% in Louisiana. These days it not only pays to be on the Strip but just as much, if not more, to be heavily into regional action.

A revived Strip doesn’t mean more jobs for Las Vegas. In fact, it means 70,000 fewer. We shouldn’t be shocked. Companies have been bragging on investor call upon quarterly report about how they’re experiencing boss cash flow thanks to deep cost cuts. Wall Street loves and rewards this, so why should they change? There are exceptions, like the El Cortez, which nobly offered all furloughed workers their jobs back, although some former employees cited Covid-19 fears and declined to return. Others, like Michael Gaughan, are blaming the Great Unwashed for being shiftless and lazy. Economist Jeremy Aguero has an uncharacteristically gloomy forecast, telling the Las Vegas Review-Journal, “Some of the jobs that were displaced are jobs that are just not going to come back. Within the hospitality sector, the vast majority will come back. But not every job will come back or look the same.” For workers, the good old days may never fully return.

Sports betting in Arizona is a go. The Yavapai-Prescott Indian Tribe lost a lawsuit seeking to enjoin books from taking bets, claiming that the enabling legislation was inherently flawed. Their argument was that a 2002 constitutional amendment codifying the types of gambling allowed in Arizona precluded sports wagering, which could only be approved through direct vote of the electorate. “How you can say that Proposition 202 has not … been undone here, when it exorbitantly expands gaming in the state of Arizona not only within reservations but off it. It is very strange to me and is not right,” contended tribal lawyer Nicole Simmons. “The court presumes the statute is constitutional, will uphold it unless it clearly is not, and prefers interpretations favoring constitutionality,” ruled Judge James Smith, in a special Labor Day hearing.

The Yavapai-Prescott may have been motivated by sour grapes. They haven’t signed a new compact with Gov. Doug Ducey (R) and thus aren’t eligible for sports betting. “They are asking you to treat HB 2772 as though it set their casinos on fire,” said state’s representative Patrick Irvine. Indeed, when asked to quantify the financial damage of not getting sports books, Simmons couldn’t. The state found allies in the Tonto Apache Tribe of Arizona and Quechan Tribe of the Fort Yuma Indian Reservation, both of which won OSB licenses. The position of the defendants’ position was that “millions and millions” of dollars would be lost if sports betting were not incepted this week and Judge Smith seems to have agreed.

If you’re going to be malingering from work, don’t do it at a Las Vegas Raiders game. A Bay Area man texted his employer, saying “Hey boss I need the day off today. Not feeling well.” So poorly did he feel that he had to go to Levi’s Stadium to watch the Silver & Black play the San Francisco 49ers. But his boss had ultra-HDTV and spotted the goldbricker in the crowd. He texted, “Looks like you have a twin … Caught you in 4K!” Whoops. No word if the lazybones still has a job.