Rethinking riverboats in Louisiana; Santa hearts Boyd; High and dry

Baton Rouge is one of the markets that hews to the archaic practice of mandating that godless gambling be conducted over water. H2O has remarkable cleansing properties on filthy casino lucre, it seems. At any rate, even though L’Auberge Baton Rouge (pictured) has taken mighty chomps out of the competition — especially Hollywood Baton Rouge — the Baton Rouge Area Chamber is lobbying the Lege for a change in the law, permitting onshore gambling. It’s part of three-point wish list that also includes sports betting and expanded casino space. Revenues and employment are largely stable, and “Executives at the Belle of Baton Rouge all but promised a move into the 50,000-square-foot atrium adjacent to the hotel if the rules are passed by the Legislature.”

The Louisiana market was frankly blah last month, up just 1%. The comparison was hardly difficult, as last year was flat and the number of weekend days was the same. Boyd Gaming did best (up 7% statewide) and GLPI fared worst, off 14%. Baton Rouge had a tough time of it, with everybody down by double digits. Belle of Baton Rouge ($4 million) sank 19%, while Hollywood Baton Rouge ($5 million) was 14% lower in the water and L’Auberge Baton Rouge ($12.5 million) was a waterlogged -14%. In Lake Charles, L’Auberge du Lac is barely hanging on to its number-one ($27 million) status, down 2%. Golden Nugget shot 27% upward, grossing $25.5 million, while Delta Downs gained 14.5%, posting $15.5 million. In-flux Isle Grand Palais ($9 million) was off 5%.

In New Orleans, Harrah’s was absolutely flat with 2016 but grossed $23 million all the same, its closest competitor being Pinnacle Entertainment‘s Boomtown vessel, down 4% to $9 million. Fair Grounds racino slipped 2.5% to $3 million while Treasure Chest, in Kenner, grossed $8.5 million for a 9% gain. Boyd’s regional properties, Amelia Belle ($3 million) and Evangeline Downs ($6.5 million), were up 7% and down 3% respectively.

That leaves Shreveport/Bossier City, where Horseshoe ($15 million, +5%) and Margaritaville ($12 million, +8%) dwarfed the competition. Among the also-rans were Pinnacle’s Boomtown Bossier ($4.5 million, +1.6%), Boyd’s Sam’s Town Shreveport ($5.5 million, flat), Eldorado Shreveport ($8.5 million, -14.5%) and Harrah’s Louisiana Downs ($3 million, +6%).

* Boyd Gaming isn’t slowing down. After nabbing four casinos from Penn National Gaming, it extended its reach into Pennsylvania, purchasing the Valley Forge Casino. If you visit Valley Forge it’s inescapable, since the casino sits directly across from the park entrance. We’d call that a strategic location. As one analyst pointed out, this gives Boyd access (definitely) to Internet gambling and (potentially) sports betting, adding “the asset is nicely protected from falling victim to a satellite casino license having a meaningful impact on results down the road.” Boyd spent $280.5 million to pick up Valley Forge, which is the equivalent of adding one more locals property. That brings the tally of Boyd’s Christmas shopping to $855 million, which is a lot of presents under CEO Keith Smith‘s tree. Current Valley Forge ownership is in the process of enlarging the slot inventory by 40%, adding 250 machines. “Slot win per day (600 slots) is running at ~$375 [!], the highest in the market by a wide margin, and ~53% above the average slot win per day” in the Keystone State. It’s also outperforming the Philadelphia market, with 116% of fair share. Boyd has definitely been more nice than naughty this year, as its Yuletide bounty attests.

* What happens to a casino riverboat after it’s retired? In the case of the old Rhythm City ship, it gets stuck in the mud — literally. The riverboat is beached on a sandbar just south of Memphis. New owner William Lozier wanted to make it an event center. However, “the Riverfront Development Corporation there balked at the boat’s massive size (275-feet-long, five stories high), lack of windows and general aesthetic ugliness and denied it a permanent mooring permit.” Thwarted, Lozier ran Rhythm City aground while he works on Plan B. “What his plan for the boat is, I don’t know. It has not run aground. It’s just at very low water,” said the MRDC’s Dorchelle Spence. Since it’s mostly out of the water, it’s not considered a navigation hazard for the time being. That may change if the Mississippi River rises. The Coast Guard is “closely monitoring” the situation. I’ll bet they are.

* Although it’s too early to see the effects of the new tax law, Station Casinos will be the primary beneficiary in the gaming universe, according to Deutsche Bank analyst Carlo Santarelli. “Our model assumes that [Station] pays no cash taxes in 2018, as its capital expenditures create a net loss in the year,” he writes. He notes that locals gross gaming revenue is up 5% so far this year and likely to accelerate along with construction activity. Reinvestment in the Palms and Palace Station is expected to pay dividends, at least figuratively.

* Don’t like stadium-style table games? Get used to them. Foxwoods Resort Casino has just added a 30-station stadium in its Rainmakers casino and will be adding 24 more gaming positions to the Fox Tower next year. Tribal casinos tend to be early adopters of new technology, so if they’re doing it then the private-sector industry won’t be far behind.

* Despite posting the greatest gain (34%) in table revenues, Lady Luck Nemacolin posted the lowest table winnings of any casino in Pennsylvania. By contrast, Presque Isle Downs got taken to the cleaners, off 10%, but grossing $1 million. Sands Bethlehem was tops with $20 million, despite being up only 1%. The revenue leaders were Sands and Parx Casino ($10.5 million), with everyone else far behind.

* Hey, Parisian … Paris-Las Vegas called. It wants its design back (watch video).