{"id":29732,"date":"2021-06-18T09:41:01","date_gmt":"2021-06-18T17:41:01","guid":{"rendered":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/?p=29732"},"modified":"2023-09-14T14:03:37","modified_gmt":"2023-09-14T22:03:37","slug":"louisiana-up-again-draftkings-hit-hard","status":"publish","type":"post","link":"https:\/\/www.lasvegasadvisor.com\/blog\/louisiana-up-again-draftkings-hit-hard\/","title":{"rendered":"Louisiana up again; DraftKings hit hard"},"content":{"rendered":"\n
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Casinos in Louisiana<\/strong> weren’t quite as phat last month as in April but still nudged up 5% overall. In New Orleans<\/strong>, the leader was Harrrah’s New Orleans<\/strong> with $27 million (+1%), followed by Boomtown New Orleans<\/strong>, leaping 21% to $12.5 million. Treasure Chest<\/strong>, which may be moving ashore soon, grossed $9 million (-7%) and Fair Grounds <\/strong>racino checked in with $4 million (+11%). Up in Baton Rouge<\/strong>, category-killer L’Auberge Baton Rouge <\/strong>won $18 million, up a whopping 37.5%, while Hollywood Baton Rouge<\/strong> rose 22% to $6 million and forlorn Belle of Baton Rouge<\/strong> plunged 39% to $1.5 million, which should at least cover the electric bill. Boyd Gaming<\/strong>‘s outlying Amelia Belle<\/strong> slipped 10% to $4 million and Evangeline Downs<\/strong> trotted +1% to $8 million.<\/p>\n\n\n\n

Lake Charles<\/strong> led the state and it was led by Golden Nugget<\/strong>, up 5% to $29.5 million while chief adversary L’Auberge du Lac<\/strong> rose 7% but closed at $27 million. Delta Downs<\/strong> won $16.5 million, up 4%. As for Shreveport<\/strong>\/Bossier City<\/strong>, tops is Margaritaville<\/strong>, vaulting 37.5% to $19 million, leading Horseshoe Bossier City<\/strong>‘s $17.5 million (+13%). We’ll see if the shoe is on the other foot come August, when Shreveport’s smoking ban goes into effect. Eldorado Shreveport<\/strong> leapt 35% to $13 million but all other casinos were also-rans: Boomtown Bossier<\/strong> ($5 million, -2%), Sam’s Town Shreveport<\/strong> ($6 million, -1.5%) and Louisiana Downs<\/strong>\u2014now with 100% less Harrah’s\u2014grossing $5 million, up 16%. Basically, the rich got richer and … well, you know the rest.<\/p>\n\n\n\n\n\n\n\n

Sports betting rules have passed out of the Lege and Gov. John Bel Edwards<\/strong> (D) is expected to sign them presently. This prompted PlayUSA<\/strong> to estimate the Louisiana market as being worth $2.5 billion in annual handle, roughly comparable to Colorado<\/strong>, fed by drive-in traffic from neighboring states, i.e., prudish Texas<\/strong>. That should help compensate for a relative dearth of major-league (but not collegiate) sports. \u201cLouisiana should be able to outperform its relatively small population,\u201d explained analyst Eric Ramsey<\/strong>. \u201cIn fact, as a market Louisiana shares many of the same attributes that have made New Jersey<\/strong> and Nevada<\/strong> sports betting meccas. The state has long been home to a thriving casino industry, New Orleans itself can draw tourists from all over the country, and Louisiana is not bordered by another state that offers both retail and online sports betting.\u201d Take that, Mississippi<\/strong>! Nor will John “Mattress Mack” McIngvale<\/strong> have to drive nearly so far when he wants to have a million-dollar flutter on the Houston Astros<\/strong>.<\/p>\n\n\n\n

Online play will be taxed at 15% and walk-up betting at 10%, and there will be 41 skins. Also, sports betting will be omnipresent, with kiosks at literally thousands of bars, restaurants and truck stops. Operator revenue is projected by PlayUSA to be an annual $200 million. What’s not to like?<\/p>\n\n\n\n

In Pennsylvania<\/strong>, May online wagering hit $447.5 million, which yielded $37.5 million in revenue for operators and $28 million in taxes for Gov. Tom Wolf<\/strong> (D). Not even playoff runs by the Philadelphia 76ers<\/strong> and (briefly) Pittsburgh Penguins<\/strong> could prevent a mild slump from April, though. As you might expect, FanDuel<\/strong>\/Valley Forge Resort<\/strong> led the field with $161 million handle and $17.5 million in revenue. Following in the wake of its dominant performance came DraftKings<\/strong>\/The Meadows<\/strong> ($100 million\/$5 million), Barstool Sports<\/strong> ($43.5 million\/$3 million), BetMGM<\/strong>\/Hollywood Morgantown<\/strong> ($32.5 million\/$2 million) and Bet Rivers<\/strong>\/Rivers Pittsburgh<\/strong> ($19 million\/$1 million). Of the seven other operators, only Parx Casino<\/strong> ($11 million handle) cracked the $1 million mark in revenue and Caesars Sports<\/strong> succeeded again in losing money. Bag that brand, Mr. Reeg! Rivers Philadelphia led in walkup betting, closely followed by Parx.<\/p>\n\n\n\n

