There are signs that the regional gaming recovery is cooling (Missouri was up just 1% last month) but Indiana‘s August numbers, while not as hot as July’s, were a balmy 10% higher than 2019 as casinos grossed $203 million. Horseshoe Hammond lost a percentage point but retained the top spot with $33 million. Closing fast is Hard Rock Gary, with $30 million, while Ameristar East Chicago gained 9% to hit $21 million. Blue Chip, off to the east, sagged 11% to $12 million. Further to the south, Boyd Gaming saw even greater misfortune at Belterra Resort, plummeting 29% to $7 million. Also hard-hit was French Lick Resort, falling 26% to $6.5 million. Other revenue-negative performers were Rising Star, minus 6% to $4 million and Hollywood Lawrenceburg, down 11% to $14 million. In its last month as a Caesars Entertainment property, Caesars Southern Indiana was up 5.5% to $19 million, while Indiana Grand jumped 13% to $24 million and Harrah’s Hoosier Downs grew 12% to approach $19 million. Bally’s Corp. had a good first month at Tropicana Evansville, up 5% to $13.5 million.
As for sports betting, $215.5 million in handle boiled down to $17 million in revenue. FanDuel garnered $5 million and 30% market share against DraftKings‘ $4.5 million and 26% share. BetMGM was third with $2.5 million and 15%. Also in the game were William Hill ($2 million/11%) and Barstool Sports ($1 million/7%). In terms of getting the most bang per handle, FanDuel (25% of handle) skunked DraftKings (34%). Barstool also maximized its share of handle, which was 4%. William Hill had 13% and BetMGM 12%.
Wall Street analysts who think that the good times are not only here again in Las Vegas but will never end should be required to read Politico‘s thorough and deep dive into Sin City in the time of pandemic. It depicts (better than we ever could) a tourist town that’s caught between myriad rocks and hard places. It’s trying like hell to return to normality but that damned Coronavirus keeps rearing its ugly head. The situation is made worse by politicians playing games with the virus to serve their own ends. Worst of the worst is Las Vegas Mayor Carolyn Goodman who, by her own words, is either ignorant and helpless or simply pretending to be for fear of having to take a stand. We’d call that a profile in cowardice. She can afford to whistle past the graveyard. Downtown casinos were the only major jurisdiction to see higher foot traffic last month, up 10%. As for Wall Street’s glee at record levels of cash flow being thrown off by Big Gaming, remember this: It’s made possible by Covid-motivated cost cutting that has not abated with the return of business (and the stock pickers know this). As Bob Potts of the Governor’s Office for Economic Development soberly predicts, 50,000 hospitality-jobs may never return. Don’t like “Less Vegas”? Get used to it.
On a happier (for casinos) note, room rates are getting a shot in the arm from Global Gaming Expo. Prices for the Oct. 3-9 period are up 33% from 2019. Midweek ADRs are boosted 28% and weekend rates are 39% higher. Venelazzo (where we’ll be bivouacked) is 38% up midweek and 59% on the weekend. But it’s Wynncore that’s hitting the jackpot, vaulting 70% during G2E and 47% on the midweek. MGM Resorts International properties are just 28% higher on weekdays and 24% on the weekend, while Caesars Entertainment ones are 27% more midweek but 46% greater on the weekend. Speaking of MGM, CFO Jonathan Halkyard admitted that the convention comeback assumed for late 2021 isn’t really happening but assured Wall Street that 2022 would be better in that respect. “We have seen cancellations and others have as well, but at the same time, we’re seeing a near-record lead generation as it relates to group business for 2022,” said Halkyard, who added that leisure travelers were taking up much of the convention slack.
As for recent levels of play on the Las Vegas Strip (including newfound slot enthusiasm among younger players), the CFO continued, “My own view is that it does not represent a long-term change in behavior … there hasn’t been as much entertainment or nightclubs. I’m in the camp that believes some of these behaviors will return to more normalized levels over time. It has been great for operators, because these revenues come at high margins.” As for F&B and entertainment, they’re lagging 2019 levels by as much as 30%. “Our view as things normalize is that earnings will grow, because we don’t yet have what we consider to be an optimal customer mix for profitability for MGM,” confided Halkyard.
Even more interestingly, Halkyard effectively took MGM out of the running for purchase of The Cosmopolitan of Las Vegas. He said the company’s recent, $6 billion haul from property sales would go into three things: 1) room renovations that include upgraded digital technology; 2) funding BetMGM, which is playing a hot hand these days and 3) share repurchases. MGM’s still hung-ho on Japan but plans to underwrite that from free cash flow. He waxed enthusiastic on BetMGM and stressed the importance of first-mover status, and said New York State and California were priorities (albeit prudently refraining from saying which of three California ballot questions he favored).
