David Mckee

Posted on April 27, 2021September 26, 2023 by David Mckee — 1 Comment

MGM hits paydirt; Palms sold?; Atlantic City underwhelms

Remember the Harmon Hotel? That Sir Norman Foster-designed tower that had to be amputated at half the intended height in 2008 because of incompetent construction? The only Las Vegas resort ever to be dismantled without having hosted a single guest? MGM Resorts International would probably prefer that it be forgotten. All that remains is a two-acre patch of bare ground. But MGM has cleverly monetized the Harmon site, selling it for $40 million/acre to a partnership led by Brett Torino. If that’s not a record for Las Vegas Strip real estate it’s pretty darn close. And the $80 million will buy a lot of salve for the $348 million wound left by building—and then unbuilding—the Harmon.

Torino’s plan for the site is a retail mall, crowned with a giant video screen, such as the one that makes nearby Harmon Crossing such a standout and an ad-revenue magnet. Evidently the Strip is not so glutted with retail that it can’t support another mall, although the owners of adjacent Crystals must be looking askance at this latest turn of events. Should the Torino project generate foot traffic, though, the most likely beneficiary will be The Cosmopolitan of Las Vegas, just a pedestrian bridge away.

Posted on April 26, 2021September 14, 2023 by David Mckee — Leave a comment

Big win for Seminoles?; Parx the deadliest track of all

Florida Gov. Ron DeSantis (R) succeeded where predecessor Rick Scott failed, inking a pact with the Seminole Tribe that would unlock the $35o million a year that the Seminoles have been holding in escrow. In return, the tribe gets a pretty ‘george’ gambling expansion: three new casinos, craps and roulette (Take that, blackjack-offering racinos!), Internet gambling, and both retail and online sports betting. For his part, DeSantis was able to get the Seminoles to up their annual ante to the state to as much as $600 million a year over a period of 30 years, with $2.5 billion guaranteed by 2026 and $6 billion by 2031. So everybody wins.

Or do they? The Seminoles could yet be hoist on their own petard, having teamed with Disney to pass a constitutional amendment that puts any expansion of gambling in the hands of the voters. Which means the new compact is certain to face a court challenge. Then there’s the butter-fingered Lege, which has managed to fumble every significant piece of gaming legislation within memory. When last seen, lawmakers were trying to sneak through a sports-betting bill on the excuse that it wasn’t ‘casino gambling.’ Excuse us while we fall down laughing. At worst, however, legislators could disapprove or try to f-up the DeSantis compact with add-ons of their own.

Posted on April 23, 2021 by David Mckee — 2 Comments

Sands blitzes Texas; Las Vegas “swarming” with tourists; Oscars suck

Starting last week, Las Vegas Sands has been blanketing the Texas airwaves with a barrage of pro-casino ads. Faced with a loss of traction in the Lege, Sands is turning to the court of public opinion. Going in drag as the Texas Destination Resort Alliance, Sands is using the ads to tout the virtues of a bill currently before lawmakers that would (among other virtues) establish $1 billion-$2 billion ‘destination resorts.’ The TV and radio spots highlight the amount of Lone Star State money being siphoned off by Oklahoma and Louisiana, saying, “Let’s boost our economy, create tens of thousands of jobs and help fund vital services like schools and public safety.” Both the state House and Senate versions of the casino bill are stuck in committee, and Sands is obviously hoping to budge them with an ad blast. Responding to criticism that this was a made-in-Vegas legislative push, Sands lobbyist Andy Abboud responded that Golden Nugget CEO Tilman Fertitta was being consulted on the proposed law.

Unsurprisingly, the problem-gambling issue was raised in committee. To this, state Rep. Charlie Geren (R) replied, “We already have negative social impact. Go no further than our borders than those with an addiction can drive less than 20 minutes and then return home to our state with no resources in place for them. Go no further than your smartphone, where illegal bets are bing placed on illegal bookie apps every day.” Well put.

Posted on April 22, 2021September 18, 2023 by David Mckee — Leave a comment

BetMGM “very credible”; Recovery at Sands “gradual”

That’s how JP Morgan analyst Joseph Greff described an evidently persuasive virtual meeting with BetMGM covering the latter’s recent results and strategic objectives. “To us, this was a credible presentation (particularly with its customer acquisition and retention objectives and operating model as well as profitability ramp) and investors can’t argue with or dispute the [joint venture’s] recent operating momentum and share gains,” Greff declared. He was impressed with BetMGM’s nationwide market share of 23% and its potential to edge out either DraftKings or FanDuel for the second spot in the sports-betting universe, to say nothing of Internet gambling. “BetMGM now expects the total addressable market in the U.S. and Canada to be approximately $32b (long-term, timeline not specified but our guess it’s 2030 +/-),” Greff wrote, adding that net revenues for the company were growing exponentially and could reach $1 billion next year. BetMGM has gone live in 12 U.S. jurisdictions, expected to grow to 20 by April 2022. That’s 40% of the American populace. (California remains out of reach until after the 2022 elections at the earliest.)

