{"id":29571,"date":"2021-05-10T10:25:05","date_gmt":"2021-05-10T18:25:05","guid":{"rendered":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/?p=29571"},"modified":"2023-09-26T14:56:51","modified_gmt":"2023-09-26T22:56:51","slug":"illinois-surprise-scandal-at-churchill-downs-palms-complications","status":"publish","type":"post","link":"https:\/\/www.lasvegasadvisor.com\/blog\/illinois-surprise-scandal-at-churchill-downs-palms-complications\/","title":{"rendered":"Illinois’ surprise; Scandal at Churchill Downs; Palms complications"},"content":{"rendered":"\n
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Gambling revenue of $108 million out of Illinois<\/strong> last month looks pallid at first glance. But consider this: It was only 6% off April 2019’s pace, when casinos were at full capacity and last month they did it at 50% capacity. So the demand is the definitely manifesting. One of the stars of the market was Grand Victoria<\/strong> (pictured<\/em>), up 1% to $13.5 million. Of course the marquee performer was Rivers Casino Des Plaines<\/strong>, grossing $41 million for a 7.5% lift. Nearby rivals Empress Joliet<\/strong> and Harrah’s Joliet<\/strong> were down 16% and 17% respectively, grossing $7.5 million and $12.5 million. Hollywood Aurora<\/strong> slipped 9.5% to $8.5 million. Mid-state, the tailspin continues for Casino Rock Island<\/strong>, spiraling -37.5% to a meager $3.5 million. Par-A-Dice<\/strong>, meanwhile, dipped 6% to $6 million. In the St. Louis<\/strong> area, Argosy Belle<\/strong> slipped 20% to $3 million while DraftKings Casino Queen<\/strong> was down 23% to $6.5 million. Harrah’s Metropolis<\/strong> was steady as she goes at $6 million.<\/p>\n\n\n\n

Sports betting continues to lag casino reporting by a full month, so we are only now getting the March numbers. Handle was $633.5 million, from which $50 million in revenue was derived, including a tax haul of $6.5 million. Noteworthily, Illinois was just a few whiskers behind Nevada<\/strong> ($641 million handle). Silver State, look to thy laurels! The prohibition of bets on University of Illinois<\/strong> and Loyola College<\/strong> may have put a damper on March Madness<\/strong> action ($177 million), with professional basketball engendering $366 million in wagers. “March Madness helped deliver a huge month for Illinois, but March is essentially a ‘last hurrah’ for the state’s rapid growth,”\u00a0warned PlayUSA<\/strong> analyst Joe Boozell<\/strong>. “Illinois will still be one of the largest U.S. markets because of the population of the state, but it will be difficult to maintain its current status as the U.S. No. 3, much less catch Nevada. No matter how appealing a market, there isn’t any easy way to overcome the inconvenience of in-person registration.” <\/p>\n\n\n\n\n\n\n\n

Colleague Jessica Welman<\/strong> put it more bluntly, saying that “The question now becomes what will happen when the brakes are hit on that growth? Does it alarm lawmakers enough to make a change? Or will Illinois be satisfied with where the sports betting market has been frozen in place?” Operators new to the market are essentially screwed (to inelegantly paraphrase Welman), except for Barstool<\/strong> Sports<\/strong>, which made it across the transom in time before online registration ceased (again).<\/p>\n\n\n\n

No surprise, DraftKings<\/strong>\/Casino Queen was the top operator, with 32% market share. FanDuel<\/strong>, having defected from Par-A-Dice to Fairmont<\/strong> racecourse, was second with handle of $195 million, while BetRivers<\/strong>\/Rivers Casino continues to fade from its early lead, back toward the pack with $107 million. Also-rans were PointsBet<\/strong> ($53.5 million), Barstool ($48 million, impressive given the circumstances) and William Hill<\/strong> (a disappointing $13 million). Operators distant from large population centers are expected to struggle now that in-person registration is once more the rule.<\/p>\n\n\n\n

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Casinos in neighboring Iowa<\/strong> were positively boffo in April, vaulting 30% over 2019 with $160.5 million in win. Yes, there was an extra weekend day but still … Prairie Meadows<\/strong> racino led the state with $22 million, a 28% gain, followed by Horseshoe Casino<\/strong>‘s $18.5 million, up 32%. Such dramatic gains were the norm for the Hawkeye State, too many to enumerate here. The most eye-popping was a moonshot +68% at Rhythm City<\/strong>, airlifting it to $10.5 million. By contrast, Boyd Gaming<\/strong> did ‘only’ 10% better at Diamond Jo Dubuque<\/strong> ($6.5 million) but was 34% higher at Diamond Jo Worth<\/strong> ($10 million). Other major operators shared in the wealth. Caesars Entertainment <\/strong>gained 32.5% at Isle of Capri Bettendorf<\/strong> ($7 million), 26% at The Isle Waterloo<\/strong> ($9 million) and 12% at Harrah’s Council Bluffs<\/strong> ($6.5 million). Penn National Gaming<\/strong> hit it out of the park at Ameristar Council Bluffs<\/strong>, +29.5% to $17 million. Not one<\/em> of the myriad casinos in the state was revenue-negative, although a couple of the smallest were relatively flat. But that’s hardly bad news. Onward and upward.<\/p>\n\n\n\n

