Continuing its series of “fireside chats,” Deutsche Bank‘s Carlo Santarelli met with Penn National Gaming executives. They reported that high-end play was pretty much normal but that small-fry players (who represent a quarter of their 
database) are wagering less these days. As for struggling Hollywood Columbus, Penn is taking the long view, saying it faced a similar situation in Kansas City and it could be look at a three-to-five-year ramp up of business. Internet cafe users in Ohio overlap about 10% of Penn’s player base and a ballot initiative to keep the cafes legal has a poor chance of making the ballot. Beyond opening its Ohio racinos, Penn’s priority is to deleverage its balance sheet.
Santarelli also met with Boyd Gaming CEO Keith Smith. The latter spoke of a difficult Las Vegas locals market, although Boyd maintains it can increase cash 
flow through fewer promotions and other cutbacks. “Spend per visit remains roughly 20% off 2008 peak levels (~$50),” wrote Santarelli. Midwestern and Southern results were characterized as “sluggish.” Boyd identified debt repayment as Job One but Santarelli wasn’t completely buying it. “[I] believe management continues to evaluate select growth oriented acquisitions,” provided the deal comes with some means for paying the acquisition price down posthaste.
Smith was “bullish” on Downtown and sanguine regarding Internet gambling in New Jersey, confident the Nov. 26 deadline would be met. The market itself is estimated as being worth $400 … and the brand equity of Borgata could ensure a very big chunk of that for Boyd.
