Las Vegas Advisor

Posted on July 13, 2022September 14, 2023 by David Mckee — 2 Comments

Bally’s Chicago stirs skepticism; Vegas locals cooling

It’s not just us who are leery of Bally’s Corp. and its ability to do something unprecedented in its history—swing a $1.7 billion casino in Chicago. The company’s corner-cutting “improvement” of Bally’s Atlantic City does not inspire confidence. Nor does a “negative” rating placed on Bally’s debt by both Fitch Ratings and Standard & Poor’s. As Crain’s Chicago Business explains, “That means that while no immediate credit downgrade has occurred, concern about the company’s finances is rising and a downgrade is a distinct possibility in the near future.” S&P cited potential difficulty in obtaining building permits, as well as inflationary pressures on the project cost: “In addition, the risks related to successfully ramping up the operations and cash flow generation of a greenfield project are high.”

Posted on July 12, 2022August 29, 2023 by Bob Dancer — 8 Comments

How Long Can It Last?

I was leaving the South Point one morning in early June and “Sam,” a man who has attended many of my classes over the years, approached me and said, “Bob, I have to ask you. How long can a losing streak last? I haven’t hit a royal flush since November.” For occasional players, a six- or seven-month royal-free streak would not be that unusual. But I’ve seen Sam in casinos dozens of times, so I assume it’s been several 40,000-hand cycles. Always painful. Always expensive.

Posted on July 12, 2022September 14, 2023 by David Mckee — Leave a comment

California Dems rebuff Big Gaming; Icahn irate; Mega-Jottings

California‘s Democratic Party has officially taken sides in the sports-betting ballot race and effectively come down on the side of a tribal/racetrack-driven initiative, going on the record as opposing a rival measure backed by most of the big names in online wagering. This is not entirely surprising. The Dems are going with a traditional source of support (Indian Country) and against what is, mainly, a group of carpetbaggers with relatively political clout out West. To split hairs, the California Democrats are not endorsing the tribal initiative, staking out an official stance of neutrality. But when they line up against Big Gaming’s alternative, we know darn well where their sympathies lie.

Posted on July 11, 2022September 26, 2023 by David Mckee — Leave a comment

Macao is closed; Mixed signals from the Midwest

Effective today, all casinos in Macao have closed, in governmental reaction to a spike in Covid-19 cases. “Only essential businesses like supermarkets, gas stations, and pharmacies will remain open.” In other words, just when you thought things couldn’t get any worse in Macao, they did. SJM‘s Grand Lisboa is the Covid hot spot, with 13 of the 71 newest cases being spotted in the pleasure palace. At the risk of sounding heartless, this latest turn of events exposes the danger of doing business at the sufferance of an authoritarian regime. Companies vulnerable to the effects of the shutdown include (in diminishing order) Las Vegas Sands, Wynn Resorts and MGM Resorts International. They may pass the pain on to their Macanese workers. When the Las Vegas Review-Journal asked if they would continue paying the idled—through no fault of their own—employees, all three firms clammed up.

Posted on July 8, 2022September 18, 2023 by David Mckee — 1 Comment

Ohio shows fatigue; Macao seizes hotels; Abe assassinated

Since it has been outperforming the broader U.S. market for some time now, perhaps we should not be unduly concerned that Ohio casino revenues are down for three months in a row. Indeed, compared to go-go 2019, they’re still arguably overheated, up 17%. Besides, there was simply so much money that Americans could gamble and lose, and inflationary pressures in non-discretionary areas of the pocketbook cannot be denied. But don’t hit the panic button.

Casinos and racinos in the Buckeye State grossed $189 million last month, 4% lower than the previous June. The pecking order remains pretty much the same, with racino MGM Northfield Park easily out front with $23.5 million (+2%), followed most closely by Jack Cleveland ($22 million, -5%). Hollywood Columbus tumbled 9% but hung onto third place with $21 million, while Hard Rock Cincinnati continues to prosper from its new brand, up 5.5% to $20.5 million. Rounding out the casinos was Hollywood Toledo and its $18 million (-5.5%).