In other news, we’re shocked\u2014shocked!<\/em>\u2014that there’s another doping scandal in horseracing, this one affecting the outcome of the Kentucky Derby<\/strong>. Seems that winner Medina Spirit<\/strong> failed a post-race drug test<\/a>, having too much betamethasone (a painkiller) in its system. While Medina Spirit will still run in the Preakness<\/strong>, this test result\u2014if it holds up\u2014could cause the Run for the Roses to be invalidated, with the runner-up, Mandaloun<\/strong>, getting the trophy. And since Mandaloun isn’t running in the Preakness, there would be no Triple Crown winner this year. Churchill Downs<\/strong> has done the right thing so far, including suspending trainer Bob Baffert<\/strong>, five of whose horses have tested positive for doping in recent years. \u201cI got the biggest gut-punch in racing for something that I didn\u2019t do,\u201d Baffert told reporters. \u201cAnd it\u2019s disturbing. It\u2019s an injustice to the horse. \u2026 I don\u2019t know what\u2019s going on in racing right now but there\u2019s something not right.” He ought to know. This shouldn’t be a negative for CHDN stock, coming off one of the strongest Derby Days ever, but the only outright winners are bettors, whose winning wagers on Medina Spirit will be honored. Kudos to Churchill Downs for its handling of this imbroglio.<\/p>\n\n\n\n

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Station Casinos<\/strong> may have cleverly figured out a way to extract extra money from the San Manuel Band of Mission Indians<\/strong>. Seems that some of the high-priced artwork at the Palms<\/strong> was purchased jointly<\/a> by the Fertitta Brothers<\/strong> and Station. So does San Manuel have to pay the Fertittas to relieve them of such items of dubious merit as Damian Hirst<\/strong>‘s Shark<\/em>? Nobody knows yet but the devil remains in the details of the San Manuel purchase agreement. Meanwhile, Station isn’t getting the anticipated lift from the disposal of this beached whale of an asset. Howard Stutz<\/strong> polled analysts and found little love for Station. \u201cWe are probably willing to give them a pass on the Palms investment,\u201d\u00a0said Siebel analyst Steven Wieczynski<\/strong>. \u201cThey tried operating an asset out of their comfort zone, realized they were probably in over their skis and instead of holding on to it and flushing more capital away, decided to part ways. We applaud that.\u201d <\/p>\n\n\n\n

That’d be the sound of one hand clapping. JP Morgan<\/strong> analyst Joseph Greff<\/strong> added, \u201cOur sense is that investors have given zero net asset value credit related to the Palms.\u201d Ouch. Stutz notes that there remains the little matter of an unresolved labor negotiation at the Palms, something drawn out to epic lengths. Our own spider sense is that Station will invoke the federal WARN Act (as it has done in the past) and sack the entire workforce, giving San Manuel<\/a> a blank slate from which to start. Whether San Manuel proves labor-friendly remains to be seen and surely has the Culinary Union<\/strong> on the tip of its collective fanny. The tribe, meanwhile, continues to assiduously seed<\/a> the Las Vegas<\/strong> community, building up brand equity along the way.<\/p>\n\n\n\n

Room rates on the Las Vegas Strip<\/strong> continue to solidify. For the week of May 30-June 5, they’re only 14% off the 2019 pace. This overlaps with the World of Concrete<\/strong> expo at the Las Vegas Convention Center<\/strong>, which doubtless accounts for the healthy comparison. No word yet on 2021 show attendance but it 2019 it drew 60,000 souls. Even so, midweek rates everywhere except Venelazzo<\/strong> (+19%) tend to be saggy. MGM Resorts International<\/strong> is -29%, Caesars is -43% and Wynncore<\/strong> brings up the rear at -47%. Weekends are, needless to say, much better. Las Vegas Sands<\/strong> is 52% higher than two years ago, MGM is +41%, but Caesars cedes 9% and Wynn Resorts<\/strong> is -38%. Gotta work on that. <\/p>\n\n\n\n