{"id":883591,"date":"2025-04-21T09:38:23","date_gmt":"2025-04-21T16:38:23","guid":{"rendered":"https:\/\/www.lasvegasadvisor.com\/shop\/?p=883591"},"modified":"2025-04-21T09:41:25","modified_gmt":"2025-04-21T16:41:25","slug":"ballys-race-to-the-bottom","status":"publish","type":"post","link":"https:\/\/www.lasvegasadvisor.com\/blog\/ballys-race-to-the-bottom\/","title":{"rendered":"Bally’s Race to the Bottom"},"content":{"rendered":"\n

Never able to resist the sight of an open mike, Bally’s Corp<\/strong>. Chairman Soo Kim<\/strong> has been doing interviews Down Under, on the subject of his acquisition (at a rock-bottom price) of troubled Star Entertainment.<\/strong> The results were even more dismaying than one feared. Kim’s message to Australia<\/strong> about Star: “Everything you knew is over<\/em>.” Kim told the Sydney Morning Herald<\/em> that “the company\u2019s luxury casinos will need to lose some of the glitz and glamour as they start life over from scratch<\/em>.” That’s right. He’s going to reinvent the company’s three state-of-the-art casinos as\u2014Guess what?\u2014grind joints.<\/p>\n\n\n\n\n\n\n\n

Give Kim credit for acknowledging the obvious: Bally’s can’t (and now won’t) do high-roller business. It’s not in their low-roller DNA. But aforesaid business comprises 30% of Star’s revenue<\/a>. And Kim’s plan is just to piss that down the tubes. Can he afford to?<\/p>\n\n\n\n

If Crown Resorts <\/strong>hasn’t penned a thank-you letter to Kim for all the VIP business it’s going to pick up, it better do so right away. Rather than try and learn<\/em> the VIP biz, Bally’s opting to chuck the baby out with the bathwater, reinventing an upscale brand (something admittedly alien to Bally’s) in favor of reinventing Star as a bottom feeder. Better Kim should have passed on Star than buy a company whose business orientation is 360 degrees from Bally’s, then attempt to yoke the two together. It’s matter and antimatter on a collision course.<\/p>\n\n\n

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Ignoring his own high-end pretensions (or delusions) in Chicago<\/strong>, Las Vegas <\/strong>and New York City<\/strong>, Kim proclaimed, \u201cWe don\u2019t currently operate casinos that look like this. I agree with the metaphor that we need to burn down and start again<\/em>.\u201d Sounding even more delusion still, Kim aimed for the lowest tranche of Aussie gambling, saying, \u201cI think there is a happy medium between pubs\/clubs and a VIP-focused business<\/em>.\u201d That’s like saying there’s a happy medium between scary Aztec Inn<\/strong> in Las Vegas’ Naked City and Bellagio<\/strong>. No, Bally’s doesn’t operate any casinos that look like Star’s\u2014but it’s scheduled to in the Windy City, and thinks it will in Sin City and Gotham. So maybe it ought to learn the ropes while it has the chance. No, that would make sense, something Bally’s has never been too good at.<\/p>\n\n\n

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Before Kim can get around to trashing the Star brand, his team is going to have to stanch the runaway bleeding. Star lost $192 million just in the last six months<\/a>. It’s now worth only $183 million … less than Kim paid for it. Star’s three casinos\u2014in Sydney,<\/strong> Brisbane<\/strong> and on the Gold Coast<\/strong>\u2014all have had their licenses suspended, and massive fines for money laundering, probably in the neighborhood of $134 million, is still incoming. Kim has inherited 4,647 slot machines, 516 table games, 2,714 hotel rooms and 8,000 employees … and doesn’t appear to have a fucking clue what to do with them. He bragged, \u201cWe are willing to put our money where our mouth is and try to see if we can\u2019t impact the operations and improve it so these assets do achieve their potential,<\/em>” conveniently forgetting that Bally’s has scant borrowing capacity and well under $200 million cash on hand.<\/p>\n\n\n\n

At least Kim can count on news outlets sufficiently<\/a> naive as to refer to his tatty portfolio of also-ran casinos as an “empire.” We got a good laugh out of that one. Bally’s isn’t tops in any market unless you drill down to Evansville<\/strong> or Shreveport<\/strong>. It’s a third-rate operator for third-tier markets. And that’s its Rx for Star. Be afraid. Be very afraid.<\/p>\n\n\n

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Wind Creek Bethlehem<\/figcaption><\/figure><\/div>\n\n\n