Keystone State online casinos won a near-record $111 million, led by Penn National Gaming<\/strong>‘s stable of brands, which yielded $43.5 million. The BetRivers\/PlaySugarhouse<\/strong> exacta grossed $31 million and, though it no longer has a monopoly, Mount Airy<\/strong> accounted for almost all of the state’s $3 million i-poker win. Internet gambling has been a bonanza for the state, generating $1.3 billion in revenue and $433 million in taxes in two years. By contrast, even with an extra year, sports betting has yielded only $581 million and $147.5 million respectively. <\/p>\n\n\n\n

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Speaking of DraftKings, its stock took a dive after a scathing Hindenburg Reports<\/strong> release focused on its relationship with partner SBTech<\/strong>, concluding, \u201cWe think DraftKings has systematically skirted the law and taken elaborate steps to obfuscate its black market operations. These violations appear to be continuing to this day, all while insiders aggressively cash out amidst the market froth.\u201d Among Hindenburg’s indictments<\/a>, it noted that \u201cAround the time of the DraftKings deal, SBTech\u2019s founder spun off another gaming brand that also operated in markets where gambling was banned, transferring it to his brother. The brand was behind a ‘massive Chinese operation’, according to a former employee, contrary to representations made to Oregon<\/strong>\u2019s state lottery. The brand continues to operate in China<\/strong> despite the strict local rules prohibiting online gambling, according to our review of web infrastructure for multiple China-facing gambling sites.\u201d<\/p>\n\n\n\n

The hits just kept on coming. “Unbeknownst to investors, DraftKings\u2019 merger with SBTech also brings exposure to extensive dealings in black-market gaming, money laundering and organized crime. Based on conversations with multiple former employees, a review of SEC<\/strong> & international filings, and inspection of back-end infrastructure at illicit international gaming websites, we show that SBTech has a long and ongoing record of operating in black markets,\u201d with half of SBTech’s sales emanating from markets where gambling is illegal. Hindenburg also zeroed in on an SBTech spinoff called BTi\/CoreTech<\/strong>: \u201cThe CEO selected to run BTi\/CoreTech was formerly an executive of a \u2018binary options\u2019 gambling firm raided by the FBI<\/strong> and subsequently charged by the SEC for deceiving U.S. investors out of over $100 million. Former SBTech employees called BTi\/CoreTech a ‘front’, and said the split preserved SBTech\u2019s (and now DraftKings\u2019) illicit business while shielding the public company from scrutiny. For all practical purposes, it appears that BTi\/CoreTech functions as DraftKings\u2019 undisclosed illegal gaming division.\u201d What’s more, \u201can Asia-focused site tied to a triad kingpin at the center of a Swiss money laundering investigation advertises its use of BTi\/CoreTech technology.\u201d<\/p>\n\n\n\n

Among those pushing back was Credit Suisse<\/strong> analyst Ben Chaiken<\/strong>. “While admittedly it is difficult to have detailed information on legacy business relationships at SBTech (the acquired company), we think the stock reaction is overdone,” he wrote, going on to opine that SBTech was bought by DKNG for its tech platform, not its revenue stream. “Said another way, if SBTech revenue were to go away entirely, we think there would be minimal impact on the DKNG stock.” He added, “is currently operating its betting platform on Kambi<\/strong>, a separate provider of technology. While not ideal, in a worst case scenario, an SBTech issue would not necessarily interfere with betting operations today.” Well, that’s a relief of sorts. DraftKings stock has plateaued around $48\/share, which may not be a bad thing. Like Frank Fantini<\/strong>, we’ve long thought it was overvalued. Call the Hindenburg explosion a ‘market correction.’<\/p>\n","protected":false},"excerpt":{"rendered":"

Casinos in Louisiana weren’t quite as phat last month as in April but still nudged up 5% overall. In New Orleans, the leader was Harrrah’s New Orleans with $27 million (+1%), followed by Boomtown New Orleans, leaping 21% to $12.5 million. Treasure Chest, which may be moving ashore soon, grossed $9 million (-7%) and Fair […]<\/p>\n","protected":false},"author":83928,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[1728],"tags":[],"jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/posts\/29732"}],"collection":[{"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/users\/83928"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/comments?post=29732"}],"version-history":[{"count":0,"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/posts\/29732\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/media?parent=29732"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/categories?post=29732"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/tags?post=29732"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}