Unlucky Dragon; Gaughan plays Lady Bountiful

Business at the semi-defunct Lucky Dragon casino must have really been sucking wind if it closed six weeks before Chinese New Year, which one would expect to be the property’s sweet spot. Lucky Dragon management is putting a brave face on the collapse, saying it “paves the way for Lucky Dragon to establish new partnerships that will enhance the property.” That would be all well and good if new partners were stepping forward but none seem to be. VitalVegas author Scott Roeben tells me the Dragon was shopped around for a bargain-basement $90 million and found no takers. He explains, “that $90 million asking is based upon what they need to take care of primary lenders and EB-5 (second tier) investors,” adding, “The only nibble brought a bid for six cents on the dollar. Painful!”

This makes Lucky Dragon the biggest casino collapse since the New Aladdin 17 years ago. Even heavily subsidized SLS Las Vegas managed to keep limping along while ownership chipped in to help make payroll. (Still, Meruelo Group cannot arrive soon enough.) Lucky Dragon promises to make ends meet on a gift shop and 200 hotel rooms. I’m with Roeben and others who think the Dragon will go completely dark once it has burned off its Consumer Electronics Show hotel bookings. What’s the good of staying open until Chinese New Year if your guests can’t gamble on-property? If — a big “if” — Lucky Dragon reopens sometime around June, former employees “will have the opportunity to rejoin the team.” In other words, no promises.

* Vici Properties better be serious about paying down debt with the proceeds of its upcoming IPO. The REIT is already $4 billion in the hole, with trophy properties Harrah’s New Orleans and Harrah’s Resort in Atlantic City yet to purchased. Is anybody watching the store to see that Vici isn’t overpaying Caesars Entertainment for these assets?

* In an ominous development, the Mashpee Wampanoags have closed their casino-development office in Massachusetts and laid off staff. The move comes as the Trump administration continues to drag its feet on approval of Project First Light in Taunton. The tribe says not to read anything into the shutdown but it’s difficult to put a positive gloss on it.

* Macao casino concessions start expiring this year, a procession that will continue through 2020. Sociedade de Jogos de Macau and MGM Grand Paradise will be the first to find out if Fernando Chui‘s government approves of their continued operation. No one seems to be losing sleep over this: Casino nationalization appears far less likely than when foreigners entered the Macanese market 15 years ago. Elsewhere in the Pacific Rim, approval of casino megaresorts for Japan is rated no better than a 60-40 proposition in the Diet.

* Russia‘s parliament has scuppered a bill that would have required casinos to collect withholding taxes from players. This was a bad idea when it was floated in the U.S. as a means of collecting child support and remains a bad one, wherever it’s proposed.

* Speaking of taxes, in case you’re wondering where the new tax cuts are going, they’re being used to make the rich richer, at least at South Point. Owner Michael Gaughan has doubled executive bonuses. On the plus side, he’s playing Santa by eliminating a planned increase in healthcare co-pays, so on the whole we have to give Gaughan an “attaboy.”

* Faulty infrastructure will mean a $1 million hit in the wallet to Grand Falls Casino & Golf Resort in Larchwood, Iowa, whose water pipes burst on Dec. 30. A long string of double-digit subzero temperatures is being blamed, as management explains that the casino wasn’t built to take that much punishment. (I used to live in Iowa, which could easily be mistaken for Siberia at times.) In Grand Falls’ defense, it had gone seven years without such an incident but Old Man Winter wasn’t feeling merciful this winter.