Although comfortably ahead of where they were in April 2019 (+4.5%), casinos in Atlantic City suffered an undeniable setback last month. They slid 6% year/year to $217 million. This came as iGaming (+18%), sports betting (+47%) and OSB handle (+25%) all soared. Cue another round of hand-wringing by the casino lobby, which is finding that having placed its chips on Internet casinos it is suffering at their hands.
Ocean Casino Resort (pictured) got walloped hard, plunging 15.5% to $29 million. CEO Bill Callahan made some loud-mouthed noises when he arrived about taking over the top spot on the Boardwalk. April’s results make him look both arrogant and foolish. Even so, Ocean was looking far better than the Caesars Entertainment threesome, which has fallen upon evil days. Caesars Atlantic City toppled 18.5% to $16 million, putting it closer to grind-joint status than high roller house. Harrah’s Resort plummeted an alarming 25% to $16.5 million, while Tropicana Atlantic City slid 9% to $18 million. Draw your own conclusions. Borgata was both flat and comfortably fat at $58.5 million, while Hard Rock Atlantic City made an impressive runner-up with $41 million (+6%). As for the aforementioned grind joints, Resorts Atlantic City ceded recent gains to fall into last-place standing (flat, $12.5 million). It was barely exceeded by Golden Nugget (-3%) and somewhat more so by Bally’s Atlantic City ($13 million, -5%), of which more anon.
Internet casinos made $188 million, led by DraftKings’ $46 million. What an indignity for the traditional casino operators, beaten at their own game by former DFS providers. BetMGM saved face with $42.5 million, while also-rans numbered FanDuel ($40.5 million) and Caesars Palace Online ($16 million). Hollywood Casino ($3 million) and BetRivers ($7 million) were also in there swinging. Sports betting was most lucrative for FanDuel ($38 million), if rather less so for DraftKings ($19 million). Second place went to upstart Fanatics ($33 million), which could yet prove us wrong about being a serious contender for supremacy. Fighting for fourth place were BetMGM ($5.5 million), ESPN Bet ($2 million) and Caesars Sportsbook (ditto). Nobody else made a dent.
Rudimentary maintenance has become a thing of the past at Borgata, where the new, spare-every-expense regime can’t be bothered to replace broken faucets and lamps. (We have a picture of the latter, too.) If it barely works, why fix it, huh? In other Boardwalk miscellany, Bart Blatstein has made noises about converting 1,000 former Showboat hotel rooms into apartments. (Sic transit gloria Caesars.) The Casino Reinvestment Development Authority wants to get out of the business of underwriting musical events in Atlantic City and, in the Mayor Marty Small (D) scandal, the school principal who refused to reports his daughter’s injuries has been quietly replaced. Smalls himself waived a conference that would appear to be a prelude to indictments and an opportunity to cop a plea. Foolish?
Is Bally’s Corp. so hard up for money that it must cheat its players? The on-its-uppers company made headlines this week by balking at paying a jackpot. The casino and International Game Technology are calling a $1 million hit—you saw this coming—a “glitch.” Scarcely had Roney Beal seemingly struck it rich when security allegedly descended upon her, suddenly gifted with omniscience about the inner workings of slot machines: “When the man came over to talk to me he said, ‘Lady, get it in your head, you won nothing.'” Beal was accused of having caused a “reel tilt,” voiding her jackpot. Pretty convenient, what? A slot attendant then told her to “spin it off,” which would have blanked the winning combination. This time it was Beal’s turn to balk. The tech then further fiddled with the machine, before offering to grease Beal’s palm with $350. (Are lowly slot attendants empowered to pay off customers like that?) Not taking Bally’s conduct lying down, Beal has hired an attorney and wants New Jersey regulators to investigate Bally’s.
IGT is also in the spotlight party because of a suspiciously similar incident at Harrah’s New Orleans. “IGT took the position that look even though aesthetically these symbols came up it wasn’t a win because the computer says it wasn’t a win,” said plaintiff’s attorney Jacques Bezou. Neither a judge nor a jury (nor an appellate panel) were buying what IGT was selling, ordering the slot giant to pay out over $1 million, which is chump change to the behemoth. IGT is clamming up about the coincidence whilst Bally’s is hiding behind the lame-ass excuse that “it only houses the machine.” For shame.
