{"id":863446,"date":"2024-08-01T13:10:15","date_gmt":"2024-08-01T20:10:15","guid":{"rendered":"https:\/\/www.lasvegasadvisor.com\/shop\/?p=863446"},"modified":"2024-08-01T13:10:18","modified_gmt":"2024-08-01T20:10:18","slug":"las-vegas-was-hot-in-june","status":"publish","type":"post","link":"https:\/\/www.lasvegasadvisor.com\/blog\/las-vegas-was-hot-in-june\/","title":{"rendered":"Las Vegas was hot in June"},"content":{"rendered":"\n

We’re not referring<\/strong> to the weather (although that too). Las Vegas Strip<\/strong> casinos were up 4% in June and 23% hotter than they were in the early summer of 2019. They grossed $758.5 million, fueled in part by tight baccarat hold (wagering was 4% down, though). Casinos played luckily at table games, winning 19% more than last year (for $335 million) on 10% higher betting. Their luck ran out at the slots, down 3% to $382 million despite 42% greater coin-in. A 2% uptick in visitation helped drive the numbers as well.<\/p>\n\n\n\n\n\n\n\n

Locals revenue, up 6%, was deceptive as June 29-30 fell on a weekend, meaning that slot winnings from those days will be rolled into July’s numbers. Even so, the haul was impressive, especially as it was a 29% vault over 2019. All jurisdictions in Southern Nevada<\/strong> were revenue-positive but two: Laughlin<\/strong> was flat with $37.5 million and North Las<\/strong> Vegas<\/strong> dipped a point to $23 million. Downtown<\/strong> cruised with $66 million (6%), while the Boulder Strip <\/strong>was up 2% to $73 million and miscellaneous Clark County<\/strong> soared 9.5% to $147 million, undoubtedly propelled by Durango Resort<\/strong>. Utah<\/strong>-facing Mesquite<\/strong> was up 3.5% to $14 million, while similar Wendover<\/strong> gained 6.5% to $22 million. The northern tier of the Silver State didn’t fare nearly so well. Reno<\/strong> dropped 7% to $64 million, Sparks sputtered<\/strong> -13% to $13.5 million and Lake Tahoe<\/strong> was drained 12% to $19 million. The Vegas boomlet, you should know, was accomplished with 3% less tourism than in 2019. Room occupancy ran 85% (91% on weekends) in a diluted inventory and room rates were up 6%.<\/p>\n\n\n

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Cash flow generated<\/strong> by MGM Resorts International<\/strong> came out marginally ahead of where Wall Street<\/strong> had it. However, such outperformance was put in the shade by losses from BetMGM<\/strong>, #3 in the U.S. but still limping along. “All in all, a nice beat<\/em>,” wrote J.P. Morgan<\/strong> analyst Joseph Greff<\/strong>, who observed that “MGM likely delivered what will be the only 2Q24 Macau upside results from any of the U.S. listed operators<\/em>.” Bravo! Other cause for good news from MGM included the Marriott International <\/strong>partnership, which has now logged 410K room nights booked. Marriott-derived customers are spending $50 more per day than the online-travel-agency customers they’re displacing and generating $100 more per night in ADRs. Said MGM execs, \u201clooking ahead at our pace, room rates on the books in Las Vegas are up year-over-year for every month in the third quarter, and group rooms on the books are pacing up mid-single digits for the rest of 2024 and 2025<\/em>.\u201d<\/p>\n\n\n\n

Now for the bad news. The Las Vegas Grand Prix<\/strong> ain’t looking so hot. After an “incredibly strong” 2023, this year’s race is betraying softness in ticket sales, which is depressing hotel rates in turn. Aria<\/strong>, Bellagio<\/strong> and The Cosmopolitan of Las<\/strong> Vegas<\/strong> are suffering most. Greff thought this was a wake-up call to F1<\/strong> to sell more tickets, although $30 million less cash flow is no joking matter. “We see the soft F1 outlook plus a lot more commentary on BetMGM\u2019s 2H24 investment and share of EBITDA losses without direct support from MGM as reasons why the stock isn\u2019t reacting to a good quarter and net overall outlook<\/em>,” wrote Greff. Even so, he raised his cash-flow forecast for MGM’s Las Vegas Strip<\/strong> assets to $3.2 billion, up from $3.1 billion. However, he pushed his $57\/share price target back a full year, to the end of 2025.<\/p>\n\n\n\n

As for BetMGM, it’s looking at another ROI loss, this time $38 million. That’s a downpayment, as it were, on an expected $250 million in negative ROI by year’s end. Noted the analyst, “BetMGM\u2019s results reflect the heavy customer acquisition period around the North Carolina<\/strong> launch in March, unlike other operators’ 2Q24 reports<\/em>.” At least the MGM regional casinos were said to be stable, and the effects of the MGM Grand Detroit<\/strong> strike, as well as the September 2023 cyber-debacle have abated.<\/p>\n\n\n

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Like Greff, Deutsche Bank <\/strong>stock boffin Carlo Santarelli <\/strong>stuck by a $57\/share target, albeit with a “Buy” rating. Less than fazed, he called the 2Q24 results “encouraging.” He did allow that BetMGM “remains perplexing.” Still, he admitted that the Formula One<\/strong> comparisons with 2023 would be challenging and wrote, “While we do not believe the F-1 commentary should be the takeaway from the call, it admittedly is likely to be just that, despite the fact that management noted the swing factor between a good F-1 and a less than stellar event, is about $30 m<\/em>m.” He also felt that this was a welcome dose of reality for The Street, which was overestimating MGM’s 4Q24 results in advance. Santarelli also noted, not in so many words, that the F1 softness also reflected sky-high 2023 hotel rates that were now coming back to earth.<\/p>\n\n\n\n

