Category: Casino News

All-important Baby Boomer customers are ‘trickling‘ back to Las Vegas, according to the Las Vegas Review-Journal. That’s the latest positive augury for Sin City. Better still, the destination-wedding biz is “bursting,” per Forbes, and what place is more synonymous with a getaway nuptial than Vegas? Almost 50% of couples surveyed who were planning to tie the knot in 2020 are now looking at either renewing their vows this year or at least holding the receptions they couldn’t last year. Throw in family and college reunions, and all the arrows are trending upward. At the risk of stating the obvious, “Wedding parties can drive a lot of business to hotels and resorts, including booking ballroom or outdoor event space, having food and beverage offered throughout the celebration, which often takes place over a couple of days, and of course the room reservations for the wedding party and guests.”

4Q20 hotel business was at only at 56.5% of pre-Coronavirus levels but, two rounds of stimulus later, those numbers are certain to be burgeoning. Even business travel is looking better, expected to rise 21% this year. Of course, conferences and trade shows require a considerable outlay, and the shift to virtual meetings will not entirely recede. Business travelers aren’t expecting a return to normal until 2022 or ’23, maybe never. We’ve seen this in Las Vegas, where Las Vegas Strip hotel rates are rebounding dramatically on weekends (along with occupancy levels) but continue to languish midweek. Still, if you’re in a REIT, as much of the gaming industry now is, it’s a good time for you. Writes economist Calvin Schnure, “Lodging/resort REITs have fully recovered their losses from the early months of the pandemic, and the improvements in the fundamentals for leisure and business travel are encouraging for future gains as the economy—and the wedding business—gets back to normal.”

Continue reading Vegas hears wedding bells; Sahara upscales; Mega-Jottings

That’s how JP Morgan analyst Joseph Greff described the online sports-betting bill enacted by the New York State Lege. The latter essentially caved to Gov. Andrew Cuomo (D), giving control of OSB to the state lottery. Instead of the one-operator solution proposed by Cuomo there will be … wait for it … two. Big whoop. Those two casinos will be enabled to host four ‘skins’ on their Internet platforms. So, as we predicted, somebody (maybe a lot of somebodys) are going to be left out in the cold. The ‘Net platform providers will each pay Albany $25 million for a 10-year concession plus an annual levy of $5 million to the host casino “to alleviate the constitutional requirement that sports wagers are placed at casinos.” No tax rate has been announced but both Greff and Credit Suisse‘s Ben Chaiken anticipate it will be steep, probably in the 50% range, another Cuomo object of desire.

The cure may be worse than the disease. Greff, for one, finds himself with more questions than answers. For instance, what’s the difference between a platform provider and an OSB operator (Cuomo tipped his hand here by taking a meeting with DraftKings)? The bill calls for a minimum of four skins but what’s the maximum? Who gets to choose the skins, the state or the private sector? Will Native American tribes be eligible to compete? Will they sue the state and how might this delay the launch? Greff foresees the Empire State going live by the start of NFL season, as the bid process will begin July 1 with a truncated, 30-day RFP period. Regulators, says Chaiken, have five months to decide, which kind of shoots that NFL-kickoff target in the keister. The New York Gaming Commission gets to play King Solomon, depending on how much Cuomo tries to interfere.

Continue reading “In a word, messy”

Joseph Greff and his fellow JP Morgan analysts looked at recent trends in Las Vegas and any place not named Atlantic City, and liked what they saw, raising their price target on the stock five bucks to $101/share. Positive factors include recovery in leisure travel (group business is seen as coming back late this and into next year), “legs to a recovery in U.S. drive-to, regional markets, with our anticipation of a return of the 55+ year old customer, which has lagged other customer segments such as a younger demographic,” as well as “permanently higher margins,” thanks to job cuts and other economies. The pending close of the William Hill purchase poises CZR to capitalize on the explosion of U.S. sports betting and growth of online gambling. So far the only consequential property sale on the horizon is that of Horseshoe Hammond, with Las Vegas Strip dispositions having faded into the hazy yon.

