Caesars Entertainment is holding a fare sale across its non-Las Vegas properties, a possible signal that the stimulus-fueled recovery may be cooling (in economics, what goes up must come down). In Atlantic City you have your choice of such starting prices at $54/night at Harrah’s Resort, $59 at Tropicana Atlantic City and $64 at Caesars Atlantic City. Elsewhere in the Roman Empire the bargain destination is Tropicana Laughlin at $35/night. Surprisingly pricey is Harrah’s Cherokee at $169. Up there on the price ladder are Lumiere Place ($159), Isle Waterloo ($105) and Isle of Capri Boonville ($99). Bargain hunters have their choice of—ick!—Circus Circus Reno‘s $39 but we’d advise spending a bit more and staying down the street at Silver Legacy for $49. Harvey’s Lake Tahoe is wallet-friendly at $49, as is Harrah’s Gulf Coast at $75. With prices like those who needs Vegas, especially right now?
Louisiana casino revenues continue to march upward, gaining 10% over 2019 in July. The statewide gross was $222 million. Business was especially lively in Baton Rouge, up 32%. That was propelled by L’Auberge Baton Rouge, vaulting 41% to $16 million. Hollywood Baton Rouge leapt 37% to $6 million but Belle of Baton Rouge sank further, down 30% to a measly $1.5 million. New Orleans was also jet-propelled, up 17%, led by Harrah’s New Orleans, up 26% to $26 million, while Boomtown New Orleans jumped 25% to $11 million. Only Treasure Chest was revenue-negative, down 4.5% to $8 million. Amelia Belle was flat at $3.5 million, while Fair Grounds racino climbed 9.5% to $4 million.
Lake Charles was easily tops in dollar volume ($80 million), with L’Auberge du Lac ($32 million) very slightly besting Golden Nugget Lake Charles ($31.5 million), jumping 29.5% versus the Nugget’s +12.5%. Delta Downs gained 9% to $16.5 million. Moving over to Shreveport/Bossier City, in the last month before Shreveport’s smoking ban, Margaritaville continues to lead with $18 million (+24%), followed by Horseshoe Bossier City‘s $15 million (-3%) and Eldorado Shreveport‘s $11 million (+14.5%). Also playing were Boomtown Bossier City ($4.5 million, +8%), Sam’s Town ($5.5 million, -15.5%—are the smokers fleeing already?) and Louisiana Downs ($4.5 million, +21%). Rural Evangeline Downs grossed $7.5 million, up 11%.
CityCenter, the last and largest Las Vegas project by Las Vegas’ largest builder nears 15 years old. The concept probably started before 2006 and completion was a few years later. So, claiming 15 kinda fits in a lazy fashion.
Kirk Kerkorian was the most active and largest developer of Las Vegas casino properties in history. He liked to “go large”. His list of “largest” includes the International (currently Westgate) in 1969; the first MGM Grand (currently Bally’s) in 1973; the current MGM Grand in 1994, which were each the “largest hotel on earth” at the time of their construction. He then embarked on the “largest privately funded construction development in America” with “Project CityCenter” in the early 2000s. Kerkorian was in his 90s at the launch of CityCenter, so I think it is safe to say he never lacked for financial courage, vision or hope for the future.
CityCenter was planned for roughly 75 acres bounded by Las Vegas Boulevard on the east, I-15 on the west, Monte Carlo Hotel & Casino (now Park MGM) on the south, and parts of the Cosmopolitan, Jockey Club and Bellagio on the north.
Pennsylvania was late to the casino-recovery party but it’s finally arrived, up 1% in July over 2019 for a gross of $310 million, of which $223 million was won at the slots. The good news may be short-lived, in that Hollywood York opened on August 12, contributing to the saturation of casinos we are seeing in the Keystone State. Parx Casino was way out in front of everybody else, grossing $58.5 million for a 14.5% gain. Elsewhere in the Philadelphia market, Rivers Philadelphia regained the edge on Philadelphia Live, winning $23.5 million, an 8% decline from 2019 but much better than in recent months. The Cordish Gaming competitor slipped to $22 million but bested Harrah’s Philadelphia‘s $17 million (-15%) while Valley Forge Resort Casino dipped 2% to $11.5 million.
