Author: David Mckee

It’s only May but we have to give the nod to The Cosmopolitan of Las Vegas. Outgoing owner Blackstone Group graced all employees with $5,000 bonuses, an incredibly generous gesture. Blackstone certainly didn’t have to do it but they did and we are grateful. In addition to rewarding years of faithful service, the payout also provides a “soft landing” for anyone displaced by incoming owner MGM Resorts International (which enjoyed spineless approval by the Nevada Gaming Commission). Does Blackstone know something we don’t? Are big job cuts coming? Given Las Vegas‘ recent history (as in post-2000), we’re betting on ‘yes.’

According to The Associated Press, “joyous bedlam” broke out at the Cosmo when the news filtered to employees of their unexpected payday. Given that the megaresort employs roughly 5,400 staffers, we’re talking about a $27 million largesse, “george” by any measure. As Chief People Officer Daniel Espino put it, “It’s you, every single day, that makes a difference. Whether you clean the rooms, cook the food, are dealing cards, serving drinks, at the front desk.” As for Blackstone, it now takes its $1.6 billion sale price for the Cosmo and plows it into Crown Resorts, which could desperately use some good karma these days.

Pay no attention to the man behind the curtain (Xi Jinping). That was the message of Wynn Resorts‘ first-quarter earnings call. Some analysts weren’t having it, with Deutsche Bank‘s Carlo Santarelli opining that Macao was “the real story.” That being said, he lauded the company, which “again delivered strong domestic results, with both Las Vegas and Encore Boston Harbor eclipsing our forecasts, to varying extents.” The shortfall in China, although “well anticipated” managed to neutralize the domestic outperformance. While Santarelli didn’t feel there was much novelty in the earnings call, he passed along the news that Wynncore occupancy was running at an enviable 91%, cash flow both on the Las Vegas Strip and in Boston was better than ever, Wynn lost $31.5 million on its abortive interactive division and Macanese hotel occupancy was 75% during the Labor Day period, of which more in “Jottings.”

A comedy of errors is playing out in Chicago. After Mayor Lori Lightfoot (D) was reported by the Chicago Sun-Times to have gift-wrapped the winning bid for Bally’s Corp., Her Honor immediately backpedaled, saying, “We have a very specific process, and the process is there is an evaluation committee that’s been hard at work through this process. They will evaluate all the information that has been provided by the three finalists and they will give their recommendation to me.” Evidently Lightfoot didn’t trust her own process or was lying through her teeth, as reports leaked out later that day that Bally’s Chairman Soo Kim was flying to the Second City to be awarded the gaming concession.

The fait accompli went out over the wires yesterday morning, in an official press release in which Lightfoot said, “Following significant analyses and community input on all aspects of our three finalists for Chicago’s casino license, the selection committee and I have chosen Bally’s to move forward in the development of the City’s first integrated casino resort. We are confident that Bally’s Tribune Publishing Center development will shore up the City’s pension funds, create thousands of good-paying jobs, and lead to a bright financial future for our city.” Chimed in Kim, “We would like to thank Mayor Lightfoot and her office for conducting a tough, but fair, RFP process, and selecting Bally’s Chicago as the final bidder for the City’s casino,” Of course it’s “tough but fair” when you’re the winner. Hard Rock International and Rush Street Gaming‘s Neil Bluhm might disagree.

According to Deutsche Bank analyst Carlo Santarelli, the 1Q22 numbers for MGM Resorts International were “better than forecast” in Las Vegas and regionally, nor as bad as expected from Macao. Losses from BetMGM were worse than anticipated. Santarelli predicted cash flow of $633 million and Leo the Lion delivered $670 million. The analyst only expects things to get better on the Las Vegas Strip, with high-margin The Cosmopolitan of Las Vegas displacing low-margin The Mirage. BetMGM was a $184 million drag on the balance sheet, more than the $162 million Santarelli was expecting but “the shortfall was not entirely surprising, given the lower hold experienced on the sports side in the period, as well as the spend levels associated with the New York launch. Importantly, MGM continues to outperform in the longer term margin friendly iCasino segment,” he wrote. MGM China contributed [?] a $26 million negative ROI.