Atlantic City, Massachusetts make big gains; Hotel misery

Casino executives in Atlantic City continue to plead poverty (to a dwindling amen corner) when it comes to poisoning their employees with secondhand smoke. In the meantime, they’re pocketing business hand over fist. Last month saw a 43% catapult over February 2021. And even when compared to supercharged 2019, casino revenues were still 8% higher. The Boardwalk grossed $212.5 million, $154 million of that from slots on 7% higher coin-in than three years ago. Table games contributed $57 million, and both slot and table winnings accelerated from January.

Except for the Tropicana ($17 million, +8%), all casinos were up by double digits from last year. Borgata was business as usual: $53 million and a 43% jump. As one would expect, the biggest percentage gainers were Hard Rock Atlantic City ($37.5 million, +58.5%) and Ocean Casino Resort ($30 million, +58%) but Bally’s Atlantic City posted strong comparisons too ($11 million, +54%), despite being in last place. It lagged the Golden Nugget ($13 million, +48%) and Resorts Atlantic City ($13 million, +44%) among the grind joints.

Although the Caesars Entertainment threesome continues to shrink in significance, two of its casinos posted double-digit gains as Caesars Atlantic City ($19 million, +43.5%) and Harrah’s Resort ($20 million, +31%) ascended from 2021. As for the 2019/22 comparison, we could have called it blindfolded: Everybody—especially the Trop—is losing market share to Borgata, Hard Rock and Ocean. Is it any coincidence that the newest casinos are the ‘haves’ and the older, smokier ones the ‘have nots’?

Sports betting revenue fell 33% from last year on handle of $985.5 million, as books kept $31 million, led by FanDuel‘s $14 million (with some help from PointsBet and Superbook). Some terrestrial books got their clock cleaned, especially Borgata’s, out nearly $2 million. Internet gambling remained a reliable source of revenue, bringing in $130 million. Super Bowl-related sports wagering generated $144 million in handle, dwarfed by $503 million wagered on basketball. PlayUSA analyst David Danzis said that there was “only a modest impact from New York’s entry into the online sports betting space. That is a cause for relief for those that are heavily vested in the success of the state’s industry, including the state itself.” You better believe it.

Sports books in Michigan performed more impressively than those in the Garden State, revenue-wise, keeping a higher percentage of handle. They booked $21.5 million on action of $424 million. Unfortunately, all that money went straight back out the door and them some, as books squandered $26.5 million on promotions. Online market share was led by FanDuel with 31%, then DraftKings (24%), BetMGM (22%), and Caesars Sportsbook (9%) and Barstool Sports (7.5%). BetMGM got the most bang for its buck with 26.5% of online revenue share, then FanDuel (21%), Barstool (20%), DraftKings (18%) and Caesars (7.5%), with Barstool perhaps being the obnoxious little engine that could.

Internet casinos again proved a more reliable source of revenue for the state, grossing $123 million, continuing gentle momentum into the new year. MGM Grand Detroit dominated with 38%, followed by DraftKings, well behind at 16.5%, as were FanDuel (16%), Caesars (4%), WynnBet (3.5%) and Barstool (3%). Judging by the MGM numbers, it is much easier to convert casino players into sports bettors than for books to reinvent themselves as casinos.

Gaming fever continues in Massachusetts, where last month was 27% higher than February 2021, moving up 4% from this January. Encore Boston Harbor grossed a whopping $55 million, leaping 33.5%. Plainridge Park, of course, isn’t doing as well as in the palmy, pre-Wynn days of early 2019. But it climbed 14.5% to $11 million. As for MGM Grand Springfield, it raked in a respectable $20 million, up 18%. Sports betting remains bottled up in the Lege, so the commonwealth will have to look on in envy as dollars flow to neighboring states.

Yes Virginia, there is money to be made from online sports betting. OSB giant FanDuel actually posted a profit last year, according to parent Flutter Entertainment. OK, so it was a teeny-tiny amount of black ink, some $14 million, but it’s a start. Next up, if all goes according to plan, would be BetMGM, projected to get out of the red by the end of this year. (DraftKings, you may recall, is on track to become revenue-positive in 2028.) According to Flutter, the bounty reaped in New Jersey, Pennsylvania, Illinois and Indiana is more than offsetting startup costs in states like Arizona. How are other Flutter brands, like FoxBet, doing? Eh, not so hot. But the firm predicts they’ll be ROI-favorable sometime next year. New FanDuel CEO Amy Howe came along too late in 2021 to take full credit for the results but they bolster her case that OSB can be run in a cost-efficient manner.

If you’re planning to stay at one of Las Vegas‘ many Marriott-flagged hotel properties, keep it short. The pinchpenny chain is cleaning rooms only ever six days. Other chains are better … but not much. Having witnessed the benign-neglect housekeeping policy firsthand while in Chicago, I have to agree wholeheartedly with Unite-Here prexy D. Taylor, who says, “Guests don’t want to have to ask every time they need their trash emptied or dirty towels replaced. Without cleaning, what stops a hotel from being just a more expensive Airbnb?” Yes, there’s a labor-shortage component, but the crux of the issue seems to be a mix of cost containment and profit-margin augmentation. So when you find yourself in a dirty hotel room, just remember the sacrosanct phrase, “Maximizing shareholder value,” the altar upon which customer service goes to die. As Hilton Hotels CEO Christopher Nassetta assured investors, “When we get out of the crisis, those businesses will be higher margin and require less labor than they did pre-Covid.” Up yours, Chris.

Jottings: Good news for Hoover Dam. The water level in Lake Powell has fallen so low that it is raising doubts on Glen Canyon Dam‘s ability to generate power. That has led to proposals to decommission the upstream dam and let the Colorado River water flow unimpeded to Lake Mead, where it would provide more fodder for boaters and hydroelectricity alike. Lake Mead is currently at a crisis level of 1,064 feet … Legislation has been introduced in Pennsylvania to go smoke-free in the Keystone State’s casinos. If the New Jersey domino topples, can Pennsylvania be far behind? We hope not … Last but hardly least, Tilman Fertitta is rumored to be planning a Las Vegas Strip casino where Tex Mex Tequila Bar & Grill currently stands. It would be the highest and best use of the site, even if it would tax Tilman’s ingenuity to cram a megaresort into eight acres, less space than The Cosmopolitan of Las Vegas. Until Circa came along, Fertitta’s Golden Nugget was the pacesetter of downtown Vegas. His presence on the Strip (which wouldn’t use the Nugget brand) would surely make his new rivals up their game.