Turning point for Illinois?; Cuomo creates a mess

Santa Claus was extra generous to casinos in Illinois last month (and they sure could use a little Kringle largesse). Revenues grew to 6%, visitation was up 5% and spend per visitor rose 1%. All that added up to a winning formula for the Land of Lincoln. In the case of Penn National Gaming, it was a flat month, with Empress Joliet (+6.5%) making up for a miniscule, 1% decline at Hollywood Casino Aurora and a bigger one (-7%) at weak sister Argosy Casino Alton. It was an even better month for Boyd Gaming‘s Par-A-Dice, with revenues up 4%, while Grand Victoria gained half that amount.

Somebody added a rocket launcher to Harrah’s Joliet, whose grosses shot 19% upward. That was even more the case with Caesars Entertainment‘s newfangled Harrah’s Metropolis, soaring 29%. Actually, Penn National was the only company to underperform the market, with parent GLPI‘s Casino Queen dropping 5%. Jumer’s Casino Rock Island ascended 12%, while Rivers Casino may have “only” gained 4.5%, but its $35 million gross was more than its next two closest competitors combined. It’s like Neil Bluhm has a dowsing rod for money.

Anyway, let’s celebrate Illinois’ good fortune and hope it marks a turning point, even as slot routes continue to proliferate. The state’s casinos have taken a beating throughout the Great Recession (not to mention a smoking ban that dampened customer enthusiasm). Here’s hoping this is the first positive report of many to come.

* New York Governor Andrew Cuomo (D) opened a real Pandora’s Box when he requested that a second casino license be awarded to the Southern Tier of the state. This has emboldened Rensselaer Mayor Dan Dwyer to demand that the award of an Schenectady casino to Rush Street Gaming be thrown out and that Rensselaer’s Hard Rock International project get the nod instead. “Hard Rock supporters claim the Rensselaer casino would open earlier and provide more revenue than the other proposals in the Capital Region,” reports the Albany Times Union. Dwyer wants the casino-siting board (consisting of downstate residents) sacked and replaced with an upstate-dominated group.

By encouraging these sorts of monkeyshines, Cuomo may unwittingly succeed in having the whole selection process unravel like a wool scarf. After all, there are 12 other also-rans who may demand a do-over as well. This casino expansion is Cuomo’s creature and he needs to stand by it, not let it collapse into disorder.

* Despite much happy talk emanating from the upper ranks, Foxwoods Resort Casino and Mohegan Sun aren’t doing very well these days, relatively speaking. Former CEO Scott “Woody” Butera‘s work has gone for naught, as Foxwoods defaulted on a $1.7 debt-restructuring pact, negotiating a six-month forbearance to get things turned around. (And if a tribal casino defaults on you, you’re screwed because they’re on sovereign land.) “These matters raise substantial doubt about the Enterprise’s ability to continue as a going concern,” fretted Deloitte & Touche auditors.

Both casinos are still doing boffo numbers: $960 million for Foxwoods, $995 million at Mohegan Sun. But both figures represent a dropoff from 2013. Cash-flow numbers were pretty dire, with Mohegan Sun slipping 11% and Foxwoods tumbling 28%. At least Mohegan Sun CEO Mitchell Etess had the candor to admit that his casino had wasted a lot of money chasing opportunities across the length and breadth of Massachusetts. Etess’ helmsmanship appears to be keeping Mohegan Sun on an even keel but, as for Foxwoods, is it too soon to panic?