Today, MGM Resorts International bought the last remaining chunks—Aria and Vdara—of CityCenter from erstwhile Dubai World. They’ll only make a brief stopover in the lion’s den before being flipped to Blackstone Group. Since we’re covering the story for CDC Gaming Reports we’re constrained from elaborating further in S&G … but we’ll link you to in-depth coverage as soon as it goes online.
Update: Read about it in full detail.
May’s gaming revenues from Nevada are in and they are blockbuster. When the Strip is 26% higher than 2019 (winning $655.5 million) and locals play is 25% stronger it is fair to say the recovery has been achieved—and far sooner than expected. One analyst had predicted only a 3% uptick on the Las Vegas Strip. There, slot revenue was $385 million (+24.5%) on 23.5% more coin-in Baccarat winnings fell 97% and haven’t been able to get up—and won’t until international travel returns in a meaningful way. Non-baccarat table games saw 14% less wagering but won 9% more than two years ago. Locals slot revenue vaulted 24% to $219 million and table play yielded $39 million, up 34.5%. May was the first month of 100% capacity in Nevada casinos and players obviously turned out in force, including a substantial number (approximately 60,000) traveling to and from Sin City by air.
Continue reading Merry month of May in Las Vegas; Beehive of activity in Atlantic City
This is a head-scratcher. Despite sports betting sweeping our great country, Scientific Games is opting out of the sports-wagering business. And the lottery biz, too, even though that remains a robust market segment. Reported JP Morgan analyst Joseph Greff, “management noted that its plan is to fully divest these businesses and its goal is to move quickly (process well underway).” An IPO is one of several routes being contemplated for the spinoff. Greff viewed the announcement positively, especially if SGMS uses the proceeds to pay down debt. He estimates the company’s leverage could go from an eye-popping 9.6X equity to 4X. That would have Wall Street breathing more easily. Added Deutsche Bank analyst Carlo Santarelli, this crash diet would leave Scientific with three pillars: SciPlay, slot manufacture and i-gaming. Wrote Santarelli, “These business lines, in aggregate, generated roughly $1.0 bn of 2019 adjusted [cash flow]. SGMS again noted that it believes its digital gaming businesses will be comparable in scope to its land based gaming business in 3 years.” So Scientific is selling the present in hopes of making up for it in the future. It’s a radical move but the company shouldn’t lack for takers.
Continue reading Scientific Games goes on a diet; BetMGM stiffs playerI am a big fan of Malcolm Gladwell. Most of his books deal with research into the social sciences, particularly sociology and psychology and have been best sellers. His latest book, The Bomber Mafia, deals primarily with the philosophies of bombing during World War II, and has not become a best seller — at least not yet.
The words “Bomber Mafia” refer to a group of American pilots in the 1930s stationed at what was then called Maxwell Field in Montgomery, Alabama. These pilots dreamed of more humane ways to conduct wars. They believed that bombing strategic targets made sense, and bombing population centers didn’t.
Continue reading A Look at Malcolm Gladwell’s The Bomber Mafia
This is how it’s done. Or supposed to be done. DraftKings and FanDuel are teaming to back a petition drive to legalize sports betting in Florida. Aimed at the November 2022 election ballot, the resolution would dedicate tax revenues from sports betting to funding for education. As opposed to Gov. Ron De Santis‘ Hard Rock International-controlled setup of sports betting, the proposed constitutional amendment would create an open market. The federal Interior Department is currently scrutinizing the DeSantis compact, which uses a rather absurd construal of ‘tribal lands’ whereby you could place a mobile wager from your back porch and—because it must pass through a Seminole Tribe computer server—it is deemed ‘tribal’ gaming. Also, the Florida Lege is constitutionally enjoined from authorizing any expansion of gambling in the Sunshine State. Even if Interior Secretary Deb Haaland signs off on this misshapen afterbirth of the congress between DeSantis and the Seminoles, litigation at the state level is already in train. We hate to agree with Rob Sowinski of No Casinos but the compact really needs to be struck down.
We don’t know the full details of the DraftKings/FanDuel proposal yet but it appears on the surface to be a more-palatable alternative. One thing Florida Education Champions don’t address is tribal sports betting. Their amendment would simply deal parimutuels and professional sports parks into the action. Seminole Gaming spokesman Gary Bitner fumed that the petition drive “is a political Hail Mary from out-of-state corporations trying to interfere with the business of the people of Florida.” Ah, but it was those same people of Florida who decreed that the Lege had no say in the spread of gaming. Harrumphed Bitner, “They couldn’t stop Florida’s new gaming compact, which passed by an overwhelming 88 percent ‘yes’ vote from Florida’s elected legislators and enjoys 3-to-1 support from Floridians and guarantees $2.5 billion in revenue sharing. The guarantee is the largest commitment by any gaming company in U.S. history.” Constitution be damned! The next hurdles for the PAC are to get 891,589 valid signatures and to have the Florida Supreme Court OK the ballot language. What could hobble them out of the gate is that the window is rapidly closing to collect campaign contributions, capped at $3K apiece as of this Thursday. Petition drives are seven- and eight-figure enterprises, so DraftKings and FanDuel may run out of money sooner than signatories.
