Isle of Capri Casinos appears to have laid an egg with Lady Luck Casino at Nemacolin Woodlands Resort and is now having to lay off 15% of the workforce. Much of the blame properly goes with the State of Pennsylvania‘s flawed business model for resort casinos, which restricts to play to hotel guests or those willing to pay a $10 fee to play. Valley Forge Casino Resort, however, has not been hurt by these rules, so Isle must take some of the blame … as should Nemacolin’s location: an hour’s drive outside Pittsburgh. Between the dismal prospects of the Steelers and now this, it’s not been a good weekend for Pittsburgh.
Over in Ohio, the novelty factor of casinos has swiftly worn off. Horseshoe Cleveland
was down 17% year/year in August. Caesars Entertainment collected a meager $3.8 million (plus management fees) in this worst-ever month. Even a “george” $6 million in free play didn’t goose action at the slots. ThistleDown Racetrack (up 3.5% from July) continues to eat into Horseshoe’s business, making it a metaphysical certainty that Rock Gaming Caesars will pull the string on a provision that lets them move the track to the Akron market.
Penn National Gaming‘s Hollywood Toledo was off 9% from last year. MTR Gaming‘s Scioto Downs had a rough month, too, down 15%. Hollywood Columbus continues to post well-below-average numbers per slot, while Horseshoe Cincinnati is healthily above average. (Both Hollywood Toledo and Hollywood Cleveland are a bit above the $200/slot/day industry mark of health.)
Scioto Downs is still attractive enough to help motivate Eldorado Resorts to buy out MTR at a huge premium — 44%. The end result of the all-stock deal will be to put Eldorado (with 55% of the overall shares) in the driver’s seat. Eldorado’s Gary Carano will be CEO and MTR’s John Billhimer will hold the presidency. Look for an IPO after the transaction closes next year.
I like both Eldorado and MTR. Two modest yet seem to be fairly run gaming companies. Here’s is to the little guys! Lots of Luck.