If there were any lingering doubt that the Nevada Gaming Control Board thinks it works on behalf of the casinos, yesterday’s disgraceful hearing left no doubt. In particular, resident NGCB doofus George Assad threw out his back carrying water for Penn Entertainment. In an unprecedented display, the injudicious Assad basically accused an applicant of perjury. Alleged money launderers have been treated with greater deference by the Control Board.
The matter at hand was a license application by Parag Vora, the person behind activist investor firm HG Vora Capital Management. Vora has clashed repeatedly with Penn CEO Jay Snowden over the latter’s largely hapless online strategies. For this, he drew the wrath of Assad, who accused Vora of being a “corporate raider.” Despite this and other provocations, Vora remained civil throughout the 80-minute kangaroo court, which ended in a tabling of Vora’s application.
What was his crime? According to NGCB Chairman Mike Dreitzer, “aggressive tactics” as a minority investor in Penn. Horrors! Protecting one’s investment? What sauce! Mind you, Penn’s stock has shriveled to a tenth of its peak value, something that worries Dreitzer & Co. not in the slightest. To their minds, it borders on a crime to—brace yourselves—be an activist shareholder and (such temerity!) nominate members to Penn’s pet-rock board of directors.
Mind you, this is the same Penn that paid $700 million for Barstool Sports and then, in a corporate calamity, had to sell it back to verbal terrorist Dave Portnoy for $1 (you read that right) after Portnoy had crashed the value of Penn stock with his trash-talking. That’s $699,999,999.00 down the toilet, plus lost share value. As Vora testified, “We felt David Portnoy, given his background, could be challenging for regulatory bodies. The economics of a deal where you buy a company for $700 million and sell it for $1 is the sort of transaction that shareholders typically don’t approve of … They bought Score for $2 billion, committed another $1 billion for ESPN Bet, and spent about $4 billion on transactions, which have not generated any value. We found that as a shareholder to be a big concern.”
Not to the NGCB. How dare Vora question the wisdom of a publicly traded, dues-paying member of Big Gaming?!?! Indeed, how could he have the nerve to nominate, as reporter Buck Wargo put it, “directors with more experience in online gaming“? This is Penn Entertainment after all. No expertise required! As Wargo, points out, Vora sought licensure in Nevada despite its Penn stake being below the necessary 10% threshold. That didn’t cut any ice with Dreitzer, who stuffily lectured Vora, “you have to prove yourself more to me with respect to your ability to participate in Nevada gaming. A limited license with conditions is a way to do that.” (What must others thinking of applying in the Silver State have thought of this indignant display?)
For Assad, Vora’s particular crime—which the applicant repeatedly denied—was that he tried to take over Penn via “greenmail.” We’ve seen no evidence on the public record of a Vora takeover attempt. And if he did try to buy Penn, so what? It happens all the time in the free market. In fact, Tilman Fertitta and Carl Icahn are both exploring risky, leveraged buyouts of Caesars Entertainment as we speak. Has the Control Board lost one wink of sleep over that? We doubt it.
What Assad did lose sleep over (and not wrongly) was a $950,000 SEC fine of Vora over a failed attempt to wrest control of Ryder Systems. But, unlike the Ryder affair, Vora has not acted the least bit secretively vis-a-vis Penn. His clashes with Snowden have been well-publicized. Perversely, Assad construed Vora’s concern about Penn’s incoherent digital strategy as opposition to iGaming itself. Replied Vora, “Online casinos are where Penn can have a very profitable business, but sports betting is very challenging to compete in when you’re smaller scale.” You’d have to be an Assad-class idiot not to see the well-documented truth of that statement. Just ask the failed and struggling operators (like Penn) who litter the battlefield.
Has Penn been feeding Assad inside information on the sly? He certainly appeared to have been the beneficiary of some private dope, judging by his declaration that Vora was “threatening [the CEO] in 2023 at a dinner in Boston, saying that if Snowden didn’t put his members on the board Vora, would take over the company.” When Vora denied that categorically, Assad escalated, accusing him of wanting Snowden to buy back shares (which would be a reasonable request) and of trying to get Snowden fired (ditto). Again, Vora said no, prompting an umbrageous Assad to say, “Let me remind you, Mr. Vora. You are under oath.” Take a chill pill, George. (In 25 years of covering Nevada gaming, we have never come across such intemperate behavior by a regulator.)
Assad seems to have a peculiarly intimate knowledge of the inner workings of Penn, as when he said Vora was “buying millions of shares of Penn through options and derivative contracts to control those shares in the future, while keeping the percentage under the required amount.” Huffed Assad, “You deprived the shareholders of Penn and Ryder of being able to do a poison pill,” and thereby thwarting a hostile takeover.
We’ve been sympathetic to Vora’s case against Penn for some time. The company’s shambolic online strategy is no secret, nor is its dismal stock price. Vora seems to have acted aboveboard in its approach to Nevada licensure and has, in return, been shabbily treated by a purported regulatory body that recently swept the Resorts World Las Vegas scandal under the nearest rug.
Parag Vora has been raked over the coals. Maybe the NGCB should now be investigating the motives and bizarre conduct of George Assad instead.
Casino revenues hopped 6% in March in Illinois. Newbie Fairmount Park finally started picking up steam, winning $2 million. That what still the lowest gross in the Land of Lincoln but it’s decent money. Of course Rivers Des Plaines was way out front with $44.5 million (2%), dwarfing the Chicagoland competition except for Wind Creek Southland, which vaulted 30.5% to $22 million. New Hollywood Joliet continued to outperform, rocketing 56% to $12.5 million. On the way out, Hollywood Aurora faded 2% to $8.5 million. Downtown, Bally’s Casino slipped 1.5% to $11 million, while The Temporary at American Place was flat, also at $11 million out in Waukegan. Relative newbie Hard Rock Rockford showed signs of maturity, up 2% to $13.5 million, while very mature Grand Victoria gained 6% to $13 million. Aging Harrah’s Joliet stumbled 8% to $10.5 million.
Outstate, the standout performer was Walker’s Bluff Casino, up 10.5% to $3.5 million. Argosy Belle was flat at $3 million and DraftKings Casino Queen gained a point to $8 million. Par-A-Dice (soon with 100% less Peoria) slipped 3.5% to $5.5 million and Harrah’s Metropolis tumbled 12% to $5 million. Golden Nugget Danville was up a point to $4 million and Bally’s Quad Cities rounded out the picture with a 4% hop to $6 million.