In the Pittsburgh area, Pittsburgh Live garnered $10 million while Rivers Pittsburgh gained a percentage point to $33 million but The Meadows slid 10.5% to $18 million. Elsewhere, Mohegan Sun at Pocono Downs was up 7% to $20.5 million, Wind Creek Bethlehem slipped 6% but posted an impressive $42.5 million and Mount Airy netted $20 million in a 21% leap. Presque Isle Downs gained 7% to $12 million, Hollywood Penn National dipped 4.5% to $19.5 million and luckless Lady Luck Nemacolin fell 22% to $2.5 million.
It took a while but the Boardwalk is finally even with 2019 numbers. July saw a gambling gross of $277 million, flat with two years ago. Slot win was up 6% on 2% more coin-in but tables declined 14% on only 3% less wagering. Luck was not with the house. That was especially true of Borgata ($64 million), which absorbed a body blow in the form of a 21% decline, driven by a near-cataclysmic 46% plunge in table win on 27% less play. Tighter hold held Borgata slots to only a 6% dip despite 14% less coin-in. The Caesars Entertainment Cerberus was 1% up, with table win 4% higher on 7% greater wagering, while slots were flat (and much tighter) with coin-in down 2%. Individually, Caesars Atlantic City grossed $26 million, a 4.5% gain, Harrah’s Resort slipped 2% to $29 million and Tropicana Atlantic City gained 2% to $29.5 million.
Bally’s Atlantic City was down 8.5% to $16 million and Golden Nugget fell 20% to $15.5 million. At the other end of the spectrum, Ocean Casino Resort shot up 58% to $30 million and Hard Rock Atlantic City solidified its hold on second place with $48 million (+23%). Also revenue-positive was Resorts Atlantic City, up 5.5% to $18.5 million.
That in essence is the question posed today by Global Gaming Business, in an excellent article by Marjorie Preston. And if GGB is querying the viability of the Nipponese casino market you know things are bad. Even normally bullish Brendan Bussman tempers his optimism with caution as regards the 30% tax on casino revenues, saying “any time you have a tax rate at that level across the board on slots and tables, it’s difficult for any operator to make the numbers make sense. You could say the same thing about Chicago, which is a 40 percent effective tax rate. That’s why everybody’s pulled out of Chicago.”
Already the heavyweights are retreating. Sample verdicts include those of Wynn Resorts CEO Matt Maddox who said he’d withdraw “if it doesn’t make financial sense.” And it didn’t. Ditto Las Vegas Sands CEO Rob Goldstein: “We’re used to writing big checks, but all that money on one [megaresort] makes you stop, pinch yourself and ask if you can get the returns your shareholders deserve.” The only megawatt operator who’s favored to cinch a spot is MGM Resorts International, which will have to invest $9 billion for the privilege. Elsewhere, cities have chosen to go with obscure Canadian private equity firm Clairvest (?!?!?) and Casinos Austria, which doesn’t currently run anything remotely on the scale the Japanese government wants. Sure, Melco Resorts & Entertainment and Genting Group still have a shot at Yokohama but …
Stop the presses! Illinois casinos actually outperformed 2019 last month by 4%. That’s downright miraculous. They grossed $120 million, led by Rivers Casino Des Plaines‘ $47.5 million, a 28% vault. Harrah’s Joliet was a distant second with $14.5 million (-1%), closely followed by Grand Victoria‘s $14 million (+10%). The prosperity was confined to the northern tier, with Hollywood Aurora up a point to $10 million and Empress Joliet tumbling 20% to $8.5 million. Mid-state, Par-A-Dice slipped 8.5% to $6 million, while Bally’s Corp. will have it’s hands full with Jumer’s Rock Island, which plummeted 33% to $4 million. (Bally’s execs implied on the latest earnings call that they bought it mainly to get in on the sports betting market.) In the southern tier, Harrah’s Metropolis slid 19% to $5.5 million, Argosy Belle was down 8% to $3.5 million and DraftKings Casino Queen declined 11.5% to $7 million. Having two extra weekend days obviously did no harm to the gainers in the marketplace but the losers would surely have been much worse off—though how much worse Jumer’s could get is open to speculation. It used to be one of the best performers in the Land of Lincoln but that was a long time ago.
