Ohio prospers, others don’t; Labor trouble at Eldorado

Maryland continues to show signs of casino saturation. Revenue ($143 million) was down 4% last month. Not even MGM National Harbor ($57 million) was immune, off 4%. Slots were up 10% but table games got walloped, down 19%. Still, MGM commands 40% of market share in the Free State, followed by Maryland Live with 34%. The latter slipped but 2%, to $49 million. Horseshoe Baltimore got lapped, fading 18% to $19 million. Ocean Downs‘ luck finally ran out, as a string of revenue-positive months gave way to a 5% stumble and $7 million. Hollywood Perryville was off 4% to $6.5 million. Over in West Virginia, revenue was down 2% despite 5% higher winnings at the tables. Hollywood Casino at Charles Town Races didn’t have good luck at the tables, down 9%, leading to a 5% overall decline.

No worries about contraction in Ohio, where casino revenues were up 4% last month, to $161.5 million. MGM Northfield Park led the way with $21 million but that was a 7% drop from last year and other casinos are closing the gap. Hollywood Columbus gained 2.5% to $19.5 million, while Jack Cleveland leapt 7% to $17.5 million. Hollywood Toledo was flat at $17 million and Jack Cincinnati vaulted 10% to $16.5 million. As for the racinos (Northfield Park excepted), Hollywood Dayton galloped 12.5% ahead to $10 million, Hollywood Mahoning Valley cantered 9% up to $11 million, while Scioto Downs gained 3% to $15.5 million. Jack Thistledown was more than respectable, up 6.5% to $12 million, while Belterra Park continues to steadily improve, growing 5% to $7.5 million. MGM’s was the only revenue-negative gambling house in June.

Next door in Indiana, gaming revenues dipped 3% to $176 million. One less weekend day hurt, but probably not as much as a strong 2018 comparison did.  The northern-tier properties held relatively steady, which was good in light of some dire numbers from the south. Horseshoe Hammond was flat at $32.5 million, Ameristar East Chicago yielded 5% for $18 million, Majestic Star I slipped 6% to $7 million but Majestic Star II gained 1% to $5 million, while Blue Chip has turned back the Four Winds challenge, up 2% to $13 million.

Indiana Downs gained 3.5% to $21 million but the other racino, Hoosier Park, faded 2% to $15.5 million. Horseshoe Southern Indiana threw a shoe, off 13% to $17.5 million. Also having a very difficult month was Rising Sun, tumbling 13.5% to $4 million. Hollywood Casino Lawrenceburg shed 5% to $13.5 million, French Lick Resort was down 4.5% to $8 million, while Tropicana Evansville was relatively unscathed, off 1% to $12 million. Belterra took a 10% hit, collecting $9 million.

Missouri receipts were down 3% to $143 million. Penn National Gaming robbed Peter to pay Paul. Hollywood Casino St. Louis gained 6% ($24 million) but River City yielded 13.5% ($17 million). Eldorado Resorts also had a hard time at Lumiere Place, down 9% to $13.5 million, leaving Boyd Gaming to take a victory lap at Ameristar St. Charles, up 7% to $24 million. In the Kansas City market, Boyd was again the winner, banking $16 million on a 1.5% decline. Harrah’s North Kansas City held its ground at $14.5 million while Argosy Riverside slipped 4% to $13 million and Isle of Capri Kansas City skidded 6% to $5.5 million. Outstate, the most dramatic numbers were a 22% plunge at St. Jo Frontier ($3 million) and a 15.5% one at Isle of Capri Cape Girardeau ($4.5 million). We hate to speculate about spring flooding but it’s usually the culprit when numbers swing so dramatically.

* In the event that the Eldorado Resorts/Caesars Entertainment takeover goes through, which seems a dead certainty, Eldorado will become the biggest casino company in the U.S. by a sizable margin, employing 81,00 people across 81 casino-hotels. Pretty impressive for a company that wasn’t publicly traded until 2014 and doesn’t predate the 1970s either, having started humbly with a 282-room casino-hotel with 12 table games 46 years ago. Caesars initially gave Eldorado the cold shoulder, before Carl Icahn played a rather forceful Cupid to the corporate couple. Already, Eldorado had engorged Tropicana Entertainment and Isle of Capri Casinos but the Caesars acquisition will make those meals look like small potatoes. “During the last five years, many opportunities have presented themselves, and we have then determined whether they are the right fit for Eldorado Resorts,” understated Chairman Gary Carano.

CEO Tom Reeg‘s promise of $500 million in cost cuts in the first year alone has riled Unite-Here President D. Taylor, who asked, “Where are they going to cut? We will not stand by idly if the proposed Caesars-Eldorado transaction will lead to significant job losses, worse wages and benefits for our members, and lower state gaming tax receipts in the many communities where members we represent work and live.” For its part, Eldorado is promising “very little turnover.” Eldorado COO Anthony Carano threw some shade on Caesars, suggesting that the luster had gone off its laurels: “For a long, long time, Caesars was the gold standard. It has come down a little these past couple of years, but we’re going to bring that standard back.”

As for anticipated asset sales, the Caranos and Reeg are still playing it cool, despite the ardor of suitors Tilman Fertitta and Phil Ruffin. If Eldorado tries to unload The Rio, it may have trouble shopping it about: Ruffin says he’s not interested, only wanting something on the Las Vegas Strip.

While it struts and preens on the world stage, Eldorado faces some trouble on its Florida front. Employees at Isle Casino Pompano Park have voted to authorize a strike. This follows 14 months of fruitless negotiations between Unite-Here and Eldorado. Resentment lingers from Eldorado’s sacking of 80 Pompano employees in 2017, 20% of the racino’s workforce. Says housekeeper Myrtho Bien-Aime, “I make $9.20 per hour. They made over $100 million in 2018, and our department lost so many workers in the layoff. We work harder for less pay, and they are making so much money. It’s just not fair.” The labor strife could throw a wrench into the works of a Cordish Co./Eldorado joint venture to develop 200 acres of land around Pompano Park. Our advice to Eldorado is to back up your talk and run the racino like the first-class facility it’s supposed to be.

* Speaking of labor talks, Democratic presidential candidate Julian Castro has injected himself into the Station Casinos/Culinary Union impasse, offering to mediate. He has the backing of the local chapter of Clergy & Laity United for Economic Justice. Said Castro, “I want to encourage Station Casinos, at your six properties, to negotiate in good faith with your workers who have already voted to unionize, to ensure that they have a good, strong contract. The most valuable resource of any company are its employees, and I hope you will treat them right.” Indeed.