Paging Steve Wynn; Genting mismanages risk

Somebody alert Steve Wynn. The mega-Walgreens at the northwest corner of Las Vegas Boulevard and Sahara Avenue is on the market as a “Once in a Generation High Profile Asset.” OK, the footprint is relatively small but the seller is highlighting the proximity to the Sahara, The Drew (still in abeyance), MGM Resorts International‘s fairgrounds and, yes, Wynncore. That and 118,000 cars’ worth of vehicle traffic every day. Oh, there’s the small matter of a 20-year lease to Walgreens (plus 50 years worth of options) but we’re sure Wynn or some other clever mogul can find a way to co-opt that. If anything, the biggest drawback would be that the property sits just inside the City of Las Vegas and would be subject to a higher tax base. (Wynn’s bete noire.) There’s even a Trump angle, as the site was once mooted for the vaporware Ivana condos. Since the store is America‘s second-largest Walgreens, it is probably throwing off too much cash flow to tear down and replace. But Wynn is rather good at pulling rabbits from hats. We’d be curious to see what he’d do with the space.

* Consumer Reports polled its readers on what hidden fees they hate the most and cable TV levies outdrew event-ticket and resort fees by a four-to-one margin. Which, barring regulatory action, presumably means the status quo is safe, darn it.

* AGS, the game manufacturer currently on the cover of Global Gaming Business, made a different kind of headline today. Credit Suisse analyst Ben Combes called its second quarter “Not so OK in Oklahoma.” Cash flow was 10% below Wall Street consensus “driven by higher costs and weakness in Oklahoma.” AGS’ installed base and shipments were both down. “Domestic installed base should return to growth in the second half,” Combes assured his readers, while cautioning them that nothing should be expected from AGS’ interactive segment this year. He lowered his price target to $27-ish, down from $35. That hurts.

* Casino revenues were up in Ohio last month, rising 2% to $162 million. MGM Northfield ($21 million) hung onto the top spot in the state despite a 6% decline. Hollywood Columbus was easily the strongest of the urban casinos, with $19 million (-2%), while Hollywood Toledo ($17 million) also slipped 2%. Jack Cleveland gained 7% to achieve $17 million while Jack Cincinnati scored $17.5 million (+2%). Scioto Downs ($16 million) was up 3% and Thistledown Racino gained a dramatic 15% to reach $12 million. Churchill Downs‘ joint-venture Miami Valley Gaming was up 5.5% to $15 million. Boyd Gaming struggled at Belterra Park, down 4.5% to $7 million, while Penn National Gaming‘s two racinos continue to go gangbusters. Hollywood Dayton vaulted 14% to $10 million while Hollywood Mahoning Valley climbed 5.5% to $11 million.

* Illinois casinos were down 3% in July, pulling in $116 million, a second straight year of declines. Even statewide leader Rivers Casino Des Plaines was affected, down 5% to $37 million. Eldorado Resorts is having trouble figuring out Grand Victoria, slipping 7.5% to $13 million. As for Penn, Empress Joliet rose 2.5% to $10.5 million while Hollywood Aurora was off 1.5% to $9.5 million. Harrah’s Joliet slipped 5% to $14.5 million. Par-A-Dice held its ground at $6.5 million while Argosy Belle tumbled 11.5% to $4 million. Harrah’s Metropolis was up 3.5% to $7 million, Casino Queen gained 2.5% to $8 million and Jumer’s Casino Rock Island was up 3.5% to $6 million.

* Resorts World Sentosa hasn’t done a good job of managing debt risk. The megaresort reported bad debt increases that ate into its $122 million 2Q19 profits. Casino revenue was up 13.5%. but defaulted markers ran to $34 million and change. “Bad debt expense as a percentage of accounts receivable is … a staggering 31 percent,” wrote dismayed Sanford Bernstein analysts. We hope that this does not bode ill for Genting’s stewardship of Resorts World Las Vegas when it eventually opens.