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Las Vegas A-Z; Bally’s bumbles; Smoke gets in your face

Last week, Deutsche Bank analyst Carlo Santarelli hit town and gave a rundown of the major players in Sin City. His overall theses can be found at CDC Gaming Reports. Basically, it boiled down to Macao great, Las Vegas Strip excellent, Las Vegas locals very good and regional casinos a bit iffy. But he also looked at a number of operators in granular detail and that is what occupies us today.

Boyd Gaming expects little or no impact from the debut of Durango Resort. If there is any, it will be felt at Suncoast. The expected result was described as “competitive strategy changes,” as Boyd is confident of keeping its Suncoast customers. On the plus side, growth in the Las Vegas Valley is likely to redound to the benefit of Aliante Casino. Rival Station Casinos read the tea leaves right on this one—but 15 years prematurely. In light of Boyd’s heavy exposure—seven casinos—to the Gulf Coast, management allowed that they are “actively dissecting” the underperformance of Mississippi and Louisiana. For one thing, unrated play (which is soft) is higher in this region. Also, the relative poverty of these two states means that they’re where macroeconomic challenges will be felt first. In the Midwest, Blue Chip and Kansas Star have shaken off the impact of ‘historical horse racing’ machines. Belterra Resort, not so much. Boyd seems likelier to be a buyer than a seller these days, particularly if something digital complements its online assets.

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Pennsylvania soaked; Texas, Cubed; Mega-Jottings

That old gaming-industry equation that more = more is getting tested in Pennsylvania. On a sheer, gross-gaming-revenue basis, last month’s $297.5 million haul was down 4% from last year but up 7% from the ‘old normal,’ 2019. However, when looked at on a same-store basis, casinos were hurting: 5% down from last year and 10% off the 2019 pace. Whether it was new competition like Parx Shippensburg or a sharp drop in table revenue, there were plenty of factors impacting Keystone State gambling and not enough gamblers to go around a fast-expanding industry.

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All Atlantic City, all the time; Bally’s blunder

Casino winnings in Atlantic City dipped a bit last month, down 1.5% to $231.5 million. Slot revenues led the way, down 3% on flat coin-in. Table games actually did better, up 3% despite flat wagering but A.C. is a slot player’s town. Only less weekend day this year didn’t help, either. Only two casinos were revenue-positive in April: The Golden Nugget courted enough low rollers to gain 6.5% to $13 million, while Ocean Casino Resort surged 30% to reach $34 million, hard on the trail of Hard Rock Atlantic City ($39 million, -4.5%). New-look Borgata sputtered somewhat, down 6% to $58 million, still good enough to kick everyone else’s patootie. Last place went to Resorts Atlantic City, tumbling 13% to $12.5 million. Golden Nugget’s uptick wasn’t enough to overtake Bally’s Atlantic City ($14 million), in spite of the latter’s 4% setback. That leaves the Caesars Entertainment threesome, with Caesars Atlantic City (-3%) and Tropicana Atlantic City (-13%) all knotted up at $19.5 million. No surprise, Harrah’s Resort did best with $21.5 million, although it dipped 6%.

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Massachusetts up, Indiana, Louisiana down; Miller’s folly

Gambling revenues nudged upward a bit in Massachusetts, rising 2% from a year earlier. April’s numbers had Encore Boston Harbor far in the lead with $64 million but flat year/year. MGM Springfield (shown) had quite a good month, up 5% to $24 million, while Plainridge Park did almost as well, rising 4% to $13.5 million. Sports betting was lucrative, bringing home $60 million on $579 million in handle. Favorite son DraftKings scored a much-needed win with $29 million in revenue, followed by FanDuel‘s $22 million. (The two had been deadlocked last month.) WynnBet tumbled below the Mendoza Line, while Barstool Sports slumped to $2 million after a strong-ish start and BetMGM fell way back to $5 million, more indications that revenue was flowing DraftKings’ way. Caesars Sportsbook held its ground with $2 million.

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Which One is Better?

I’m going to present a case about a Caesars property with conditions that may not exist anywhere. I’m trying to address how I would figure things out if this property did exist. I know many of my readers would prefer I do all the calculations for their particular casino and tell them, “Just do this.” I can’t do that. There are thousands of casinos out there with a different game mix at each one. And the game mix is different for quarters than it is for dollars than it is for higher denominations. And to top it off, I have readers who insist on playing Double Double Bonus even if there are numerous superior games EV-wise.

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Fanatics and freeloaders; Texas fails twice over

In its frenetic effort to gain market share in the U.S., Fanatics has cut a deal with outgoing PointsBet. For the relatively cheap price of $150 million, it is buying the American (but not Canadian) operations of PointsBet, which tells you something about how badly PointsBet wants to get out of the Land of the Free. Fanatics beat Penn Entertainment and Bally’s Corp. to the punch, although it’s not clear what Bally’s inchoate sports-betting operation would have gained from yet another acquisition. PointsBet’s reason for quitting the scene is quite simple: It just doesn’t have the moolah to stay the course to profitability, so it’s getting out while it’s behind. Among those taking a bat on their PointsBet investment will be NBC Universal, which backed a loser. If the PointsBet gaming licenses currently valid devolve to Fanatics, the latter will have made a head start toward getting into 12 states by late August. Fanatics claims it has a 10-year business plan but OSB moves fast. It’s already five years old in this country and the market share has ossified around four or five operators.

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Illinois up, Missouri down; Golden fails to glitter

New product lifted Illinois‘ gambling grosses last month, as same-store revenues slipped 1%. The overall haul was $128 million and much of the propulsion came from The Temporary at American Place in Waukegan and its $7 million take. Hard Rock Rockford rocketed 21.5% to $6 million, while Rivers Des Plaines dipped 2% but still lapped its competitors with $45.5 million. Among the older riverboats, Grand Victoria was down 2.5% to $13.5 million, Hollywood Aurora did the same for $9 million and Hollywood Joliet actually gained 4% to $8 million. (Yes, we’re somewhat surprised.) Harrah’s Joliet nudged down a percentage point to $12 million.

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Adios, Tropicana; Wynn’s beat goes on; Sex & OSB

As much as we sensed it was coming and were resigned to it, it’s sad to know that the Tropicana Las Vegas has been marked for imminent death. The Las Vegas Strip dowager is showing her years, admittedly, but she’s the last remaining vestige of classic Vegas, especially after Sam Nazarian disemboweled the Sahara and the Riviera went the way of all flesh. Just when Station Casinos thought it was going to see a big real estate payday, it was double-crossed by the Oakland Athletics. Turns out the A’s had been playing footsie with Bally’s Corp., which did a great job of pretending nothing was transpiring at the Trop. Under the new deal, which was sniffed out by Howard Stutz, the A’s would build a nine-acre $1.4 billion stadium atop the ex-Trop, with Bally’s holding onto 25 acres for future redevelopment.

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