This incident happened in 1999 or 2000. I don’t think I’ve written about it before.
The video poker world in Las Vegas was much different then. Casinos had been giving away money right and left to knowledgeable video poker players for at least five years, and many of us were becoming financially very well off. Oh, for the good old days!
Continue reading Is This a Good Idea?
New Jersey giveth, New Jersey taketh away. The priority of the Lege’s lame-duck session will not be ending smoking in Atlantic City casinos but something much nearer and dearer to casino executives’ hearts: Revising the PILOT (Payment In Lieu of Taxes) program. This is the brainchild of outgoing state Senate President Stephen Sweeney (D), prompting one wag to comment, “Perhaps he hopes to get a job at a casino so he can have a third pension.” The big, juicy incentive to get Big Gaming to go along is the exemption of sports betting and i-gaming from PILOT revenue calculations, a big gimme.
The casinos’ compliance will be needed in some cases because their PILOT fees will be going way up, usually if they have been engaged in capex reinvestment. We frown upon this because it creates a fiscal disincentive to improve one’s property (slumlords like Donald Trump, in his Boardwalk days, would have loved it). For instance, Borgata would slide down from $29 million due this year to $23 million in 2025. By contrast, Hard Rock Atlantic City would be walloped with a 100% increase from $8 million to $16 million.
Continue reading Atlantic City: Does it pay to improve?; Bicycle Casino’s flat tire
Massachusetts gaming revenue accelerated to $96 million last month, 23% higher than 2019. Encore Boston Harbor vaulted 37% to $63 million—yes, two-thirds of the statewide gross and well above Deutsche Bank‘s forecast of $55 million. Despite Wynn Resorts‘ dominance, Plainridge Park managed to add 4.5% to its 2019 numbers, grossing $12 million (Deutsche Bank was right on the money with that one). MGM Springfield didn’t exactly struggle but it was only 1% up, winning $21.5 million. Back when the Bay State was initially in play, Wynn sussed out Boston as a real gold mine and has been triumphantly ratified.
American Gaming Systems has been all over the news lately and not in a good way. 15 players are lodging complaints against the online-slot maker. What did they do wrong? Basically, they made the mistake of beating the AGS house. The latter isn’t paying, chalking up player victories to ‘a bug’ in the system, that old saw. This is the kind of thing that gives Internet gambling a black eye and AGS should definitely be investigated further than it has. In one case, player Lisa Piluso won $100,000, was offered $280 and later had that upped to $1,000, presumably AGS’ idea of being george. To us, it doesn’t matter a fig whether the AGS software was corrupted (how very confidence-inspiring) or not. Players expect a game to be on the square and should get one that is.
Continue reading Encore owns Massachusetts; Online slot players hosed
Headlines are still being made by Wynn Resorts this week. Shockwaves continue to reverberate from CEO Matt Maddox‘s surprise retirement, nearly one year ahead of schedule. His departure comes at a delicate point in negotiations with Macao (or should we say ‘dictations’?), where Maddox has been a key player. Also, it has been revealed that he was thoroughly investigated in 2020 by the board over an anonymously filed allegation of misconduct, phoned in over an employee hotline. Had Maddox failed to divorce himself from the boys-will-be-boys culture of Steve Wynn? We’ll never know and he seems to have been cleared of the charge. But still “It’s all very curious,” as Jefferies analyst David Katz said.
In other news, Wynn Resorts’ retrenchment on the i-gaming and online sports betting front began taking concrete shape. In a curt SEC filing, Wynn let it be known that a merger of Wynn Interactive with special acquisition company Austerlitz I is kaput. “While somewhat surprising, the tea leaves were present in the days leading up to the announcement … and WYNN announced that it was pivoting its strategy in sports betting and iCasino, given the irrational customer acquisition behavior they see taking place in the market,” wrote Deutsche Bank analyst Carlo Santarelli. “WYNN noted that it expected 4Q21 losses from the iGaming segment to be considerable ($103 mm 3Q21 loss), and we imagine, 4Q21 losses will exceed those experienced in the 3Q21, given programming of marketing and the busier NFL season.” Santarelli concluded that termination of the JV “could be construed favorably.” Especially for Craig Billings, CEO of Wynn Interactive, who wouldn’t have much to do were he not moving up to the top job at Wynn.
Continue reading Wynn spits out SPAC; Penn slammed; Indiana impresses
Wynn Resorts CEO Matt Maddox is leaving the building, effective Jan. 31. This shockeroo, which inspired a banner headline in the Las Vegas Review-Journal, was trundled out just minutes before the 3Q21 earnings call. Maddox will be succeeded by veteran CFO Craig Billings, who will have the experience and more than enough time for an orderly changeover. Given that former Encore Boston Harbor President Brian Gullbrants is now at the helm of Wynncore, one need not fear that the company will miss a step.
