Author: David Mckee

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East Coast report; “Best growth story in gaming” is who?

As we rummage through our mailbag, we find a number of dispatches from our East Coast correspondent, who recently helped prop up the Golden Nugget in Atlantic City with a three-night stay. He was drawn by a giveaway at Ocean Casino Resort (above): “They were having this odd gift of an ‘outdoor folding stool.’ Of course we had to have one. This week Boscov‘s (regional department store) had this ad showing the true value of the item: $4.99, with making a $15 purchase. I never knew the Illitch Family was so generous.” Throw in a mingy $30 of free play and it’s still not a George offer. That’s not how you get to number-one status, Ocean.

Speaking of promotions, Bally’s Atlantic City is touting “another free dinner at Guy Fieri’s, and a ‘meet and greet’ with someone from the Godfather film with drinks and prizes, including five violin-shaped vodka bottles.” That throws down the gauntlet to the Nugget, which is responding with “a ‘cocktail party’ with drinks and prizes (but no food). I can understand with the high price of food and ‘supply chain issues’. Perhaps Tilman Fertitta could ask Golden Nugget’s employees to go to some ‘food pantries’ and try and get some food for Nugget’s Elite level players.”

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A Dream deferred; Lost Virginity; Tennessee tax trouble

Don’t look now, Las Vegas but we may have another failsino on our hands. Construction has ground to a total halt on Dream, the south-Strip resort project that looked like a sure thing not so long ago. Developer Bill Shopoff is as much as $30 million in hock, stalling work on Dream. Shopoff is evidently renegotiating with his principal lender, for reasons undisclosed. (Cost overruns?) With a budgetary cap of $575 million, Dream has been proceeding so far from cash on hand, leaving it $400 million-plus short of the finish line. That’d require a “bridge loan” big enough to span Long Island Sound.

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Pennsylvania up; Arizona blunder; Über-Mega-Jottings

At $277 million, Pennsylvania casinos were 2% higher in February than last year, although a 12% declivity from go-go 2019 is further indication of a slowing recovery in gaming. Then again, after having reached record altitudes last year, how much higher can the industry go? Sports betting activing was flat at $599.5 million handle, which boiled down to $62 million in revenue, $43 million after promotional giveaways. As measured by handle, BetMGM is getting the least bang for its buck, spending 7% of handle for a 7% market share. Most efficient was Barstool Sports, laying out 2.5% of handle for a 6% share, closely followed by Caesars Sportsbook. Internet gambling was way up (29%) to $131.5 million. The catchall Hollywood Casino license, embracing three providers, brought in $56.5 million. BetRivers accounted for $26 million, surpassed by FanDuel‘s $27.5 million.

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Atlantic City up, Louisiana down; Steve Wynn’s revenge

Gambling revenues inched upward in New Jersey, plus 1% statewide, mainly driven by Internet casinos (+9%). In Atlantic City, slot winnings rose 3.5% to ($159 million) on 4% more coin-in but tables slipped 4.5% to $54 million as wagering dipped 1%. The comp-sweating Golden Nugget tumbled 14% to $11 million, tightening its stranglehold on last place, well behind Bally’s Atlantic City ($12 million and an impressive +14%) and Resorts Atlantic City ($12.5 million, -2%). Borgata put even more distance between itself and the competition, up 9% to $57.5 million. Hard Rock Atlantic City was flat and way back at $37.5 million. Ocean Casino Resort slid 11.5% to $26 million. Does the Illitch Family still fantasize about having the top casino in A.C.? That leaves the Caesars Entertainment triumvirate, led by Harrah’s Resort‘s $21.5 million (+8%), lagged by Caesars Atlantic City ($19 million, +1.5%) and the Tropicana Atlantic City with $17 million, flat in February.