Casinos in the Keystone State<\/strong> didn’t get the memo that they were supposed to be back to normal last month. Revenues dipped 3% at brick-and-mortar properties, subsiding to $304.5 million. Three casinos were revenue-positive and not the obvious ones. Cult favorite Lady Luck Nemacolin<\/strong> leapt 16% to $2.5 million, one of its best months ever. Heartiest congratulations to them. Similarly, struggling Hollywood Penn National<\/strong> had a 4.5% surge to $15 million. One casino you’d anticipate doing well was Wind Creek Bethlehem<\/strong> and indeed it was up 3% to $49 million. That didn’t quite bring it even with Parx Casino<\/strong>, down 1.5% but still raking in $52 million. The greater Philadelphia<\/strong> area was, other than Parx, pretty woeful by its own standards. Philadelphia Live<\/strong> slid 7% to $22 million and Rivers Philadelphia<\/strong> dropped 8% to $19.5 million. Further back where Valley Forge Resort<\/strong> ($12 million, -6%) and charmless Harrah’s Philadelphia<\/strong> ($11.5 million, -7%), the latter looking like a permanent occupant of last place in the market.<\/p>\n\n\n\n

In the Pittsburgh<\/strong> market, Rivers Casino<\/strong> was down 7% to $30 million, while Hollywood Meadows<\/strong> ceded just 2% to $16.5 million and Pittsburgh Live<\/strong> dipped but 1% to $12 million. Then again, neither The Meadows nor Live are known to have showered their players with sewage<\/a> from faulty pipes. Mohegan Pocono <\/strong>slid 4.5% to $18.5 million, Mount Airy Resort <\/strong>ceded 3% to $16 million and Presque Isle Downs<\/strong> was down 3.5% to $9 million. Parx Shippensburg<\/strong> had a decided setback, dropping 9.5% to $3.5 million, Hollywood York<\/strong> was down 3% to $9 million and Hollywood Morgantown<\/strong> dipped 4% to $6.5 million.<\/p>\n\n\n\n

But if players were gambling less at the casinos, they were doing it a great deal more\u201424.5% more\u2014online. iGaming brought in $238 million, led by FanDuel<\/strong> with an estimated 27% share. it was followed by DraftKings<\/strong> (22.5%), BetRivers<\/strong> (16%), BetMGM<\/strong> (15%), Caesars Palace Online<\/strong> (4.5%) and Hollywood Casino<\/strong> (4%). If iGaming is going to carry the freight for Caesars Entertainment <\/strong>in an oncoming recession, as CEO Tom Reeg<\/strong> claims, it’s going to have to do better than that\u2014for Caesars, that is. As for the sports books, they were chasing losses in the form of 22% higher promotions on 21% less revenue. Dismal 6% hold was realized on higher handle, to the tune of $806 million. In terms of revenue shifts, smaller-grossing operators improved their performance while the big boys tended to suffer. FanDuel plummeted 42% but still finished ahead of DraftKings, $18.5 million to $14 million. BetMGM and PointsBet <\/strong>both improved to $4 million while ESPN Bet<\/strong> slipped to $2.5 million and Caesars Sportsbook <\/strong>couldn’t even reach $1 million.<\/p>\n\n\n

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Speaking of a recession,<\/strong> whether or not it’s arrived yet is not our concern at the moment. But tourism is. According to a new report from Jefferies Equity Research<\/strong> analyst David Katz<\/strong>, travel from Las Vegas<\/strong>‘ two primary international markets\u2014Canada<\/strong> and Mexico<\/strong>\u2014is in a steep slump. It’s gone from up 5.5% in January to down 2.5% in February and plunging 11.5% in March. (Travel to Canada from the United States<\/strong> is down 6.5% as of last month.) That’s what happens when you treat two key trading partners as hostile belligerents. Their population tends to hold it against you. Not that this is a good time for foreign nationals to visit the U.S., not while the Immigration & Customers Enforcement<\/strong> dragnet is sweeping randomly through the populace<\/a> … especially in Sin City, currently being terrorized by ICE, according to Culinary Union<\/strong> news bulletins. Coverage by the mainstream media has been borderline nonexistent.<\/p>\n","protected":false},"excerpt":{"rendered":"

Never able to resist the sight of an open mike, Bally’s Corp. Chairman Soo Kim has been doing interviews Down Under, on the subject of his acquisition (at a rock-bottom price) of troubled Star Entertainment. The results were even more dismaying than one feared. Kim’s message to Australia about Star: “Everything you knew is over.” […]<\/p>\n","protected":false},"author":83928,"featured_media":857950,"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\/Australia.jpg?fit=318%2C159&ssl=1","_links":{"self":[{"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/posts\/883591"}],"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=883591"}],"version-history":[{"count":2,"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/posts\/883591\/revisions"}],"predecessor-version":[{"id":883599,"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/posts\/883591\/revisions\/883599"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/media\/857950"}],"wp:attachment":[{"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/media?parent=883591"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/categories?post=883591"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/shop\/wp-json\/wp\/v2\/tags?post=883591"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}