After all the hype and hoopla of Formula One in November, the real story may be December. Las Vegas Strip revenue alone was $905 million, an 11% leap from 2022—and a 53% moonshot over 2019. Similarly, locals winnings of $241 million were up 7% from the previous December and 10% higher than in 2019, while the statewide tally ($1.4 billion) vaulted 35% from 2019 … heretofore considered the Good Old Days.
Wall Street analysts are fretting whether this can carry into this year and next but, let’s face it, Big Gaming has had an awfully good run post-lockdown. If it cools off a bit that’s hardly cause for panic. Strip numbers last month were helped by tight holds and baccarat in particular (22%). Casinos cleaned out the whales at baccarat, as win catapulted 50% on 18% more wagering. Tables were up 20% on 26% larger betting. Slots ($446 million) were up 10% on 9% more coin-in, just keeping ahead of increased play. We won’t get into the 2019 comparisons save to say they were mind-boggling, especially on baccarat (+197%).
Laughlin missed out on the fun, being down 2.5% to $31.5 million, while North Las Vegas was becalmed at $25 million. Downtown jumped 10% to $76 million, Boulder Strip casinos climbed 6% to $68 million and miscellaneous Clark County hopped 8% to $148 million. Mesquite was up 3% to $16.5 million and like city Wendover jumped 14% to $25.5 million. Reno absorbed a blow, down 7% to $55 million but Sparks was up 6% to $15 million and Lake Tahoe brought in $16 million, a 3% improvement.
Getting a double dose of good news this week was Wynn Resorts, which enjoyed a boost from Fitch Ratings, bestower of a BB- rating on Wynn bonds. The next day, J.P. Morgan analyst Joseph Greff lifted his price target on WYNN shares to $113 apiece, from $104. He also upped his cash-flow estimates for the company’s casinos. Whereas he previously had Wynn’s Macao casinos at $278 million in cash flow for 4Q23, he raised that to $291 million, similarly moving his projection on Wynncore from $229 million to $240 million. “Our estimate change is underpinned by our belief that the luxury segment in LV is the best performing tier in that market and likely benefitted the most versus its LV Strip peers from the F1 in November (which now feels so long ago),” Greff wrote.
He continued that Macao-facing companies like Wynn had underperformed the gaming group at large over the past year, “which we attribute to apathetic investor sentiment that emphasizes China macro/geopolitical risk over healthy Macau fundamentals.” But the one-two punch of the Super Bowl and the Chinese New Year creates an attractive environment for Wynn, as high-consumers remain inclined to spend.
That tromping sound you hear is the Culinary Union steadily marching through Las Vegas‘ secondary and independent casinos, as they gradually fall into line with the new collective-bargaining agreement assented to by the Big Three. First to capitulate was The Strat, whose leadership had the clearest crystal ball back when labor talks were going down to the wire. Golden Entertainment was followed in quick succession by Hilton Grand Vacations. Although Circus Circus struck a deal on Jan. 27, sister property Treasure Island didn’t sign on the dotted line for another three days. It would be interesting to know what Phil Ruffin‘s sticking point for the newer casino was. Succession clauses, perhaps? Ruffin has reportedly been mulling a resale of the pirate-themed property, which he captured for a bargain $770 million during the Great Recession. Latest to come to terms—and the first in Downtown—was the Plaza Hotel, which evidently wasn’t willing to push things to Friday’s strike deadline. That still leaves 10 casinos and some ornery owners (Tilman Fertitta, anyone?) to convince before Friday morning. Piece of cake, right?
“We are all happy to be here, because if you are in Atlantic City, outside the casino is scary … It’s true. There’s a lot of [expletive] going on out there, right outside these doors. In here it’s all together, but out there is a lot of shit going on.” That’d be singer Rob Thomas of Matchbox 20 running down the Boardwalk while in the midst of a performance at Hard Rock Atlantic City on January 13. Let’s hope Thomas’ enthusiasm isn’t shared by casino patrons. Some younger blood would be particularly welcome: Our Atlantic City bureau reports that “I would say that things were jumping at Golden Nugget, but many of the customers can barely jump off their walkers.”
Speaking of senior citizens, it looks like Frasier Crane is bucking to be the Boardwalk’s resident celebrity. Having already grand marshal of the Winter Wonderland Parade last month, Kelsey Grammer is set to do similar honors for the St. Patrick’s Day parade. Don’t give up your day job, Dr. Crane.
Jottings: Doubling down on its Rhode Island gaming monopoly, Bally’s Corp. incepts online gambling in the state on March 1. It will be a staggered rollout, with live-dealer games available in April and Internet poker still later … Elsewhere in the Bally’s empire, a revised rendering of Bally’s Chicago is already being circulated. This strongly suggests that Bally’s braintrust knew their original design was a no-go sooner than they let on … Genting Group‘s New York State subsidiary, Empire Resorts, is losing money. Solution? Sink another $100 million into the drain. It looks like Genting is playing for time, in hopes that it gets one of the coveted megaresort concessions. Amazingly, after years in the market, Genting is still waiting for Resorts World Catskills‘ “operating performance to realize its full potential” … New York City Mayor Eric Adams (D) got an in-your-face response to his attempt to cut local communities out of aforesaid casino-selection process. Zoning procedures would essentially be deemed null and void in Adams’ dead-on-arrival proposal … In like a lion, out like a lamb. Such was the fate of Kasey Thompson‘s attempt to bring the Bovadas of this world into California to run sports betting. Faced with intense tribal opposition, Thompson quietly struck his flag. We saw that coming from miles away …
Jamming up its customers yet again, MGM Resorts International raised its resort fees once more, despite being almost obscenely profitable. But as long as patrons bend over and grab their ankles rather than take their business elsewhere, do you expect MGM to act differently? “Fees were adjusted to stay competitive in Las Vegas and the gaming/hospitality industry,” straight-facedly claimed KSNV-TV. It now costs an extra $37/night for the sheer privilege of staying at decrepit Excalibur, which probably exceeds the face value of the room … It’s a stampede in Nebraska to get a racino. Latest entrant? Fremont, which wants to add (at least) a seventh track to the six already in operation in the Cornhusker State. Opponents want to see how the economic impact of the first six plays out before green-lighting a seventh … Just what the sports betting industry needs—another doomed-to-fail competitor. Betr plans to expand beyond Pennsylvania and Ohio into Indiana, Colorado, and Kentucky. Players asked, “What’s a Betr?” The blunder-prone company has already pulled out of Massachusetts without ever gaining a foothold … Poor Petersburg. It looks like it’s going to get aced out of the last Virginia casino by Fairfax County. The fix appears to be in at the Lege, which gave Fairfax the preliminary go-ahead … Good news for Mohegan‘s Inspire megaresort. Its hotel received a five-star rating from the Korea Tourism Association. The casino remains silent but it is expected to be licensed by the end of March … Finally, in a sign of progress, a bill has been introduced in the Kansas Lege to ban smoking in Sunflower State casinos. The wannabe law enjoys 10 Republican sponsors and five Democratic ones.
Quote of the Day: “Part of the problem is that today’s executives live in a very small world that is financial quarter to quarter. They understand that eliminating smoking in a casino will affect the next quarter’s results. To avoid this, they parrot the myths and lies, hide, and pay someone to delay the political process and allow the damage to employees and guests to continue.”—Richard Schuetz on the casino industry’s addiction to smoking.