While slightly ahead of 2019 (+2%), Pennsylvania casinos also had a down month in April. They grossed 5% less than last year, $284 million. And even the 2019 comparison is not so rosy, for when expansion is taken into account the Keystone State is 15% below 2019 on a same-store basis. After a certain point, adding casinos is just moving a finite pool of money around, although you’ll never convince tax-hungry politicians of that. The revenue-positive exceptions were noteworthy. Valley Forge Resort rose 4.5% to $12 million, shaming larger Harrah’s Philadelphia ($11 million, -16%). And Lady Luck Nemacolin continues to outperform, leaping 30.5% to $2 million. It’s a small victory but a big vindication for new management. The other gainers were all relatively newbies: Pittsburgh Live ($10.5 million, +8.5%), Hollywood Morgantown ($6 million, +11%) and Parx Shippenburg ($3 million, +12.5%). A newcomer who fared less well was Hollywood York ($8 million, -9%).
Top performers in the state, by a mile, were Parx Casino ($47 million, -3.5%) and Wind Creek Bethlehem ($44.5 million, -2%), real category killers. Thank how much better Parx could be doing if it ever got off the dime about building a hotel, a project that’s mysteriously stuck in ‘neutral.’ Philadelphia Live narrowly won the battle for downtown Philadelphia, $20 million to $19 million for Rivers Philadelphia (-3% vs. -4.5%). Rivers Pittsburgh ($28 million) tumbled 14%, while rival Hollywood Meadows slipped 5% to $16 million. Elsewhere, Mohegan Pocono was off 3% to $18 million, Mount Airy fell 13% to $15 million and Presque Isle Downs was down 1.5% to $9 million. Hollywood Penn National slipped 7% to $14 million, to round out the month.
Internet gambling, by contrast, was very good to the Keystone State, up 26%. iGaming grossed $173.5 million, the prime beneficiaries being Hollywood Casino ($62 million), FanDuel ($48 million) and BetRivers ($30.5 million). Sports betting garnered garnered $59 million on handle of $646 million, although that dwindled after a George layout of $16.5 million in promos. FanDuel was tops with $32.5 million in win, distantly followed by DraftKings‘ $14 million … although nowhere near so distant as ESPN Bet ($4 million), BetMGM ($2.5 million) and Parx ($1.5 million). Neither Caesars Sportsbook nor BetRivers nor anyone else could crack $1 million.
Although it got kicked out of Nemacolin, things are generally looking up for Churchill Downs. Analyst David Katz of Jefferies Equity Research reports that new Terre Haute Casino “seems to be attracting more consumers than initially expected from Indy prior to even opening the hotel” this week. It’s doing a staggering $350 win/slot/day, which augurs extremely well for CHDN quickly recouping its $290 million outlay. No wonder Katz says its needs more parking and soon. In Virginia, the company’s most contentious battlefront, time appears to on Churchill Downs’ side with regard to the legitimization of black-market slots. Katz opines that the situation “is still benign for now. Our impression is that state leadership understands that grey games would need to require full regulation and tax to legalize which suggests it is unlikely a bill will be signed.” Kudos to Gov. Glenn Youngkin (R) for hanging tough on the issue.
Staying in Virginia, the analyst is keen on the prospects for CHDN’s Dumfries slot parlor, even if it doesn’t do as well the Newport News one ($750 win/slot/day is damned near impossible to match). The company is also doing boffo biz in casino-challenged Richmond: $499 slot/day. With numbers like those, who needs a full-fledged casino. Closer to HQ, Turfway Park in Kentucky is reported to be an underachiever, “currently a focus project for management, with expectations for improving the leadership team to enhance the consumer experience and create greater entertainment impact. We believe the latter is needed to compete effectively with the Ohio properties and bring consumers in during all months of the year and not just for the racetrack.” Even so, the Indiana and Virginia numbers strongly suggest, per Katz, that Churchill Downs can bring its leverage below 4X cash flow this year, a development which all would applaud.
Jottings: Say goodbye to The Mirage, which closes on July 17. The transformational casino-resort is itself being transformed by Hard Rock International, which ultimately deemed it impossible to reinvent the place and keep it open simultaneously. Nevada‘s jobless ranks will be swelled with 3,000 Mirage employees, although Hard Rock vows to hire twice that number when it reopens the rebranded property … Remember online poker? Well, Evolution Gaming has and is introducing live-dealer play to New Jersey and Pennsylvania, in a format that allows one to play as many as 100 hands simultaneously and off of five different paytables. Can you manage all that? … Never one to rest on its laurels, the El Cortez is spending $20 million to add a newer, high-limit slot room and a variety of new amenities. In addition to making over 4K square feet of casino floor, another 10K will be added … Keeping up with the Joneses, South Point splurged $6 million on its high-end suites. It’s only 84 units made over but a shrewd, proactive move at a time that Station Casinos and M Resort look to encroach … Inspire megaresort in South Korea helped fuel a $462 million first quarter for Mohegan Entertainment. Even so, getting Inspire off the ground contributed to a $39.5 million quarterly loss … Caesars Sportbook is going into Monmouth Park in New Jersey. The 25-kiosk facility should be ready sometime in 2025.