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Massachusetts soars; The Strip meets The Street

Gambling win in Massachusetts shot up 14.5% in February, reaching $98 million. Market leader, of course, was Encore Boston Harbor with $63 million (+14.5%). MGM Springfield leapt 17% to $23 million and Plainridge Park climbed 10% to $12 million. Wynn Resorts, Penn Entertainment and MGM Resorts International were among the companies represented at the J.P. Morgan Gaming & Lodging Forum and you can read our takes on most of them at CDC Gaming Reports. As for the others …

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Gambling revenues still looking up; Mega-Jottings

Maryland aside, gambling revenues continue to trend upward. Even in Iowa, where they nudged only 1% higher from last year (undoubtedly due to new competition from Nebraska) but were high heavens (+38%) over 2019, aka the good old days. Indiana’s gain was also a modest 1% from 2022 for a $199 million haul. Hard Rock Northern Indiana surged 9% to $34.5 million, while Horseshoe Hammond‘s decline slowed to 1.5%, bagging $28 million. Ameristar East Chicago slid 8% to $16.5 million and Blue Chip was up 4.5% to $11 million. To the south, Horseshoe Indianapolis galloped 8% faster, winning $26 million, while Harrah’s Hoosier Downs cantered +1.5% to $17.5 million.

Best of the non-racinos (other than Horseshoe Hammond) was Caesars Southern Indiana, grossing $21.5 million for a 9.5% gain. Bally’s Evansville peaked at $14 million and a couple of its competitors got hit hard. Rising Star fell 20.5% to $3 million and Hollywood Lawrenceburg tumbled 14% to $13 million. Belterra Resort rounded out the unfortunates, down 7.5% to $6.5 million. French Lick Resort climbed 8.5% to $6.5 million, enabling us to end on a positive note.

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Full House flopping; The bull case for gaming and Vegas

We tweeted after the opening of The Temporary at American Place (yes, that’s its cumbersome nomeclature) that it was “a hit.” We were wrong.

According to Full House Resorts CEO Dan Lee and CFO Lewis Fanger, The Temporary eked out just under $1.5 million in gaming revenues during its first two weeks of operation. (The State of Illinois says $3 million.) That’s $80 per gambler per day in the first week, $97 in the second, according to Lee. Full House is trying to spin these numbers as average for an Illinois casino. Trouble is, the company led us to believe The Temporary (and its eventual permanent successsor) would be above average, especially as it sits in prosperous Lake County, with outmoded, antediluvian riverboat casinos its nearest competitors. So you will forgive us if we are underwhelmed by its debut.

Stock boffins were treated to a fair amount of revisionist history by Full House. Now, for instance, opening without an Illinois database is realized to be a severe handicap. And we were told that Chicago denizens don’t drive to Lake County if they can help it. So why is Full House splurging on billboards along the expressway from downtown Chicago to O’Hare International Aiport? We’ve seen them.

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Maryland dips; Boardwalk bulletin; Biden/BIA overreach

February was moderately unkind to Maryland casinos, which were down 3.5% from last year to reach $157 million. Top-grosser of course was MGM National Harbor, flat at $65.5 million. Reliable runner-up Maryland Live was close behind at $56 million, but suffered a 6% drop. Horseshoe Baltimore faded 8% to $16 million, which seems to be the floor but also very near the ceiling for this casino. The only revenue-positive casino was Ocean Downs, up 4% to $7 million, so owner Churchill Downs knows something everyone else doesn’t. Hollywood Perryville slid 7% to $7 million and Rocky Gap Resort was down 3% to $5 million. Are we entering a cooling-off period? It’s still too soon to say.

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Caesars, MGM impress The Street; Less drag at Golden; Police blotter

After hanging out with CEO Tom Reeg and Senior Vice President of Finance Brian Agnew, analyst Joseph Greff of J.P. Morgan came away “upbeat” about Caesars Entertainment. His optimism centered on three salient points: “Las Vegas strength and momentum”; “a path towards meaningful profitability” for CZR’s digital assets; “appealing free cash flow generation.” In Sin City, Caesars appears to be making money hand over fist. Attrition in group bookings has fallen to pre-pandemic levels, ADRs are much higher (think double digits) and occupancies average 95% or so. Given the absence of such 2022 headwinds as high utility costs, Omicron and a good-but-not-great event calendar, 2023 looks as though it will be very good indeed, leading into the 2024 Super Bowl, whose benefits should be obvious.

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