Category: Casino News

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MGM, Penn disappoint, Golden droops; Tilman’s gambit

Dragged down the golden albatross that is Macao, earnings of MGM Resorts International missed analysts’ projections by a whopping $1.61 per share for a 3Q22 loss of $1.39/share. More’s the pity, as MGM did so many things right. Wall Street expected 91.5% Las Vegas Strip room occupancy; MGM delivered 93%. The Street anticipated $3.2 billion in quarterly revenue; MGM saw that and raised it by $200 million. But Macao missed analyst estimates (which can’t have been very high to begin with) by 18%, eking out $87.5 million. J.P. Morgan analyst Joseph Greff dismissed the quarterly numbers as “more of the same,” while Deutsche Bank‘s Carlo Santarelli was slightly more clement, calling the results “some bumps, but broadly solid.”

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Caesars Strip-tease; Slot flea swatted; Biden targets resort fees

In the end, all that talk of Caesars Entertainment selling a Las Vegas Strip asset was just a sham. The company probably couldn’t find any takers for the Flamingo at CEO Tom Reeg‘s preposterous asking price (ditto his equally preposterous conditions for vending Planet Hollywood). Reeg’s explanation was “We ran into a market where the cash flow of the asset continued to increase and the ability of buyers to raise financing made it a very easy decision for us to keep.” Never mind that his decision blows a $1 billion-$2.5 billion hole in the strategy to pay down the company’s groaning $13.3 billion debt load. (If there is a recession, God forbid, Caesars will be in a boatload of trouble.) In the end, nobody was going to pay $2.5 billion for the Flamingo and even Planet Ho would be a heavy lift at that price.

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Atlantic City beat; MGM Cotai padlocked; Adelson buys Abbott

“Did Bally’s open a casino in Atlantic City and forget to tell anyone about it?” So asks our East Coast correspondent. “This is Bally’s yesterday (Sunday). A few casinos here would have more customers during a snow storm than this.” As though to prove their cluelessness, Bally’s Corp. mailed its faithful Boardwalk customers a lengthy flier touting the Tuesday promotions (including the blue-plate specials) at Dover Downs, right? Nope … Bally’s Vicksburg. What a waste of time, money and bandwidth. And this is the company that’s supposed to elevate Chicago into the casino major leagues?

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Station accentuates positives; Wynn gets richer, Adelson poorer

Do Station Casinos execs really want to double their footprint in seven years? Yesterday they reported flat 3Q22 revenues of $414.5 million, all but $3 million of which were Vegas-derived, unwittingly highlighting the company’s exposure to a single market. Company leadership promised better times ahead—and soon. CFO Stephen Cootey spun the disappointing first blush by pointing out that, on a same-store basis, it was the best third quarter in the company’s history. Although foot traffic was flat with 2Q22, Cootey said spending trends are strong, with F&B recording its best third quarter ever. While pledging not to look into his crystal ball, CEO Frank Fertitta III said, “We don’t see anything that would suggest that it will be any different than it has been historically, other than the last third quarter, when we had a bunch of stimulus money in the economy that may have made things a little harder to read.” In other words, comparisons to to 3Q21 don’t count.

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Strip still booming, locals flat; Gambling with democracy

Nevada scored yet another $1 billion-plus month in September, up 8% from 2021. As you might expect, the Las Vegas Strip drove the big gain, booking $693 million in win, up 8%. Strip slot revenue was $409.5 million, a 17.5% vault in coin-in. Table games not called ‘baccarat’ saw 10.5% more wagering and the whales appear to have returned to the baccarat table, where betting volume was 34.5% larger. Luck wasn’t with the house, which saw 3% less baccarat win.

This more than compensated for a Las Vegas locals market that has leveled off from last year. Downtown was more like its old self, gaining 1.5% to reach $74 million while Laughlin hopped 5% to $39 million. Boulder Strip casinos took a hit, down 8.5% to $74.5 million. This negated most gains in the rest of the locals picture. North Las Vegas was up 5% to $23.5 million, proving out Station Casinos‘ contention that demolishing two casinos wouldn’t hurt the region. Miscellaneous Clark County climbed 4% to $142 million.

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Bullish for Boyd; Abbott does Texas two-step; D.C. remorse

Bad economy? Not if you’re Boyd Gaming. The regional giant significantly improved third-quarter income, from $843 million in 3Q21 to $877 million this year. Said CEO Keith Smith, “Continuing into October, customer spending has been very consistent with the trends we’ve seen throughout this year. While there are clearly headwinds in the economy, we haven’t seen any meaningful change in our customers’ behavior.” Rated play was up 5%, compensating for a faling-off of unrated, stimulus-driven spending. Hotel revenue was also up 5% and occupancies up 6%, those rooms being filled with what Smith characterized as high-value guests (10% higher gaming win). Food and beverage was a revenue geyser, jumping 11% and nowhere was business better than in Sin City’s Downtown, where earnings leapt 17.5% to $49.5 million, driven by the reopening of Main Street Station and by the return of business from Hawaii, a Boyd mainstay.

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Vegas scores own-goal; Housing slowdown begs casino growth

In their rush to book a Formula One racing event, Las Vegas city fathers have intentionally or otherwise conducted a 20,000-person human sacrifice in the form of a forfeited convention. Congratulations, Sin City, you’ve just lost the 2023 NAR NXT, a major conference of Realtors. Your loss shall be Anaheim‘s gain. Let’s let the official press release tell the story, shall we?

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Upsurge in Louisiana; Stitt stiffed; Fubo Sportsbook folds

In a major reversal of fortune, Louisiana casino revenue vaulted 18.5% over September 2021. Foot traffic rose 41.5%, which more than made up for thriftier gamblers: On average they lost 16% less per player. It helped the year/year comparison that Louisiana in autumnal 2o21 was still reeling from Hurricane Ida. However, even compared to the previous peak (2019) the numbers were 3% higher. Even sports betting is showing signs of life, with $32 million in revenue derived from handle of $207.5 million.

Not all markets benefited. Baton Rouge was in the doldrums with even L’Auberge Baton Rouge (pictured) flat at $13 million. Belle of Baton Rouge tumbled 21% to $1 million and Hollywood Baton Rouge slipped 10% to $4 million. Lake Charles saw a bonanza though, with Golden Nugget rocketing 41% to $32 million, past L’Auberge du Lac‘s $30 million (+14%), while Delta Downs gained 12.5% to achieve $13.5 million. Boyd Gaming‘s two rural properties fared poorly, however, with Amelia Belle sinking 10% to $3 million and Evangeline Downs down 12.5% to $6 million.

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Las Vegas Sands blossoms in Singapore, challenged in NYC

Cash flow at Vegas-less Las Vegas Sands during the third quarter came in far above Wall Street‘s expectations, driven by “accelerating” business at Marina Bay Sands. As Credit Suisse analyst Ben Chaiken reported, “Macau is still largely uncertain pending the travel/COVID policies within China.” Still, he thinks a speedier-than-anticipated recovery in Singapore bodes well for Macao eventually. Once the government gets its act together, that is. He felt that at its current $36.50 a share, LVS stock is fairly priced, even a bargain when one looks to the future. For instance, when Shanghai denizens are allowed back into Macao (where they have represented 55% of visitation), favorable monetary demographics bode well for the premium mass-market segment, the new must-have customers in the enclave.

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