Posted on April 21, 2021September 26, 2023 by David Mckee — 1 Comment

Michigan sports betting, i-gaming surge; AGA chases renegade slots

Say what you like about Michigan, it’s giving New Jersey and Pennsylvania a literal run for their money in Internet gambling. Win/day is just over $3 million, close behind the Keystone State’s $3.15 million and challenging the Garden State’s $3.65 million. Sports betting handle last month was $359.5 million, which (before promotional outlays) translates into $32 million in revenue, a figure dwarfed by $95 million in i-gaming win. Market leader in handle was FanDuel/MotorCity Casino with 30% ($107 million), followed by BetMGM‘s 26% ($92.5 million), DraftKings‘ 21% ($76.5 million) and—losing a bit of ground—Barstool Sports‘ 11% ($39.5 million). Others showing up on the radar were PointsBet/Lac Vieux Desert Band of Lake Superior Chippewa Indians ($14 million), William Hill/Grand Traverse Bay Band of Ottawa & Chippewa Indians ($11 million), FoxBet/Little Traverse Bay Bands of Odawa Indians ($7 million), BetRivers/Little River Band of the Ottawa Indians ($5 million), Twin Spires/Hannahville Indian Community ($3 million) and WynnBet/Sault Ste. Marie Tribe of Chippewa Indians ($2 million).

As for win, it broke in BetMGM’s favor ($9 million), with FanDuel posting $8 million, DraftKings $6 million and Barstool $5 million. Of the also-rans only PointsBet and William Hill cracked the $1 million mark. Said one analyst, “The top three have separated themselves from the pack, but BetMGM has differentiated itself in generating heavy action while preserving its win with less in promotions.”

Posted on April 19, 2021September 14, 2023 by David Mckee — 3 Comments

Atlantic City disappoints, Internet gambling doesn’t

We’re going to have revise our prediction that Atlantic City would recover from Covid-19 faster than Las Vegas. Not at the rate things are going. March casino win was down 17% from 2019, coming in at $185 million. The Caesars Entertainment threesome slid 29%, with slot win down 29% and table win -26%. That’s far worse than citywide averages, which saw slot win -17% and tables -16%. Borgata‘s $46.5 million, while more than enough to lead the market, was 22% off from 2019’s halcyon days. We already knew Hard Rock Atlantic City had a good month, as President Joe Lupo took a press-release victory lap even before the revenue numbers were released. It grossed $31 million, a 25% leap over 2019. Ocean Casino Resort vaulted 33% to $20 million. The next closest thing to a ‘good’ number was Resorts Atlantic City‘s 19% dip to $12 million. Thanks to Hard Rock and Ocean, that -17% overall declivity looks a lot better than it was. Bally’s Atlantic City slid 33% to $10 million and Golden Nugget plunged 38.5% to $11 million. Caesars Atlantic City shed 23% to $18 million, Harrah’s Resort fell 33% to $18 million and Tropicana Atlantic City slid 30% to $19 million.

Posted on April 16, 2021September 26, 2023 by David Mckee — Leave a comment

Pennsylvania booms and busts, Massachusetts lags

Casino revenues were $270.5 million last month in Pennsylvania, down 22% from March 2019, another exception to the wave of recovery sweeping the country. Slots accounted for $199 million, tables for $71.5 million. Casinos were held to 50% of capacity, moving to 75% this month. King of the terrestrial casinos was Parx, far and away the leader with $53 million, only 6% down. Philadelphia Live may have done ‘only’ $20 million but solidified its hold on second place in the greater Philly market. Rivers Philadelphia was just under $20 million but down 28%, Harrah’s Philadelphia grossed $16.5 million, a 34% tumble and Valley Forge Casino Resort notched $10.5 million, a 19% slippage. In other major markets, Wind Creek Bethlehem won $34 million, a 33% falloff, Rivers Pittsburgh did $27.5 million, down 23% and Mohegan Sun at Pocono Downs dipped 14% to $18.5 million. Mount Airy defended its market share best, off 4.5% to $15.5 million.

