{"id":841850,"date":"2022-07-22T09:01:26","date_gmt":"2022-07-22T17:01:26","guid":{"rendered":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/?p=31441"},"modified":"2023-09-26T14:51:14","modified_gmt":"2023-09-26T22:51:14","slug":"louisiana-plummets-cool-front-disrupts-summer-gaming","status":"publish","type":"post","link":"https:\/\/www.lasvegasadvisor.com\/blog\/louisiana-plummets-cool-front-disrupts-summer-gaming\/","title":{"rendered":"Louisiana plummets; Cool front disrupts summer gaming"},"content":{"rendered":"\n
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A “cruel, cruel summer” for regional casinos was predicted by Truist Securities<\/strong> analyst Barry Jonas<\/strong> and it’s already arrived in Louisiana<\/strong>, where gambling revenues fell 10% last month. It’s not even keeping pace with go-go 2019 any longer. The statewide gross was $200 million, as visitation fell 8% and spending dipped 2%. Sports betting revenue was a miserable $11 million on handle of $132.5 million. Not much pent-up demand there. Hobbled by renovations, Harrah’s New Orleans<\/strong> fell 14.5% but still easily let its market with $21 million. Also revenue-negative in the Big Easy were Boomtown New Orleans<\/strong> ($11 million, -7.5%) and Treasure Chest<\/strong> ($8 million, -4.5%), while Fair Grounds<\/strong> racino was up 5% to $4 million. Up the river in Baton Rouge<\/strong>, new ownership at Belle of Baton Rouge<\/strong> inherited a property that Caesars Entertainment<\/strong> left at rock bottom ($1 million, -11%), while Hollywood Baton Rouge<\/strong> slid 18% to $5 million. L’Auberge Baton Rouge<\/strong> posted $16 million (-2.5%).<\/p>\n\n\n\n\n\n\n\n

The lucrative Lake Charles<\/strong> market saw L’Auberge du Lac<\/strong> and Golden Nugget<\/strong> deadlocked at $30 million apiece, with the Nugget losing less ground, -3.5% to -8%. Delta Downs <\/strong>contributed $14 million, down 10%. Outlying Boyd Gaming<\/strong> properties Amelia Belle<\/strong> ($3 million, -13%) and Evangeline Downs<\/strong> ($6 million, -12%) weren’t spared from adversity either. Margaritaville<\/strong> easily led the pack in Shreveport<\/strong>\/Bossier City<\/strong> with $19 million (-4.5%), followed at a distance by Horseshoe Bossier City<\/strong> ($13 million, -6%), then Boomtown Bossier<\/strong> ($5 million, -2%). Severe skids were experienced at Bally’s Shreveport<\/strong> ($8.5 million, -28%), Sam’s Town<\/strong> ($3 million, -37%) and Louisiana Downs<\/strong> ($3 million, -36%). It was definitely a tale of the haves and have-nots.<\/p>\n\n\n\n

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Back to that cruel summer. You won’t be surprised as to why some are expecting casino revenues to continue flattening (with a concomitant effect on stocks<\/a>). \u201cWith sustained weakness (namely soaring inflation and gas prices and a downturn in consumer confidence and personal savings rates), we expect to hear more conservative commentary from management teams,\u201d Jonas wrote. \u201cThe key question remaining is around the potential for a wider, lengthy recession and its impact on the historically resistant industry.” He added, \u201cStocks have already taken the hit, factoring in coming fundamental weakness, and there\u2019s precedent for stocks being a leading indicator.\u201d He blamed decelerating drive-in traffic to Las Vegas<\/strong> from California<\/strong> on gas prices, saying we’re only seeing the start of the problem.<\/p>\n\n\n\n

Over at Bank of America Securities<\/strong>, analyst Shaun Kelly<\/strong> remains bullish on 2Q22 but then all bets are off. Still, he calculates that various consumer disincentives will not add up to “meaningful cracks in demand.” A major comeback in convention business has insulated the Las Vegas Strip<\/strong> from the cooling-off, as revenue per available room is up 38% and margins outperform regional casinos. Jefferies Equities<\/strong> analyst David Katz<\/strong> likes MGM Resorts International<\/strong> most on the Strip, and thinks Penn National Gaming<\/strong> and Churchill Downs<\/strong> are best-positioned to ride out difficulties on the regional front, thanks to “execution track records, controllable capital setups, and long-term fundamental positioning.\u201d\u00a0He implied that Caesars’ emaciated stock price was a reflection of the company sky-high leverage, before noting that \u201cIn addition, the market has been focusing on any signs of discretionary spending pulling back, given high inflation and rising fuel costs.\u201d<\/p>\n\n\n\n

\u201cNevertheless, we maintain that regional gaming should be resilient during downturns,\u201d said Katz, who’s downsizing his 2023 projections all the same. \u201cOverall, we favor operators with diverse portfolios and more control over core businesses, namely Penn, Churchill Downs, and Golden Entertainment<\/strong>.” As for Sin City, “we generally believe Las Vegas is in a much healthier state today than in 2008-09, with stable room supply and more headroom in group and convention business recovering. More important, the market today has more sports and entertainment options, with more forthcoming.\u201d Katz touted the much-hyped Flamingo<\/strong> sale as a money-spinner for Caesars, which suggests he’s putting his eggs in leaky basket.<\/p>\n\n\n\n

