That widening chasm between DraftKings‘ revenue projections ($2 billion in 2022) and its elusive profitability may be catching up with Jason Robins‘ company. Red ink from 1Q22 was $468 million, way up from 1Q21’s $346 million. Negative ROI shot up from $139 million to $289.5 million. What’s the problem? According to Bloomberg, the company is actually growing revenue ($417 million) and player base (two million added)—but spending ever more to get them. Robins’ answer to these problems is to cite $300 million in vague synergies from buying Golden Nugget Online and to sign former ESPN doofus Mike Golic. Yeah, that’ll really move the needle.
A comedy of errors is playing out in Chicago. After Mayor Lori Lightfoot (D) was reported by the Chicago Sun-Times to have gift-wrapped the winning bid for Bally’s Corp., Her Honor immediately backpedaled, saying, “We have a very specific process, and the process is there is an evaluation committee that’s been hard at work through this process. They will evaluate all the information that has been provided by the three finalists and they will give their recommendation to me.” Evidently Lightfoot didn’t trust her own process or was lying through her teeth, as reports leaked out later that day that Bally’s Chairman Soo Kim was flying to the Second City to be awarded the gaming concession.
The fait accompli went out over the wires yesterday morning, in an official press release in which Lightfoot said, “Following significant analyses and community input on all aspects of our three finalists for Chicago’s casino license, the selection committee and I have chosen Bally’s to move forward in the development of the City’s first integrated casino resort. We are confident that Bally’s Tribune Publishing Center development will shore up the City’s pension funds, create thousands of good-paying jobs, and lead to a bright financial future for our city.” Chimed in Kim, “We would like to thank Mayor Lightfoot and her office for conducting a tough, but fair, RFP process, and selecting Bally’s Chicago as the final bidder for the City’s casino,” Of course it’s “tough but fair” when you’re the winner. Hard Rock International and Rush Street Gaming‘s Neil Bluhm might disagree.
Analysts on Wall Street are going to be ratcheting up their forecasts for Caesars Entertainment for the remainder of 2022. Or so says Deutsche Bank analyst Carlo Sanatarelli. The Roman Empire’s 1Q22 cash flow of $296 million exceeded The Street’s consensus of $287 million. This was in spite of “the potential pitfalls associated with the domestic consumer … [and] the digital losses, all combining to drive the negative narrative.” As for that digital sphere, Caesars expects it to become profitable in two quarters’ time, but not before racking up a $1.5 billion cumulative loss. Meanwhile, the company continues to enjoy tailwinds on multiple fronts, whether it be the cessation of mask mandates in New Orleans or additional room capacity in Atlantic City. Still to be felt are the rebranding of Horseshoe Indianapolis, the expansion of Harrah’s Hoosier Downs and the return of the company to lucrative Lake Charles by year’s end.
I’ve been a professional video poker player for 28 years and played backgammon and blackjack semi-professionally before that. Someone asked me what I’d be doing with my life if I weren’t a professional gambler?
My initial answer was, “I have no idea.” I haven’t had a serious backup plan for decades. I’m confident that I can make money doing what I’m doing, and if I have to give it up because of some medical condition (not in the foreseeable future — but that could always change tomorrow), I have enough put away that I won’t need to work.
According to Deutsche Bank analyst Carlo Santarelli, the 1Q22 numbers for MGM Resorts International were “better than forecast” in Las Vegas and regionally, nor as bad as expected from Macao. Losses from BetMGM were worse than anticipated. Santarelli predicted cash flow of $633 million and Leo the Lion delivered $670 million. The analyst only expects things to get better on the Las Vegas Strip, with high-margin The Cosmopolitan of Las Vegas displacing low-margin The Mirage. BetMGM was a $184 million drag on the balance sheet, more than the $162 million Santarelli was expecting but “the shortfall was not entirely surprising, given the lower hold experienced on the sports side in the period, as well as the spend levels associated with the New York launch. Importantly, MGM continues to outperform in the longer term margin friendly iCasino segment,” he wrote. MGM China contributed [?] a $26 million negative ROI.