Elsewhere, Presque Isle Downs fell 21.5% to $10 million, The Meadows racino tumbled 37% to $15 million, Hollywood Penn National slipped 17% to $20 million, and Live Pittsburgh grossed $8 million (no comparison available). Oh, and little Lady Luck Nemacolin slid 26.5% to $2 million.

Posted on April 15, 2021 by David Mckee — 5 Comments

Vegas: green shoots galore; Seminoles saluted

Against all odds, it appears that Las Vegas‘ recovery is taking place faster than anticipated (save by a very few). A CNN feature is vaguely euphoric but it does cite several new must-see attractions. For the all-important convention business, which sustains the town Monday-Thursday, there is the lure of the West Hall of the Las Vegas Convention Center, which may banish memories of the Riviera, whose site it occupies. Then there’s a triple-whammy of new casinos: Circa, Virgin Las Vegas (or Mohegan Sun Las Vegas, according to the TITO vouchers) and the July-debuting Resorts World Las Vegas, the most expensive megaresort yet built in Sin City. And, for a wholesome change of pace, the Pinball Hall of Fame reopens at a new location at the southern terminus of the Las Vegas Strip, complete with a park for food trucks. We sense a smash hit in the making.

More quantifiably, Plaza Hotel CEO Jonathan Jossel reports that business was “hopping” during March Madness and that casino play has regained pre-pandemic levels, which would be no small achievement. Gov. Steve Sisolak (D) is so optimistic that he’s planning a return to full capacity in public spaces as of June 1 (Nye County, for one, is jumping the gun, going 100% on May 1). Self-service buffets—if they return—can come back at 50% on May Day, as can nightclubs and strip joints. (No word yet on brothels.) As for casinos going back to 100%, that’s the Nevada Gaming Control Board‘s call to make, although we imagine the pressure will be overwhelming.

Posted on April 14, 2021September 14, 2023 by David Mckee — 3 Comments

Missouri booms; Trop sale a steal of a deal

After a hiccup in Indiana, gaming revenues continued to march (pun unintended) upward from 2019 levels, which were pretty darn robust. Missouri gained 6% for a gross of $176.5 million, “one of the best months ever” according to JP Morgan analyst Joseph Greff. Slots represented $155 million of the haul. “Similar to other March regional [gross gaming revenue] reports, results for the month reflect a nice positive inflection given lower infection and higher vaccination rates. Moreover, impressive results don’t include significant rebound in the core 55+ customer, which we expect to follow in the coming months,” wrote Greff. Lumiere Place (pictured) continues to turn around, up 8% to $17 million, good news for Caesars Entertainment. Also feeling the love was Boyd Gaming, up 12.5% to $28 million at Ameristar St. Charles. Not having such a good time of it was Penn National Gaming, flopping 23.5% at Hollywood St. Louis ($17.5 million), while River City was down 9% but bettered Hollywood with $19 million.

Posted on April 13, 2021September 14, 2023 by David Mckee — 1 Comment

Trop flipped; Arizona, Maryland join sports-betting club

The Gaming & Leisure Properties Inc. regime at Tropicana Las Vegas was (as planned) a short-lived one. GLPI just announced that it has flipped the Trop to Bally’s Corp., which evidently couldn’t wait one minute longer to get onto the Las Vegas Strip. For an unspecified “value” of the property, Bally’s gets the casino and pays $22.5 million in “incremental rent.” Not done yet, Bally’s sold the real estate of its Black Hawk, Colorado casino and that of Jumer’s Casino Rock Island for a combined $150 million. That’s a neat trick for Bally’s, considering that its purchase of Jumer’s (a real turkey) hasn’t closed yet. Sell something you don’t own? That’s clever. We wonder what Illinois regulators will think of this three-card monte. The Black Hawk and Rock Island casinos will be consolidated into a GLPI master lease that includes Bally’s rentals of Tropicana Evansville and Dover Downs. “Recall, last year, early on it the pandemic, GLPI received the Trop from PENN … last year in exchange for 2020 rent credits (since used and expired). We look at today’s news as a creative way for GLPI to extract long-term value from last year’s deal with PENN (which is no longer the OpCo nor has any economic/equity interest in the Trop),” wrote JP Morgan analyst Joseph Greff. As for Bally’s, it may need a stout dose of Geritol, as it is making a habit of buying casinos with tired blood in their veins.

Author: David Mckee