Missouri: Penn vs. Penn; Pinnacle debacle deepens

This just in: It’s another winning strategy from those gaming-industry masterminds at Colony Capital. God forbid you’re playing at the Atlantic Club and work up an appetite. Or did Tom Barrack hear about “Stiff of the Year” and wants to get in the race?

There’s no point in revisiting Midwestern casino misery month in, month out. Although Illinois looks to have maybe, finally struck bottom, it’s pretty much the same story everywhere: Consumers are keeping their billfolds shut and “growth” is a mirage. It just means another casino has opened. But there’s a phenomenon in Missouri that’s worthy of remark …

In the Kansas City market, Penn National Gaming has essentially sabotaged one of its existing properties in order to get the coveted Kansas Speedway concession. Argosy Riverside has been screeching downward by high double-digit amounts for eight consecutive months. It fell 23% last month, as a casino that grossed $16 million in the first month of the year just posted $12 million in gaming revenues, skidding past Harrah’s North Kansas City ($15 million, -6%) on its way to third place. Penn is no stranger to scorched-earth tactics: It was prepared to walk away from a fully completed casino in Maryland before it even opened, so don’t tell me CEO Peter Carlino wasn’t willing to sacrifice a big chunk of Argosy business in order to have some Kansas action, too. Although both Isle of Capri Kansas City (-7.5%) and Ameristar Kansas City (-12%, left) having been taking hits, nobody’s reveneus been bled the way Penn has exsanguinated Argosy. (All but Ameristar are hemorrhaging customers, however.)  I guess you’d call it “vampire capitalism.”

Trick or treat. Halloween was all treat for Isle of Capri Cape Girardeau, which grossed $600,000 in the last two days of October. Even if it falls off that torrid pace, it’s still certain to become Isle’s highest-grossing casino in Missouri, though some of that success comes at the expense of Lady Luck (-6%) down in Caruthersville.  The St. Louis market, flat overall, was the same old same-old. Caesars Entertainment continues to let business slide to year-worst levels (-10%) as it skeddadles out of Harrah’s Maryland Heights and Penn moves in. Declines at Pinnacle Entertainment‘s downtown Lumiere Place were negated by gains at its River City, and Ameristar St. Charles (-1.5%) is still Numero Uno. In other words, about what you’d expect.

PNK panic. While it’s still unclear how the Ho Tram Strip could have gone from hunky-dory in the Oct. 24 investor call to ‘potential near-term writeoff’ on Nov. 9, Deutsche Bank analyst Carlo Santarelli was right that the news would keep getting worse. The latest bulletin? Vietnamese gamblers, at least those who live nearby, could be barred from the property and the local power grid may be inadequate to support Ho Tram … not without prohibitive expense, anyway. Since there is no working capital, Pinnacle would have to throw good money after bad. Ever get the feeling that somebody associated with this project didn’t do their homework?

Grow your own. Who figured that Las Vegas‘ next exportable commodity might be education? Even if the Las Vegas Strip‘s growth is stagnant, there’s a need for well-trained casino personnel across the country that gets greater by the day — and the same is even more true of the Pacific Rim. Hence the Konami Gaming Lab at UNLV is a valuable asset to Sin City, one that the Las Vegas Sun explores in detail … Somer Hollingsworth can talk about low taxes until the cows come home but that’s lagniappe to Southern California‘s Free Speech Coalition. No, the Silver State holds a more powerful lure: unregulated sex. According to the Los Angeles Times‘ Nita Lelyveld, porn-movie producers are talking about avoiding new California safe-sex requirements and “Nevada would welcome their business with open arms” and unprotected orifices …

You’ve heard from Carolyn Goodman about “medical tourism.” How about marijuana tourism”? Although “the future … is hazy” (I imagine so!) in Colorado and Washington, it’s pretty clear that Nevada’s #1 cash crop is going unharvested by state authorities, who will desperately need new income sources as gambling continues to dwindle as a percentage of state revenue. You can scarcely throw a rock in Vegas without hitting a stoner and hookah lounges are all the rage. If puking drunkenness is tantamount to a public virtue here, how can pot be a vice? Besides, if Colorado has gambling and legal weed how does Sin City plan to counterpunch?

Although Election Day was an almost unmitigated disaster for Sheldon Adelson, he can, as is his wont, take comfort in the misfortunes of others. To wit, his Singapore rival, Resorts World Sentosa saw revenues plummet 20% (to $432 million last quarter). Genting may have built the first mousetrap in town but Marina Bay Sands has been gradually proving to be the better one.