Incidentally, we now have access to complete numbers from Ohio. To wit, it was a real horserace. Slots-only MGM Northfield Park led with $25 million of a statewide tally of $211 million, up 17% from 2019. Close behind was Hollywood Columbus with $24 million, plus 27%. Jack Cleveland also gave MGM a run for the money with $23.5 million, leaping 38%. Other top grossers were Hollywood Toledo ($21.5 million, +27%), Hard Rock Cincinnati ($21.5 million, +23%), Scioto Downs ($21 million, +34%) and Miami Valley Gaming ($19.5 million, +31%). Other racinos were all revenue-positive: Jack Thistledown ($18 million, +49%), Belterra Park ($9 million, +22%), Hollywood Dayton ($13.5 million, +38%) and Hollywood Mahoning Valley ($15 million, +37%). No, those percentage increases are not typos and we have not been drinking.
I have a 3-days-a-week gym buddy. We do 20 minutes of aerobics, another 20 minutes with weights, and call it a day. It’s not a rigorous routine, but it’s a lot better than no exercise at all, and we’re both better at keeping the schedule if the other guy is there too.
One night I got a text from him saying he took a Covid test for an upcoming trip and tested positive. He was required to quarantine for ten days so would not be at the gym for a while.
Rather than face (well-deserved) impeachment, New York State Gov. Andrew Cuomo (D) resigned in disgrace today. Which happened to coincide with the disclosure of the companies which have applied to be online sports betting provider(s) for the Empire State. Cuomo’s not-a-moment-t00-soon departure means that the contenders can hope not to be shaken down or chosen on the basis of how usuriously they are willing to be taxed (isn’t that tantamount to bribe solicitation, guv?). And Cuomo’s obvious favorite, DraftKings, now faces a level playing field. At least that is our hope. The finalists will be Bet365, Penn National Gaming/Kambi, FanDuel/BetMGM/DraftKings, TSG/FoxBet, TheScore and a jumbled combination of Kambi/Caesars Entertainment/Resorts World/PointsBet/WynnBet/Rush Street Interactive. DraftKings still has a very good chance of getting one of the plums, if for no other than reason than it’s riding the coattails of MGM and favorite son Empire City Yonkers. The second Kambi combination platter also has an edge since it contains two other New York brick-and-mortar operators, Rush Street and Resorts World.
“We expect to learn of the winning consortiums, and we believe two will be chosen, in the next 4-6 weeks. Based on the criteria put forth in the RFA, we believe there are obvious front runners from the list, and those for whom the prospects appear dim, based on their track records relative to the RFA selection criteria. That said, it’s New York and anything can happen,” wrote Carlo Santarelli of Deutsche Bank. Yes, anything can happen. Just ask Andrew Cuomo.
Secretary of the Interior Deb Haaland has jumped the shark. Her department has wisely-washily neither confirmed nor denied the controversial Seminole Tribe compact with the state of Florida, one that gives the Seminoles control over sports betting in the state. As a result, it goes into effect Oct. 15. What this means, practically speaking, is that we could drive across the Florida state line, park at the nearest rest stop, place a mobile wager from the restroom and have it be classified as ‘tribal gaming’ because all such bets are routed through servers on Seminole sovereign land. Yes, a toilet stall on the interstate could qualify as a ‘tribal gaming’ location under the terms of the compact. Haaland must have known this would be a hot potato, as the Interior Departmentsnuck the decision out under cover of darkness (“quietly and passively,” as one newspaper put it). Or rather, they dumped it on the proverbial curb on Friday, the end of the news cycle when nobody would be looking. A court challenge is inevitable and, we hope, successful.
Deutsche Bank analyst Carlo Santarelli showed some skepticism of his own. He wrote, “While the initiative is likely to be legally challenged by numerous parties, and while [DraftKings] and FanDuel have partnered to get a petition signed to get on the November 2022 ballot, the way things currently stand, online mobile wagering in Florida is a monopoly, something we believed was likely to be the case, despite optimism around the skin partners. We believe that optimism should have faded once the DKNG/FanDuel effort to seek a different path got underway, as it essentially implied that both operators recognized that the hub and spoke OSB model via the Seminole Tribe wouldn’t work.”
