Author: David Mckee

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License to Gouge

One of the hottest casinos on the Las Vegas Strip is—believe it or not—Casino Royale. How the humble have risen! The oft-mocked, independent joint was favored by a surprising amount of Sin City customers surveyed by Truist Securities. Out of all the places to stay, 4% said the Margaret Elardi-owned gambling den was their favorite. That’s as many as were partial to Harrah’s Las Vegas, that Strip monument to Stalinist architecture. It also put Casino Royale up there with Bellagio (the choice of 6%) and Caesars Palace (7%), but well behind MGM Grand (11%). Considering that two of those properties are synonymous with price-gouging and bad customer service, you have to wonder if Vegas tourists are masochistic by nature.

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Atlantic City surges, New York stumbles

Long-awaited casinos in New York City aren’t coming out of the starting blocks well. Resorts World New York may have been overhasty in installing table games. Steve Cohen is having a hard time getting his ducks in a row at Metropolitan Park and Bally’s Corp. has no financing yet for Bally’s Bronx beyond the $500 million license fee, plus a $115 million gratuity paid to Donald Trump. Bally’s may be the lucky one, as it will have time to study its competitors’ mistakes.

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The Backlash is Here

Every weekday our routine begins with a scan of the top 150 gambling and sports betting stories on Google. It can be a depressing task, given the mounting tide of articles and opinion pieces damning Big Gaming for addicting Americans to the thrill of a legal bet. Taken in tandem with some recent legislative actions, it leads to the inescapable conclusion that a backlash against gambling isn’t coming. It’s here.

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A Friend in High Places

UFC President Dana White is finally making a useful contribution to society. The brawl baron has importuned his BFF Donald Trump to do something to reverse the recent tax imposition on gambling losses. You will recall that not only are 100% of winnings taxable, now 10% of losses are too. We can thank Sen. Mike Crapo (R) for that financial sodomization of players, snuck through a sleepy Congress. (White’s well-reasoned letter can be found here.)

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Regional Casinos Remain Potent

Casino revenues hopped 6% in April in the Free State. It was driven by a 19.5% surge in table winnings, as slots were flat. MGM National Harbor led the way with $74 million, up 8%. Horseshoe Baltimore slipped 3% to the mediocre $15 million per month that is this misbegotten casino’s destiny. Maryland Live was up 7.5% to $63 million. Ocean Downs gained 5.5% to $8 million but Hollywood Perryville ceded 4.5% to $7.5 million. Rocky Gap Resort continued to turn it around, up 7% to $4.5 million.

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War & Wynn

So far, Wynn Resorts has been unscathed by chaotic situation in the Persian Gulf and the Straits of Hormuz. Until now. Last week, Wynn bowed to the inevitable and postponed the opening of Wynn Al Marjan (pictured), its Mideast pleasure palace. Building a casino megaresort in the middle of a war isn’t for the foolhardy. To try and open one during hostilities would reek of hubris or insanity. Meantime, Wynn is going to double down on Macao, which is rarely a bad idea. It has slated construction of The Enclave, a 432-room hotel adjunct to Wynn Palace. The $950 million project should be ready by the end of 2028, or at least in time for Chinese New Year soon afterwards.

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The Big Boys: Caesars, MGM & Station

Coming in slighty ahead of Wall Street‘s expectations, Caesars Entertainment delivered cash flow of $887 million in the first quarter. (The Street anticipated $883 million.) J.P. Morgan analyst Daniel Politzer attributed the beat to “modest upside,” both online and in vexed Las Vegas. Caesars’ bread and butter, its regional casinos, were merely in line with forecasts. And management was keeping mum on the possibility of a Tilman Ferttita takeover or an insider LBO.

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Strip erupts in March

After over a year of being down, down and down some more, the Las Vegas Strip snapped back to life in March. There was a stunning, 14.5% vault upward on the Strip, reaching $780 million. Nor was the good news confined to Las Vegas Boulevard South. Casinos in Downtown exploded 21%, achieving $103 million. And the Boulder Strip leapt 14.5% to $99 million. Not to be left out, miscellaneous Clark County was up 7% to $175 million. North Las Vegas did get left out, flat at $261.5 million and gamblers seem to have bypassed Vegas Lite Laughlin in favor of the real thing: It only gained a point, to $50.5 million.

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Good news for Churchill, Boyd & Penn

In a coup that did not take Wall Street completely by surprise, Churchill Downs revealed last week that it had obtained the IP rights to the financially troubled Preakness Stakes. This gives CHDN control over two of the three legs of the Triple Crown. For $85 million, Churchill Downs gets the Preakness and Black-Eyed Susan Stakes, as well as 2% of handle therefrom. The state of Maryland remains in control of the track, in which it plans to invest $400 million. “In short, CHDN will generate fees from the Preakness and Pimlico under new state operation, with little formal operating influence, although, given the state’s intended investment of $400M to reposition the track, we expect CHDN to be involved,” summarized Jefferies Equity Research analyst David Katz, noting the obvious synergistic benefits to owning both the Kentucky Derby (which continues to prosper) and the Preakness.

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MGM on the Spot; Ups and Downs

Millionaires make unlikely vehicles for sympathy. But realtor and sports agent Dwight Manley has our ear. He’s currently fighting an uphill battle against MGM Resorts International, which separated him from $3.5 million back in 2021. Although Manley is only suing for $75K or so (walking-around money for $16 million CEO Bill Hornbuckle) and has paid most of his debt to Leo the Lion, MGM is digging in its heels. It’s tried to have the case tossed, but the judge found that there was sufficient evidence of potential wrongdoing to proceed to trial. And these are matters which need to be hashed out in a courtroom.

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