“Pertaining to the regional segment, management noted that the middle to high end customer segment is still pretty strong, while the lower end of the database has seen some softening<\/em>,” Santarelli chronicled, which certainly jibes with what we’re hearing from all points of the compass. Falling somewhere between Santarelli and Greff, Truist Securities<\/strong> analyst Barry Jonas<\/strong> deemed the quarter “solid,” allowing for the ominous F1 color. He also had a “Buy” rating on MGM with a $58 target. “Success continues to be driven by high-end properties, responsible for the ‘vast majority’ of topline growth. MGM continues to invest here, with 75% of 2024 domestic capex targeted on these properties<\/em>,” Jonas observed. Room rates on the Strip climb every month, helped along with a refreshed convention center at Mandalay Bay<\/strong>. In Macao<\/strong>, MGM is growing revenues and maintaining a disproportionate, 16% market share without significant increases in capital spending.<\/p>\n\n\n\n

But BetMGM could not be swept entirely under the rug. On the upside, live-dealer content is now being streamed from MGM’s signature properties in Las Vega<\/strong>s, contributing at a 22% share of national iGaming play. Strength in iGaming is somewhat making up for a pummeling MGM has taken in sports betting. Jonas noted that MGM leadership has pushed its projection of $500 million ROI back from 2026 to “in the coming years.” That’s a lot of margin for error.<\/p>\n\n\n

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Citing “<\/strong>record results<\/strong> at the Kentucky Derby<\/strong>, strength in land-based gaming and ramp upside of Terre Haute<\/strong> following its opening<\/em>,” Jefferies Equity Research <\/strong>analyst David Katz<\/strong> made the bullish case for Churchill Downs<\/strong>. The company’s $891 million in 2Q24 bested The Street’s $862 million forecast, while cash flow came in at $445 million, up from the expected $410 million. In addition to its controversial slot parlor in Virginia<\/strong>‘s Henrico County<\/strong>, CHDN is focusing on a slot parlor in Oak Grove, Kentucky<\/strong>, as well as its The Rose<\/strong> casino in the Cavalier State. Jonas agreed that these were “strong results with more growth ahead<\/em>.”<\/p>\n\n\n

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Jottings:<\/em><\/strong> Boyd Gamin<\/strong>g is going half-in<\/a> on Henderson<\/strong>‘s growth spurt. It’s investing an unspecified amount to tear down Jokers Wild Casino<\/strong> and replace it with Cadence Crossing<\/strong>. But Boyd is stopping short of a full demolition of its strategically located complex in the area … The Mirage<\/strong>, now closed, is donating two signs to the Neon Museum<\/strong>. Alas, the museum also has to take the creepy<\/a>, 17-foot-tall statue of Siegfried & Roy<\/strong> that used to haunt pedestrians on the Las Vegas Strip<\/strong> … Fresh from a sports debacle<\/a> in Arizona<\/strong>, the Sahara<\/strong>‘s owner, Alex Meruelo<\/strong>, is talking up minor-league hockey in Reno<\/strong>. The projected team would play in a 10,000-seat arena to be built near Meruelo’s Grand Sierra Resort<\/strong>. Thankfully, the arena does not appear to be being built with public funds … It looks like $405 million Ho-Chunk Beloit<\/strong> (above<\/em>) is finally going to be built, with a massive casino and hotel<\/a>. Somewhat in the manner of the cart before the horse, the casino will precede the requisite parking garage … On a more modest scale, the Muscogee Nation<\/strong> in Oklahoma<\/strong> is planning $100 million<\/a> Coweta Casino Hote<\/strong>l. The hotel will only boast 46 rooms, while the casino will be confined to 750 slot machines … Also in progress is Saracen Casino Resort<\/strong> in Arkansas<\/strong>. The temporary casino will soon be superseded with a new facility<\/a> and a 323-room hotel … Rep. Dina Titus<\/strong> (D) continues to campaign in the House of Representatives<\/strong> for repeal of the federal excise tax on sports wagering. (You go, Prof. Titus!) Now Sens. Catherine Cortez Masto<\/strong> (D) and Cindy Hyde-Smith<\/strong> (R) are executing the other half<\/a> of a pincer movement in the upper house. Their bill is called the Withdrawing Arduous Gaming Excise Rates Act<\/strong>. WAGER, geddit? Clever, huh?<\/p>\n","protected":false},"excerpt":{"rendered":"

We’re not referring to the weather (although that too). Las Vegas Strip casinos were up 4% in June and 23% hotter than they were in the early summer of 2019. They grossed $758.5 million, fueled in part by tight baccarat hold (wagering was 4% down, though). Casinos played luckily at table games, winning 19% more […]<\/p>\n","protected":false},"author":83928,"featured_media":857271,"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":true,"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":"https:\/\/i0.wp.com\/www.lasvegasadvisor.com\/shop\/wp-content\/uploads\/2024\/04\/Mirage.jpg?fit=2016%2C1512&ssl=1","_links":{"self":[{"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/posts\/863446"}],"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=863446"}],"version-history":[{"count":3,"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/posts\/863446\/revisions"}],"predecessor-version":[{"id":863454,"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/posts\/863446\/revisions\/863454"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/media\/857271"}],"wp:attachment":[{"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/media?parent=863446"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/categories?post=863446"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/tags?post=863446"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}