Beating Wall Street expectations comfortably, Las Vegas Sands reported cash flow of $973 million yesterday. Wall Street had expected $939 million from the second quarter while a more optimistic Joseph Greff of J.P. Morgan had projected $964 million. Macao-derived revenues continue to climb, hitting $530 million for 2Q23 (Greff had anticipated $548 million). Mass-market play continues to be Sands’s savior, with premium mass at 93% of pre-pandemic levels while bread-and-butter gamblers have achieved 77% of their prior volume. June was particularly strong for Macao, with a boffo $200 million in EBITDA achieved in the final month of the quarter. However, the Street expects far more from the third and fourth quarters: $617 million and $701 million respectively. Interestingly, while Chinese provinces are still below 2019 visitation numbers, Hong Kong players are all the way back and then some—102% of where they were before a little ditty called Covid-19.
Greff called both Singaporean and Macanese results “generally fine,” albeit not the big surprise that was 1Q23 “and we continue to believe the recovery in both Macau and Singapore should continue.” Looking ahead Sands will have full complements both of hotel rooms and employees. “Between this and our expectation of sequential increases in monthly [gross gaming revenue], reflecting seasonality and a higher mass mix, we see a scenario where LVS gains sequential market share and margins improve.” A lack of Chinese players continues to hinder Singapore, where Chinese passenger loads are still well below the pre-Covid days. Since China accounts for 25% of Marina Bay Sands cash flow, that is a problem.
Over at Deutsche Bank, analyst Carlo Santarelli was less enthusiastic than Greff: “With expectations likely having crept higher, it is possible that trading activity could provide an opening for longer-term investors to accumulate the shares on any weakness, given our view, that little in the report changes the outlook in a material way.” He noted positively that retail income increased 6% quarter-over-quarter and that Sands had 32% of mass-market share, which would put it well out in front in Macao. He also noted several key metrics with respect to Singapore: Mass-market table win is 29% higher than before Covid, Changi Airport has reached 80% of pre-pandemic volume, non-gaming revenue is up 25% from 2019 and hotel revenue 12%. Wall Street may have its skeptics but we continue to place our faith in Sands.
If Sands was modestly impressive, U.S. tribal gaming broke out in a big way last fiscal year. It improved 5% to reach $40.9 billion, an all-time revenue record for Native American casinos. One of the eight regions defined by the National Indian Gaming Commission was down from FY2021, namely Sacramento, despite an infusion of new product. Spreading the wealth, 55% of aboriginal casinos were modest earners, generating less than $25 million apiece. Particularly impressive was the Phoenix area, up over 15% from 2021. Keep up the good work, guys.
Helped by an extra weekend day, Pennsylvania casinos were up 3% last month, reaching $278 million. Despite a 5% decline, Parx Casino retained top-dog status with $46 million. Second in the crowded Philadelphia market was Philadelphia Live, up 3% to $20 million, besting Rivers Philadelphia‘s $19 million, despite a 16% surge at the latter. Harrah’s Philadelphia faded 13.5% to $12 million, coming within striking distance of Valley Forge Resort, up 9% and just a hair under $12 million. Best of the regional properties by far was Wind Creek Bethlehem, whose $42 million represented a 2% gain. In the Pittsburgh area, Rivers Casino retained primacy with $27 million but ceded market share (-3.5%) to Hollywood Meadows ($17 million, +13%) and Pittsburgh Live ($10 million, +22.5%).
Even piddly Lady Luck Nemacolin ($2 million) saw a 5.5% revenue increase, a last hurrah for Churchill Downs. Elsewhere, Mohegan Sun Pocono slipped 4% to $17.5 million and Presque Isle Downs hopped 2% to $9 million. Hollywood Penn National was up 1.5% to $14 million and Mount Airy climbed 6% to an impressive $16 million. Among the satellites, Hollywood York hopped 13.5% to $7.5 million, Hollywood Morgantown leapt 21% to $5.5 million and newbie Parx Shippensburg eked out $2.5 million. Anybody get the feeling that the good satellite markets have been taken?
Keystone State sports betting revenues were $34 million (less $11 million in hefty promotions) on wagering of $373 million. Internet casinos were more lucrative, bringing home the bacon to the tune of $135.5 million. The catchall Penn Entertainment license was predictably dominant with $58 million. Former favorite son BetRivers was elbowed aside by FanDuel, $27 million to $28 million.
Illinois sports books scored $89 million in revenue in May, on handle of $822 million. That’s a 32% gain from last year. Market leaders were FanDuel ($36.5 million) and DraftKings ($26 million). BetRivers posted $9 million, PointsBet $6 million, Caesars Sportsbook $4 million and Barstool Sports $2.5 million. Nobody else was even remotely on the radar.
Tomorrow is the opening of Oppenheimer but also something more important—the debut of The Soup Spot at Ocean Casino Resort. It will be hosted by celebrity guest Larry Thomas, better known as the Soup Nazi on Seinfeld. Be there by 3 p.m. Congrats, Ocean, on five years in business. How time flies on the Boardwalk.
New Unite-Here Local 54 prexy Donna DaCaprio wasted no time planting her foot firmly in her mouth. Deaf to the life-or-death concerns of casino dealers and others about secondhand smoke DaCaprio called the elimination of smoking in Atlantic City casinos a “suicide pact.” This heavy-handed attempt to sway New Jersey lawmakers met with fierce brushback. United Auto Workers regional director Daniel Vicente blasted, “Scare tactics about job losses fall flat, especially as Atlantic City casinos can’t even fill the jobs that exist right now. We know casinos that end indoor smoking benefit from lower costs for cleaning, fewer employee sick days and a more appealing environment for the nearly 90% of people who don’t smoke. Any union that fights this is not working in the best interests of its members.” Indeed, if hyperbole is going to be the order of the day, DaCaprio could be said to be marching her own troops to the gas chambers.
The Ocean anniversary video was great! A little long, but pretty cool.