Author: David Mckee

Truist Securities analyst Barry Jonas recently took a tour of Las Vegas‘ C-suites, meeting with executives of seven companies. He concluded that “Despite market sentiment, operators remain generally positive.” Both the Las Vegas Strip and the recently declining locals market were both deemed “healthy,” while crucial convention business was seen as returning to pre-Covid-19 levels (with prices to match, we might add). Strong product from manufacturers is reported to be propelling higher demand from operators, even in advance of Global Gaming Expo.

Inflation? What inflation? That remained the prevailing sentiment. Or, as Jonas put it, “While downtown operator Circa recently noted seeing some decline in casino revenue from increased gas prices inflation, our meetings noted no impact on Strip visitation and customer spend. One operator notes a possibility of seeing some inflation pressure on margins given rising costs with potential wallet shift from gaming to lower margin non-gaming.” If there’s a dark lining to the silver cloud it’s operators’ reversion to a mentality that gaming is recession-resistant (disproven after the Great Crash of 2008) “with variable cost and pricing structures ability to mitigate revenue declines.”

Continue reading Strip perceives no inflation woe; Union sells out workers health

Nevada gambling revenues continued to climb in May, up 6% from last year, hitting $1.3 billion. The results were bifurcated, with tourist-dominated markets up and locals ones somewhat down. The Las Vegas Strip was the most obvious beneficiary, jumping 11.5% to $731.5 million, although Downtown also glittered to the tune of +5% and $79 million. Strip slot revenue vaulted 36% to $391 million on 34% more coin-in. Baccarat win rebounded dramatically—144%—to $131.5 million, despite only 10% greater wagering, while other table games rose 19% to $209 million on 21% larger betting. Numbers like those made up for the rest of the county. North Las Vegas waned 5% to $25.5 million and Laughlin slipped 3% to $47 million. At least the Boulder Strip was flat at $88.5 million while miscellaneous Clark County dipped a point to $140 million. Utah-fed border markets Mesquite ($15 million) and Wendover ($23.5 million) were flat and up 4.5%, respectively. Reno stumbled 4.5% to $63 million while Lake Tahoe wasn’t favored by the sunbirds, drawing $17.5 million for a 14% dive.

Continue reading Strip carries Nevada; Atlantic City casinos play chicken

Casinos in the Bay State clocked $91 million in revenue last month, a 5% improvement on last year. Encore Boston Harbor led the tiny pack with $58 million, growing 9.5%. Next up was MGM Springfield, performing surprisingly well. It was flat at $21 million, as management appears to have stanched the bleeding. Third was Plainridge Park with $12 million, the only casino to lose market share, down 6%. That place was always living on borrowed time until Encore opened (two years ago this month).

Only Station Casinos would have the huevos to claim to have been “vindicated” for taking bets on sports events whose outcome was already known. For this incredible malfunction (which involved 167 wagers), Station was fined $80,000 by the Nevada Gaming Commission, basically for neglecting to maintain its servers. You’d think Station would have gotten its ducks in a row following a 2018 past-posting scandal involving 350 invalid bets. But no, Station continues to behave as though rules are something by which just chumps have to conduct themselves.

Continue reading Massachusetts upbeat; Station defiant; Atlantic City stalemate

We’re back from vacation at last and pick up where we left: Atlantic City. The drop-dead date for contract talks (basically July 1, a full month past the expiry of the collective bargaining agreement) is drawing nigh and no progress is evident. Our East Coast correspondent reports that the rank-and-file are seeking $16/hour in base pay, which is still less than the livable wage of $17.75/hour, so that’s kinda george of them. Casinos continue to whinge about how poverty-stricken they are and say pay no attention to the money being raked in from i-gaming. At this rate, a strike appears more likely than not—and just when the casinos can least afford it. Are they really willing to flush the July Fourth weekend just to make an increasingly indefensible point? Apparently so.

Continue reading Nasal amputation in Atlantic City; Goodbye, Hawaiian Marketplace

So we leave on vacation (I checked into the Westin O’Hare and didn’t leave the building for three and half days) and all hell breaks loose in Big Gaming. The breaking story was MGM Resorts International‘s decision to shuck Gold Strike Tunica. It’s unloading a non-core property to the fast-expanding Cherokee Nation Entertainment. The fact that the Cherokee got 1,100 hotel rooms and a casino for a below-average 6X cash flow speaks for itself. Vici Properties remains the landlord and will collect $40 million a year from Cherokee Entertainment. MGM collects $350 million in cash, net, money it will hopefully not sink into the Osaka pit. The transaction is expected to take a year to close.

Although 2022 is still shaping up as a better year than 2019 for the industry, the post-pandemic recovery is definitely cooling. Indiana came out of May down 4% from last year, booking $212 million in revenue. With $36 million, Hard Rock Northern Indiana was the clear winner, besting nearby Horseshoe Hammond, falling a precipitous 24% to $29 million, and Ameristar East Chicago, plunging 34% to $17.5 million. Over to the east, Blue Chip was relatively unruffled, off 3.5% to $12 million. Elsewhere in the state, Hollywood Lawrenceburg was flat at $14.5 million and everyone else was down except Bally’s Evansville, up 7% to $14.5 million. Horseshoe Indianapolis banked $29 million, off 4.5%, and Harrah’s Hoosier Downs was down 1% to $21 million, both of them making up for the leakage up in Hammond.

Continue reading Special Edition