Even as Chicago Mayor Lori Lightfoot (D) blunders forward with her megaresort campaign, more voices are being raised in criticism of how the Second City is going about the process. A Crain’s Business analysis determined that “Each location appears to have serious shortcomings when it comes to delivering the greatest possible benefits from a long-awaited city casino.” The conclusion is that Lightfoot is moving too fast in order to garner a quick payday for the city’s “woefully underfunded” pension system.
And the best way to do that, Crain’s argues, is to create a tourist draw, not something that leeches off of existing Illinois casinos. “Maybe a glitzy city casino would lure a few more Hoosiers and cheeseheads. But Indiana, Wisconsin, Iowa and Missouri all have plenty of casinos, limiting the potential market of day-trippers.” And, it argues, casino gambling may cannibalize existing revenue streams like major league sports and a stellar theatre scene.
$75 million or else. That’s extortionate Chicago Mayor Lori Lightfoot‘s latest demand of casino applicants. If you win the bid, fork over the cash. Her Dishonor might settle for ‘only’ $40 million on the barrelhead, followed up by a $2 million ransom the subsequent year. So far only Bally’s Corp. has offered upfront money—$25 million—while its rivals want Lightfoot to settle for the city’s cut on the back end. With the Chicago Tribune (Bally’s), waterfront (Rush Street Gaming), and Soldier Field area (Hard Rock International) sites all being blown raspberries by aldermen and public alike, some are even advocating putting McCormick Placeback into play.
They won’t have much time. Chicago Casino Committee Chairman Tom Tunney wants a final selection by May, with the goal of having the Illinois Gaming Board sign off on the choice by autumn. In the meantime, Lightfoot has been caught playing footsie with Bally’s, charging it only one application fee for two sites. (Rush Street had to pay twice over.) Lightfoot’s office cited technicalities to justify the favorable treatment while Bally’s Chairman Soo Kim, citing his deep pockets, said, “We paid the fees that were asked. Don’t you think we would have sent another $300,000 if they asked us to?” Certainly—but Kim wasn’t asked, another indication of which way Lightfoot is leaning.
Fremont Street Experience will now be ‘branded content’ or, to put it less politely, a big-ass billboard for slot companies. Well, one slot company: Aristocrat Gaming. It’s inked a pact with FSE to present “an action-packed new video … The show highlights Aristocrat’s biggest game themes, which are real fan favorites.” The infomercial debuts this week. No word yet on whether competing game makers can hope for similar exposure but we think not. After all, FSE President Andrew Simon nearly knelt in gratitude, saying, “We are proud that industry leader Aristocrat chose the world-class Viva Vision screen to share their messaging in a unique and one-of-a kind environment.”
Just imagine the buffalo stampedes to come, rampaging from the Plaza Hotel down 1,500 feet of canopy and past eight more casinos. Aristocrat is clearly wagering that all that HD action will make Fremont Street pedestrians want to hit the nearest Glitter Gulch casino for some Aristocrat-branded action. We’ll find out how it works at the next quarterly report. And if it doesn’t play for Aristocrat, some other slot maker will be quick to try it themselves. Happy viewing.
I’ve had an amazing experience that is new to me as a gambler.
I’ve been learning a bit about advantage slots — and playing them with moderate success. I’m not going to go into detail, but some games are the type that if one particular number is above 40 and another particular number is above 30, the player has the advantage for some length of time.
Both the reputations of Resorts World Las Vegas and its president, Scott Sibella, could be besmirched by a Nevada Gaming Control Board investigation. The tentative probe stems from charges made by gambler Brandon Sattler as part of a huge bankruptcy proceeding. Sattler’s accusations include that Resorts World fast-food joint Tacos El Cabron is partially owned by David “Fat Dave” Stroj, a convicted felon, who orchestrated a multi-state, illegal bookmaking scheme and is an associate of the Philadelphia Mob. (Choice Stroj quote: “Palomar [card room] is the best way I can wash the money. I don’t have to report it. I just deposit it at the Palomar and there’s no problems for me.”) Sattler says he’s known Sibella for 20 years and has seen the Resorts World prexy use drugs.