Trying to turn the page on Hurricane Ida, marketers at Caesars are digging deeply into their databases—and way outside the Gulf Coast market. The above offer was received by a player in Philadelphia, one who’d relinquished their Diamond-level status six years ago. While it risks cannibalizing Pennsylvania business, if it’s a harbinger of a bargain-oriented era at Caesars we’re all for it. Meanwhile, back at Caesars HQ, management was so thrilled with its July and August numbers it released them early. “We continue to see CZR as well positioned across the board for a leisure-based Strip recovery,” wrote Truist Securities analyst Barry Jonas, adding that regional casinos were buttressed against any “reasonable COVID resurgence.” That’s reassuring.
Jottings: On the heels of—shall we say?—disappointing returns in Macao, an unsecured notes offering is being floated by Sands China. The initiative got a gloomy BBB- outlook from Fitch Ratings, given that Macanese gaming revenues are only 35% of what they were in 2019 and not expected to reach former heights for three years hence … Peninsula Pacific got Louisiana regulators’ approval to move a Shreveport riverboat to Slidell. If only it were that easy. Gambling isn’t legal in Slidell yet and a citizens’ vote isn’t even scheduled at this point. Also, P2E’s revenue projections ($153 million) look, well, optimistic … Putting a cuddly face on Resorts World Las Vegas are Stardust, Sinatra and Elvis, robotic puppies who greet guests in the lobby. “As we continue to explore a variety of tech-forward offerings for the property, we were excited to learn about this advanced AI technology and knew it would be a fun added touch for our guests,” property President Scott Sibella told the Las Vegas Sun. You can’t put a price tag on that kind of entertainment … Covid-19 has a silver lining for the Philippines: Record gambling revenues of $761 million, driven by online play. According to PAGCOR Chairwoman Andrea Domingo, most of the action is coming from overseas … Another tribal/private alliance has been struck in Arizona sports betting: Fubo Sportsbook will partner with the Ak-Chin Indian Community to be its service provider. The peripatetic Scott “Woody” Butera has popped up in the middle of the deal as Fubo Gaming president. He goes where the action is … The U.S. Travel Association is caught between urging Americans to vacation, dammit, and supporting a strong public-health regimen. “After Labor Day, we are very concerned about what travel is going to look like for the final quarter of the year. For most people, there are lots of cancellations happening right now,” fretted Chip Rogers, CEO of the American Hotel & Lodging Association. Added travel agency founder Melissa Biggs Bradley, “People have held out for this idea that we’ll get vaccinated and the world will be exactly like it used to be. Everyone in the travel industry realizes this is a long-term thing and everything is a lot more complicated and will remain more complicated.”
Quote of the Day: “Statistics are proving those who are vaccinated are less likely to wind up in the hospital or die due to Covid. Vaccines are a good thing and save lives, but I still believe that the government should be mandating things like this for public-owned property only and lead by example. The private sector should be left to decide for themselves, which you are seeing large responsible companies do already.”—restaurateur Michael Sinensky
Strange times we are living in, the cult of politics is so strong that people are willing to die suffocation deaths to make a “point”. The sooner the stalwarts of the hospitality business realize that proactive measures are needed to keep afloat, the better for them if you ask me. The misinformation stream is continuous, waiting this out is not a viable option, if MGM and Caesars think keeping out of a fray that determines their fate ultimately is prudent, so they do not offend some people, then they deserve their fates…
Since the law allows for “no shirt, no shoes, no service, get out” for privately owned business, they have every right to see if you have proof of vaccination, and demand you wear a mask if not eating. I think the casinos should do that. It will cut down on business, and that is why they will not. Its a shame that people think they will turn into a robot if they get vaccinated. Or that its more important to fight doing something you may not like thinking it tramples on your freedoms. Freedom and democracy also means helping others, and supposedly masks and vaccinations do just that, help keep others from getting it. Nevada had the highest new case count in 8 months recently. Good reason to stay away. As for the high earnings, eventually people are going to get tired of paying through the nose for no or very crappy service, crappy comps, watered down drinks, and dirty rooms. And the high house hold will not last. Eventually the urge to get out of the house will wear off, and customers will become wiser and go where there buck will bring more of everything. Someone on the strip will fix it, lower the house hold, bring back some comps, bring back more workers and get close to the levels of service that existed before Covid, and the rest will have to follow. I see that happening a year after the virus has diminished to the levels of the standard flu season. I am in CA, and I am staying here.