Greff espies “incremental evidence of a recovery in Las Vegas and a sequential pick up in most other regional markets.” The “quite strong” March results, however, don’t include meaningful numbers of Baby Boomers, evidently fighting shy of the Covid-opportunity zones that some Strip casinos present. As vaccinations continue to ramp upward, Greff expects this problem to abate. His estimates for 3Q21 and 4Q21 are unchanged “but we can see a scenario where our/Consensus estimates here may be too conservative.” Also, if people continue to behave carelessly and Covid-19 rates keep spiking, that’s going to kick the nascent gaming recovery into a cocked hat.

Continue reading Caesars looking good; Amtrak covets Vegas; Bally’s underwhelms

A University of Massachusetts Amherst panel led by respected academic Rachel Volberg has been studying casino gambling in Massachusetts and likes most of what it finds. It concluded that Bay State dollars had been significantly repatriated from neighboring states (the primary goal of legalization) and there was “no negative impact” on the state lottery. Citizens were fleeing the state in smaller numbers, going from 33% of cross-border business in 2013-4 to 16% in 2019. Bay Staters who were gamblers went up by 14% in the same period. 70% of study participants identified themselves as regular gamblers, while 3.5% admitted to being problem gamblers, with another 12.5% identified as at-risk. A fifth of them devolved into problem gambling while most pulled back into recreational gambling. Heavy ad blitzes “precipitated relapse. We can’t prove that but it’s very tantalizing,” said investigator Robert Williams. He added that “there is no ‘silver bullet’ to prevent problem gambling. Rather, a wide array of educational and policy initiatives is needed to address the multifaceted biopsychosocial” causes.

Low-income men were the likeliest to develop disordered-gambling habits, with substance abuse and mental ill-health cited as co-presenting morbidities. “Each problem gambler has a unique array of risk factors,” Williams said. “You need to tackle problem gambling from a multidirectional way as well.” Paradoxically, 9% of self-identified problem gamblers denied anything was wrong. The UMass teams recommendations include a cap on casino advertising, more education on problem gambling and active encouragement of disordered gamblers to seek treatment. Concluded Massachusetts Gaming Commission Chairwoman Cathy Judd-Stein, “There has been no other longitudinal study of gambling behavior of this scale in the United States. It shapes our understanding of gambling behavior in Massachusetts and contributes to the few comparable studies worldwide.” Agreed. Let’s hope it’s the start of a trend. Your turn, Nevada.

Continue reading Massachusetts gaming a success; Cuomo gains upper hand in NY

If you cruise by Circa, you’re liable to see members of Teamsters Local 986 walking a picket line on behalf of the ‘Circa Seven,’ a group of unfortunate warehouse workers. The seven were employed by Derek Stevens‘ Three Corners company, which services Circa. What caused the Circa Seven to get the axe? According to the Teamsters, it discovered they were pursuing union membership and gave them the chop. “The Circa Seven came to work, informed that their jobs were ‘outsourced’ to [subcontractor] QLI and then fired without warning,” claims Local 986 Secretary-Treasurer Chris Griswold. “It is heartless of this company to displace its own workers during the worst health crisis in a century.” If you agree with the Teamsters, you can make your feelings known online. If you side with Stevens, you of course don’t need to do anything … except maybe cross a picket line.

Room rates on the Las Vegas Strip were tanking this time last year, so maybe improvement is in eye of the beholder but they continue to trend upward. For April 18-24 they’re 28% higher, averaging $129/night, including an encouraging 2% improvement in weekday rates (weekends are up an eye-popping 73%). Mind you, at that time last year the averages were -33% midweek, -56% weekend and -44% overall. Caesars Entertainment is seeing a 23% midweek climb and a 106% improvement on the weekend. Venelazzo leapt 185% weekends and 50% weekdays. Convention-dependent MGM Resorts International saw only a 1% midweek nudge, plus a 70% weekend uptick, while Wynncore tumbled 26% midweek, even on such an easy comparison, and bumped up just 12% on the weekend. Was it too soon for Encore to reopen?

Continue reading Circa picketed; Sundry green shoots in Vegas; Sports book busted