Richard Munchkin and I received the following question for our mailbag show on Gambling with an Edge. I think my complete answer is too involved to answer on the podcast, so I’m going to attempt it here. The question was:
Both of you were active APs (I think, anyway) during one of the worst recessions of the last century, in 2008. What meaningful effect did this have on casinos and on your work? Did games tighten up? Comps? Do you have any advice for APs in the event of a deep recession (hypothetically of course…)?
Given that Oakland is well and truly fed up with the sorry Oakland Athletics, and with their pinchpenny ways, relocation to Las Vegas may be just what the doctor ordered. However, the manner in which the exit ramp is being greased is somewhat offensive, if not unethical. We’ve long said that MLB Commissioner Rob Manfred has had his thumb on the scale in favor of Sin City. Well, he’s gone from just a thumb to putting his whole fist on the scale, by dint of offering to waive the mandatory relocation fee if the A’s move to Vegas—and Vegas only. That’s hundreds of millions of dollars saved by miserly A’s management and a lot of diñero that won’t be disbursed among other franchises.
Casinos in the Bay State clocked $91 million in revenue last month, a 5% improvement on last year. Encore Boston Harbor led the tiny pack with $58 million, growing 9.5%. Next up was MGM Springfield, performing surprisingly well. It was flat at $21 million, as management appears to have stanched the bleeding. Third was Plainridge Park with $12 million, the only casino to lose market share, down 6%. That place was always living on borrowed time until Encore opened (two years ago this month).
Only Station Casinos would have the huevos to claim to have been “vindicated” for taking bets on sports events whose outcome was already known. For this incredible malfunction (which involved 167 wagers), Station was fined $80,000 by the Nevada Gaming Commission, basically for neglecting to maintain its servers. You’d think Station would have gotten its ducks in a row following a 2018 past-posting scandal involving 350 invalid bets. But no, Station continues to behave as though rules are something by which just chumps have to conduct themselves.
According to Baz Luhrmann‘s new biopic Elvis, the protagonist (uncanny Austin Butler) was a falling angel, self-styled Colonel Tom Parker (Tom Hanks) was Satan and Hell is Las Vegas. Such is the narrative trajectory of this epic, which ends with Elvis Presley as an obese, pill-popping slave to a degenerate gambler’s spending habits. Luhrmann (who directed, co-wrote and co-produced the film) also addresses the elephant in the room, Presley’s appropriation and mainstreaming of African American music, positing Presley as the spiritual love child of a union between Black sexuality and spirituality, hence the shuddering—and much fixated-upon groin from which Elvis’ celebrity supposedly sprang. Having his cake and eating it too, Luhrmann also portrays Presley as a trailblazing civil rights icon, whose closest confidant is B.B. King. It’s a bit much, and the issues of Presley and racial politics are handled much more deftly (and humorously) in the stage musical All Shook Up! The latter has also played Vegas a couple of times and is highly recommended.
We’re back from vacation at last and pick up where we left: Atlantic City. The drop-dead date for contract talks (basically July 1, a full month past the expiry of the collective bargaining agreement) is drawing nigh and no progress is evident. Our East Coast correspondent reports that the rank-and-file are seeking $16/hour in base pay, which is still less than the livable wage of $17.75/hour, so that’s kinda george of them. Casinos continue to whinge about how poverty-stricken they are and say pay no attention to the money being raked in from i-gaming. At this rate, a strike appears more likely than not—and just when the casinos can least afford it. Are they really willing to flush the July Fourth weekend just to make an increasingly indefensible point? Apparently so.
I was walking through Sam’s Town here in Las Vegas on a Tuesday in June. The casino offers 10x points (worth 0.5%) for seniors on Tuesdays and I was scouting the place looking to see if anything might be of interest. Even after all these years, scouting is part of my routine.
I’ve been restricted from receiving mailers for more than a decade at all Boyd properties (including Sam’s Town), so anything I find has to be good enough by itself to be worthwhile, because there won’t be additional benefits coming down the road.
