Deutsche Bank analyst Carlo Santarelli met with a number of casino companies recently and came away with a sanguine prospect for the Las Vegas Strip. As for the operators, “Overall, we felt commentary pertaining to the LV locals market, regional 
gaming markets, and the M&A environment, was bullish, while LV Strip and Macau color was a bit more mixed.” Corporate and convention bookings on the Strip are flat, with no Con-Agg Expo to juice business this year. Individual travel, though, manifests “weakness … We believe bookings for the [New Year’s Eve] period were down y/y and rates followed suit. That said, we believe the period firmed up meaningfully from what was a very soft booking position in the mid November period.”
However, “domestic patron gaming trends continue to exhibit healthy growth … High end play from Asia has been improving, albeit modestly, while gaming spend from Europe and South America remains sluggish.” As for bread-and-butter players, they’re the beneficiaries of higher promotional spending, post-October 1. At least one big (unspecified) boxing match and a U2 concert are expected to help business in the latter half of 2018. The Culinary Union contract comes up for renegotiation in the second quarter of the year but “Given the health of the industry, it is believed the negotiations will be relatively easy.” Indeed, with all that tax-cut largesse already being spent, casino companies can scarcely plead poverty this year.
In Macao, operators were cautiously optimistic “largely given the acceleration in mass trends, led by the premium segment.” As the MGM Grand Cotai opening draws near, an 
allocation of 150 table games is expected. MGM will market to VIP players directly at first, gradually phasing in junkets. Back in the U.S., regionally “the competitive environment in regional markets should remain benign, with potential problem spots largely limited to Atlantic City (2 likely 2018 openings), Philadelphia (timing TBD), and the potential impact on Southern Indiana stemming from the Kentucky track expansions.”
And off the Strip in Las Vegas, one executive said, “it’s hard to find anything negative in the locals market.” That’s partly because construction activity is going from being theoretical to actual. Or, as Santarelli put it, “we believe management teams’ commentary around the construction labor impact on locals GGR has shifted from discussing the hypothetical benefits of an improving construction backdrop to acknowledging that such benefits are just beginning to roll in. We see this is a multi-year positive and expect construction labor to grow double digits year over year in 2018.” It’s too late to save Lucky Dragon but that’s gambling for you.
* Missouri gaming revenues rose 4.5% last month, for a total gross of $148 million. Soon-to-be-Boyd Gaming‘s Ameristar St. Charles ($22.5 million) and Ameristar Kansas City 
($16.5 million) were 2% and flat, respectively. In the St. Louis market, Hollywood St. Louis grossed $20 million (+4%), Pinnacle Entertainment‘s River City was up 2.5% ($19 million) and Tropicana Entertainment‘s Lumiere Place ($13 million) was up an impressive 9%. Across the state in Kansas City, fast-growing Penn National Gaming grossed $14.5 million at Argosy Riverside, a whopping 15% gain, while Harrah’s North Kansas City was up 7% up for $15 million. Isle of Capri Kansas City slipped 3.5% to $6 million. Outstate, the Isle-branded casinos tended to do better, led by Boonsville, up 7% to $6.5 million. Affinity Gaming did not perform so well at Mark Twain Casino, down 5% to $3 million. We’d say Affinity makes a logical takeover target for 2018 save that who wants to own a raggle-taggle bunch of locals casinos?
* Looking for a career in the travel industry that comes with a security clearance? Try the job posting for flight attendants headed in an out of Area 51. You’ll be sworn to secrecy about what you see on the job, which may mean that you’ll meet space aliens but if you told us you’d have to kill us.