Continue reading Florida gets tag-teamed; Penn upbeat on 2021; Vegas room rates soar
No executives? No financing? No problem, right? Big problem! Just ask the nonentities behind a proposed Terre Haute casino. They just got turned down for a license. This almost never happens in “gold standard” Nevada, not because casino projects have their houses in order but because licensing is delayed until the last possible minute, when the casino is a fait accompli. In Indiana’s case, the $125 million Lucy Luck casino hadn’t even broken ground yet. The project is a hand-me-down from discredited Spectacle Entertainment, who dibbed Terre Haute several years ago. “We’re now a year and a half into this process and still talking about things that are prospective in nature,” said an obviously exasperated Indiana Gaming Commission Executive Director Sarah Tait.
Where to go? Back to Square One of the licensing process, provided that the deficiencies noted above are cured. Also, more transparency will be required as to Lucy Luck’s proposed financiers. Hard Rock International, meanwhile, lurks in the wings as a potential savior, having offered to manage the casino. Even so, the covenants for financing Lucy Luck expire June 30 and a June or July groundbreaking is now a fanciful notion. Pouted lead businessman Greg Gibson, “we may reapply, but I’m not sure if we will. Terre Haute deserves this casino, and I wish it could be alongside Lucy Luck Gaming.” Maybe not. Terre Haute deserves casino developers who aren’t all hat, no cattle.
Continue reading Unlucky Lucy; Las Vegas “vibrant;” Secret plan for Atlantic CityWhen I read gambling books, I usually dog-ear pages of interest. With Colin Jones’s book, The 21st-Century Card Counter, I had to change my approach. It made no sense to dog-ear every page, so I just started circling passages and writing notes in the margins. In lieu of a traditional book review evaluating the book, I decided to treat the book like a textbook, and go through its talking points in an N-part series. Here we go!
[p. 5] “This ‘card counting’ thing haunted me. Was it real?” That’s the question I’ve faced and debated publicly for two decades. CJ’s perspective at the time was a bit different from mine. He was wondering if you could really make money, or a living, doing it. I ask the logical follow-up: Even if you could, why would you want to? By the end of the book, the hero CJ answers his own question (yes, card-counting is “real”), but evolves to answer my follow-up (answer: “I wouldn’t”).
Continue reading Colin Jones (S1 E3): What is “Real”?This happened to somebody else in the late 1990s. I think it was at Caesars Palace about four or five owners ago. I don’t think I have written about it previously and it’s worth discussing. I might have some of the details wrong, but overall, it pretty much happened the way presented.
“Al” was playing at Caesars at an event for invited guests. It was the kind of event where you earn one drawing ticket for every $1,000 coin-in. Then at the banquet on the last night, a drawing is held and lots of cash is given away.
Continue reading Going with the FlowFor the amount of vitriol directed at Colin Jones online, you’d think the man eats babies. In reality, he’s guilty of a far greater sin—he wrote a card-counting book, The 21st-Century Card Counter. That book is one pillar of a viral card-counting enterprise also supported by the documentary movie Holy Rollers, the website blackjackapprenticeship.com (BJA), and the in-person boot camps offered from time to time. Before I continue with the multi-part book review I began in my last post, let me address the mild controversy surrounding the book’s author, Mr. Jones (“Jones”? Really?).
As a disclaimer, let me say that other than reading CJ’s book, I have no connection whatsoever to the BJA empire. I’ve never attended a boot camp, and I know CJ only from meeting him a few times at Max Rubin’s annual Blackjack Ball. I won’t bother to start with the perfunctory, empty statement, “He’s a really nice guy,” because that definition of “nice” carries no weight with me. I’ve known friendly talkers who would buy you coffee or pick you up from the airport, but still abuse you and steal six or seven figures from you, so what does “nice” really mean, anyway? But since you asked about CJ, yeah, he’s a really nice guy.
Continue reading Colin Jones (S1 E2): The Devil is Mr. Jones
We were stumped for a lead item until we got this snap from our Atlantic City bureau. One has to puzzle at Borgata‘s cretinous idea of a welcome, particularly its implicit slap at women. Did property President Melonie Johnson sign off on this affront?
Next door in Pennsylvania, terrestrial casinos are still having a difficult time catching up to the palmy days of 2019, being 2.5% behind last month for a gross of $278.5 million. Surely what we’re seeing is a saturated market, exacerbated by a string of new-casino openings that has not yet played out. Parx Casino continued to be untroubled, up 5% to $56 million. As for the other Philadelphia-area casinos, Philadelphia Live‘s tight-fisted marketing habits may be catching up with it. It slipped incrementally behind Rivers Philadelphia (still -33%), which came in $300K ahead of Live’s $19 million. Valley Forge Resort suffered a bit, down 10% to $11 million and Harrah’s Philadelphia suffered a lot, sliding 21.5% to $16.5 million. Cordish Gaming won $8.5 million at Live Pittsburgh, while competitors Rivers Pittsburgh ($28 million, -14%) and The Meadows ($16.5 million, -23%) felt the pinch. Rivers Pittsburgh, meanwhile, is upping its game with a $60 million hotel.
Aside from Parx, the only revenue-positive casino in the state was Mount Airy, up 8.5% to $17.5 million. Mohegan Sun at Pocono Downs was down 12% to $18 million and Wind Creek Bethlehem won $36.5 million, a -16.5% slippage. Presque Isle Downs dropped 16% to $10 million, Hollywood Penn National made $20 million, off 8% and Lady Luck Nemacolin tumbled 29% to $2 million.
Continue reading Same to you, fella; Mega-Jottings