Staring down a seemingly inevitable strike on July 1 by Unite-Here, casinos in Atlantic City could at least take solace in a May that saw gaming revenues leapfrog 9% over last year. The total gross was $233 million, as slot revenues ($174 million) jumped 10.5% on 13% higher coin-in. Table revenue climbed 6.5% on 5.5% larger wagering. Zooming 30% ahead, Borgata banked $63.5 million to Hard Rock Atlantic City‘s $41.5 million (+19%). Hard Rock, incidentally, has been given a two-day reprieve from labor unrest. Ocean Casino Resort—pictured—was third with $25.5 million, gaining only 3% traction. Over at the Caesars Entertainment triumvirate, only Tropicana Atlantic City ($22 million) was revenue-positive, up 8.5%. Harrah’s Resort ceded 1.5% to $21 million and Caesars Atlantic City was down 9.5% to $20 million.
Ongoing improvements at Bally’s Atlantic City helped eke out a 2.5% increase to $13 million, while Resorts Atlantic City slipped 8% to $14 million. Golden Nugget was microscopically ahead of Bally’s at $13 million, a gain of 3%. I-gaming was a boon, good for $136 million, led by Borgata’s 31% market share and Golden Nugget’s 25.5%. Then came Resorts Digital‘s 22%, then way down to Caesars’ 7%, Tropicana’s 6%, Hard Rock’s 4%, Bally’s 2.5% and Ocean’s 1.5%. Internet gambling is great if you’re MGM Resorts International, lagniappe if you’re Bally’s Corp. As for sports betting, it engendered $61.5 million in revenue on $766.5 million in handle.
So we leave on vacation (I checked into the Westin O’Hare and didn’t leave the building for three and half days) and all hell breaks loose in Big Gaming. The breaking story was MGM Resorts International‘s decision to shuck Gold Strike Tunica. It’s unloading a non-core property to the fast-expanding Cherokee Nation Entertainment. The fact that the Cherokee got 1,100 hotel rooms and a casino for a below-average 6X cash flow speaks for itself. Vici Properties remains the landlord and will collect $40 million a year from Cherokee Entertainment. MGM collects $350 million in cash, net, money it will hopefully not sink into the Osaka pit. The transaction is expected to take a year to close.
Although 2022 is still shaping up as a better year than 2019 for the industry, the post-pandemic recovery is definitely cooling. Indiana came out of May down 4% from last year, booking $212 million in revenue. With $36 million, Hard Rock Northern Indiana was the clear winner, besting nearby Horseshoe Hammond, falling a precipitous 24% to $29 million, and Ameristar East Chicago, plunging 34% to $17.5 million. Over to the east, Blue Chip was relatively unruffled, off 3.5% to $12 million. Elsewhere in the state, Hollywood Lawrenceburg was flat at $14.5 million and everyone else was down except Bally’s Evansville, up 7% to $14.5 million. Horseshoe Indianapolis banked $29 million, off 4.5%, and Harrah’s Hoosier Downs was down 1% to $21 million, both of them making up for the leakage up in Hammond.
This is a non-gambling trip report begun last week. Bonnie and I spent a week traveling in Western Canada. We decided that we’re both getting older, maybe we won’t be able to travel in five years, so let’s go out and have some fun. This is the first trip under that program. We had a Panama Canal trip scheduled, but that was cancelled due to the pandemic. We’ll probably do that one next.
We spent 36 hours in Jasper, which is in the Jasper National Park. The only excursion scheduled by our travel agent was a 2-hour motorcycle sidecar trip. This was definitely NOT on my bucket list of things I wanted to do, but it turned out to be one of the best parts of the trip. Our driver/guide was driving a Harley-Davidson with an attached sidecar. Bonnie and I took turns sitting in the sidecar and sitting behind the driver.
We’re on vacation in Michigan until June 23, necessitating a hiatus in S&G programming. I’ll try to check in with you from time to time. In the meanwhile, check CDC Gaming Reports for the latest and greatest in the industry. See you soon!