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In acrimoniously divided, post-Trump America, gaming executives are running for cover<\/a>. CNBC<\/strong>‘s Contessa Brewer<\/strong> asked three top CEOs where they stood politically. In the past, men like Sheldon Adelson<\/strong>, Steve Wynn<\/strong> and Jim Murren<\/strong> were forthright and generally consistent, whether one agreed with them or not. Today’s crop is not made of such stern stuff. MGM has long congratulated itself for being a bulwark of environmentalism and diversity but CEO Bill Hornbuckle<\/strong> threw his workforce under the bus with a craven, \u201cMaking political statements as the CEO \u2026 I don’t know that it’s in everyone’s best interest … I don’t want to lose 30% of our customers. I think we have an obligation to our stakeholders to be very responsible, be moderate, be measured.\u201d Well, at least Hornbuckle’s honest. <\/p>\n\n\n\n

Las Vegas Sands<\/strong> CEO Rob Goldstein<\/strong> was modest. \u201cMy political views shouldn’t matter … not to my shareholders. My political views are not relevant in a public forum.\u201d The closest anyone came to staking out a political position was Wynn Resorts<\/strong> CEO Craig Billings<\/strong>, who remarked that the company’s younger patrons favor businesses \u201cto stand for something and they want them to do it authentically.\u201d (Some of us oldsters care about that, too, Mr. Billings.) Hornbuckle runs a company that operates in a patchwork of pro-choice\/anti-abortion states and he was exquisitely noncommittal about what he would do for those female employees who now find themselves high and dry: \u201cThat issue alone has impacted some of our employees in Mississippi<\/strong> and Ohio<\/strong>, and other states that we operate, so we have to pay attention.\u201d <\/p>\n\n\n\n

Goldstein no longer has that problem, since he presides over a non-U.S. company, albeit one that has aspirations in states as socially disparate as New York<\/strong> and Texas<\/strong>. He offered an ambiguous statement that workers are “our constituents and we want to make sure we’re responsive to them and our customers.\u201d So whose concerns take precedence when push comes to shove? At least Hornbuckle stood by his company’s alignment with the NAACP<\/strong> following the murder of George Floyd<\/strong>. We don’t care\u2014we really don’t\u2014who Hornbuckle, Billings and Goldstein favor in the next election, whose lever they are going to pull. But the interest of their workforce should play a heavy role in their public posture. We were 180 degrees removed from Sheldon Adelson<\/strong> politically but he took care of his employees when it counted most. And we’ll leave it at that. Have a nice weekend.<\/p>\n\n\n\n

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Jottings<\/em><\/strong>: Lake Mead<\/strong> is at a dire 27% of capacity<\/a>, potentially forcing federal intervention regarding the allocation of water. Don’t blame the casinos\u2014our sources say they represent less than 10% of Clark County<\/strong>‘s water use … In Macao<\/strong> “essential businesses and premises” evidently include casinos, whose lockdown will be lifted tomorrow<\/a>. It’s a thread of hope for SJM Holdings<\/strong>, which is teetering on the brink of insolvency … Chicago<\/strong> officials offered a sneak peek of what Medinah Temple<\/strong> will look like as a Bally’s Corp<\/strong>. temporary casino. The exterior will remain subdued but a full makeover is planned<\/a> for the interior. Opening is projected for next June … Here’s a change we like: Gun Lake Casino<\/strong> in Michigan<\/strong> has opened a pour-your-own craft-beer bar. You have your choice<\/a> of 43 brews on tap, with wine and cocktails soon to come. Bravo … Online sports betting and Internet gambling are now legal<\/a> in Peru<\/strong>, taxed at 12%. Most of the levy will benefit tourism promotion and mental health programs … The top names in online travel agencies, including Orbitz<\/strong>, Travelocity<\/strong>, Expedia<\/strong>, Priceline<\/strong> and Hotels.com<\/strong> will stand trial in Nevada<\/strong> for tax evasion<\/a>. They’re accusing of skipping out on hundreds of millions in obligations by buying room blocks at low rates, then overcharging customers for them without<\/em> paying tax on the markup … Congratulations to Boyd Gaming<\/strong> on finishing Sky River Casino<\/strong> in Elk Grove<\/strong>, California<\/strong>, one month ahead of schedule<\/a>. Sky River, which will open in September, is to feature 80 table games and 2,000 slots … North Las Vegas<\/strong> mayoral candidate Pat Spearman<\/strong> (D) has a totally loopy idea<\/a> of what Station Casinos<\/strong> should do with the defunct hulks of Texas Station<\/strong> and Fiesta Rancho<\/strong>: Donate<\/em> them to the city and allow them to be converted into veterans’ homes. Somehow we don’t think that’s going to find any traction.<\/p>\n","protected":false},"excerpt":{"rendered":"

A “cruel, cruel summer” for regional casinos was predicted by Truist Securities analyst Barry Jonas and it’s already arrived in Louisiana, where gambling revenues fell 10% last month. It’s not even keeping pace with go-go 2019 any longer. The statewide gross was $200 million, as visitation fell 8% and spending dipped 2%. Sports betting revenue […]<\/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":[605],"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\/841850"}],"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=841850"}],"version-history":[{"count":0,"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/posts\/841850\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/media?parent=841850"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/categories?post=841850"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/tags?post=841850"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}