Posted on July 7, 2022September 14, 2023 by David Mckee — 1 Comment

Recovery slowing but still going; Singapore soars

Although gambling revenues in Maryland decelerated somewhat from May, they were still 1% higher than last June and 14% more robust than 2019’s, for a total haul of $163 million. It was basically a two-horse race, with MGM National Harbor controlling 42% of market share to Maryland Live‘s 34.5%. MGM’s category killer grossed $68 million (up 7.5%) while Cordish Gaming‘s rival powerhouse brought in $56 million (down 4%). Horseshoe Baltimore was a distant third with $17 million but achieved a victory of sorts by being flat with last year. (Any month in which Horseshoe is not sliding downward is a good month.) Best of the rest was Ocean Downs with $8.5 million, despite being 3% off its feed, while Hollywood Perryville brought in $7.5 million, a 4% dip. Hardest hit, relatively speaking, was Rocky Gap Resort, down 7% but good for $5 million.

Posted on July 5, 2022 by Bob Dancer — 18 Comments

An Unusual Requirement

I received an offer from a Vegas casino for a 7-day NCL cruise. The offer stated that I had to take a room for two nights to get the cruise.

I called to sign up for the offer. I told the lady I spoke with that I’d take the room if I had to, but we were local, didn’t need the room, and probably wouldn’t stay there. But if it was required . . .

Posted on July 5, 2022September 14, 2023 by David Mckee — 1 Comment

Strip perceives no inflation woe; Union sells out workers health

Truist Securities analyst Barry Jonas recently took a tour of Las Vegas‘ C-suites, meeting with executives of seven companies. He concluded that “Despite market sentiment, operators remain generally positive.” Both the Las Vegas Strip and the recently declining locals market were both deemed “healthy,” while crucial convention business was seen as returning to pre-Covid-19 levels (with prices to match, we might add). Strong product from manufacturers is reported to be propelling higher demand from operators, even in advance of Global Gaming Expo.

Inflation? What inflation? That remained the prevailing sentiment. Or, as Jonas put it, “While downtown operator Circa recently noted seeing some decline in casino revenue from increased gas prices inflation, our meetings noted no impact on Strip visitation and customer spend. One operator notes a possibility of seeing some inflation pressure on margins given rising costs with potential wallet shift from gaming to lower margin non-gaming.” If there’s a dark lining to the silver cloud it’s operators’ reversion to a mentality that gaming is recession-resistant (disproven after the Great Crash of 2008) “with variable cost and pricing structures ability to mitigate revenue declines.”

Posted on July 1, 2022September 26, 2023 by David Mckee — 1 Comment

Atlantic City casinos avert crisis; Congressional absurdity

It was eyeball-to-eyeball and Big Gaming blinked. Faced with probable, heavy losses of business, Borgata—the casino with the most to lose—was first to come to terms with Local 54 of Unite-Here. Terms with most of the majors were reached an hour before the strike deadline, resulting in what union prexy Robert McDevitt called “the best contract we’ve ever had.” Kudos to MGM Resorts International for doing the right thing by its workers. Said McDevitt to reporter Wayne Parry, “We got everything we wanted and everything we needed. The workers delivered a contract that they can be proud of for years to come.” Caesars Entertainment was quick to follow MGM’s lead, with Harrah’s Resort housekeeper Ronnette Lark exulting, “I’ve been here 24 years and we’ve never gotten a raise like this. We got big raises.” How big remains to be seen, pending ratification of the deal and negotiations with the four independent casinos that were spared a strike deadline.

Posted on June 30, 2022September 14, 2023 by David Mckee — Leave a comment

Strip carries Nevada; Atlantic City casinos play chicken

Nevada gambling revenues continued to climb in May, up 6% from last year, hitting $1.3 billion. The results were bifurcated, with tourist-dominated markets up and locals ones somewhat down. The Las Vegas Strip was the most obvious beneficiary, jumping 11.5% to $731.5 million, although Downtown also glittered to the tune of +5% and $79 million. Strip slot revenue vaulted 36% to $391 million on 34% more coin-in. Baccarat win rebounded dramatically—144%—to $131.5 million, despite only 10% greater wagering, while other table games rose 19% to $209 million on 21% larger betting. Numbers like those made up for the rest of the county. North Las Vegas waned 5% to $25.5 million and Laughlin slipped 3% to $47 million. At least the Boulder Strip was flat at $88.5 million while miscellaneous Clark County dipped a point to $140 million. Utah-fed border markets Mesquite ($15 million) and Wendover ($23.5 million) were flat and up 4.5%, respectively. Reno stumbled 4.5% to $63 million while Lake Tahoe wasn’t favored by the sunbirds, drawing $17.5 million for a 14% dive.

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