Maddox conceded that he got off to a “rough start” with some, inheriting his job under the cloud of the Steve Wynn sex scandal, “one of the messiest transitions in corporate history.” He didn’t impress us in the early going but proved a steady and proactive leader during the Covid-19 pandemic. Gaming analysts gave rave reviews to both Maddox and Billings, predicting a bright future for Wynn Resorts. As one penned, “barring conspiracy theories around the departure of Mr. Maddox, most notably the implications for the Macau process, of which we think there are virtually none, we expect a smooth transition.”
Continue reading Wynn drops bombshells; Portnoy’s complaint
In hopes of having online sports betting operational in time for the Super Bowl, Empire State gaming regulators announced their picks for the state’s nine OSB license applications late yesterday. Winners were BetMGM (just as Bill Hornbuckle predicted), DraftKings, FanDuel, Caesars Sportsbook, Bally’s, Resorts World, PointsBet, WynnBet and Rush Street Interactive. Each will have to partner with a brick-and-mortar casino and pay 51% of gross gaming revenue in taxes, plus $25 million upfront, making the real winner New York State. Forbes calculates it will see a $493 million windfall by 2025. Losers were led by Barstool Sports, which missed the brass ring, a bitter pill for Penn National Gaming to swallow. Could Barstool’s brash image have been a problem? Others out in the cold are bet365 (which rashly tweeted “I will own New York”), theScore, Fanatics and FoxBet.
Continue reading New York picks winners, losers; Ohio, even Illinois flex musclesEvery fall (except last one because of the pandemic), the world’s largest gaming show meets in Las Vegas for the Global Gaming Expo. All sorts of products directly or indirectly relating to gaming are on display in the exhibit hall, including new slot and video poker games, new table games, new player tracking systems, surveillance products, uniforms, chairs, legal services, architecture firms, etc.
I specialize in video poker and other games of skill. And this always starts with IGT, which still dominates the market for video poker machines.
Continue reading New Video Poker Games at G2E
DraftKings divided analysts with its 3Q21 earnings report. Credit Suisse pundit Ben Chaiken said the company was “moving the ball down the field.” That’s despite revenues of $212 million that well undershot Wall Street‘s expected $238 million, rather like a downfield pass that was picked off for an interception. Chaiken blamed the shortfall on low hold on NFL games and an upswing in marketing costs. DraftKings predicts it will bring in $1.7 billion to $1.9 billion next year, not including money from states that have yet to add sports betting. The Street’s consensus is it will be $1.8 billion inclusive of new markets. Chaiken thinks that DKNG will next try to buy or build a media component, as “the next major theme in sports betting will be the emphasis on sports media, which can be used to more efficiently acquire and retain customers.” If a deal can’t be struck with ESPN, look for a purchase of The Athletic.
Continue reading DraftKings talks big, persuades few; Rancor in RichmondFor those who missed it, the Jack Casino was recently rebranded as a Hard Rock Casino, and its opening night featured Cincinnati’s own legend, Pete Rose (now a Vegas resident), to make the inaugural table-games bet. That was appropriate, entertaining, ironic, and sad. Like having an alcoholic make the toast at a wedding.
Now 80, Pete Rose is not in the Baseball Hall of Fame, despite having the record of 4256 career hits (shoutout to my boy, Ichiro, who is in that conversation). The reason? Because in 1989, Rose was banned from Major League Baseball for life, making him ineligible. Why was he banned from baseball? Did he drive 150+ mph on a Vegas residential street and kill someone? No!! Did he beat his girlfriend unconscious in a hotel elevator? Nooo!!!! Did he threaten to jam a tennis ball down the line judge’s f***ing throat? Not once. Did he get caught video-taping opponents? Did he get caught deflating balls (and then lie about it)? Did he jack up on steroids to boost his power hitting? Did he steal signals and implement a team-wide system to cheat his way to a World Series? As far as I know, he didn’t do any of those things.
Continue reading Sorry, Mattress Mack
At a time when the north Las Vegas Strip is finally heating up, MGM Resorts International has chosen this moment to put The Mirage on the market. Although it’s 32 years old (224 in dog years), The Mirage should fetch an attractive price—albeit short of the 14X cash flow that Jim Murren used to shop it around at, back in the Great Recession. Best case scenario, MGM disposes of a geographically isolated asset at a handsome markup (look what happened with The Cosmopolitan of Las Vegas). It’s a seller’s market and MGM chose its moment wisely. The only drawback for a potential buyer is that only the operational half of The Mirage is for sale, not the underlying real estate. You’d have to settle for being a Vici Properties tenant.
On the upside, you get a lot of real estate to play with: 77 acres, much of it underdeveloped, according to CEO Bill Hornbuckle. He was in altruistic mood, saying “I’m excited for somebody to come in and make it their marquee property.” As for his own company, “we have enough of Las Vegas … We think there is an opportune time, and we think this might be it to sell an asset in Las Vegas. So it, for us, became the obvious one.” No potential buyer or buyers were tipped, although Hornbuckle’s remarks implied he’s looking for someone without a Strip presence. We’re loath to prognosticate. It would be sentimentally pleasing to see Boyd Gaming back on the Strip but …
Continue reading MGM to sell Mirage; Caesars disappoints Wall Street