Ocean surges in Atlantic City; Wall Street yawns at MGM sale

Atlantic City gambling revenue was off 3% last month and we’ll be generous, chalking it up to one less weekend day than last year. The Boardwalk grossed $224.5 million, led by Borgata with $57.5 million (a 5% slippage). Table win was down 1.5% on 3.5% less wagering, while slot win decline 6.5% on 12% less coin-in. The Caesars Entertainment trio fell 9.5% led by a 17% plummet at the tables (10% less betting) and a 6% slide at the slots, where coin-in dropped 9%. Eldorado Resorts, however, ought to look at putting its own house—the Tropicana Atlantic City—in order, as gaming revenue plunged 15% to $25.5 million, receding into fourth place. Hard Rock Atlantic City was second with $29.5 million (+14%), followed by Harrah’s Resort ($26.5 million, -2%).

Ocean Casino Resort posted an unbelievably strong performance, just shy of $21 million, surging 38.5% (!). All other casinos were revenue-negative. Bally’s fell 12.55 to $14.5 million, Caesars Atlantic City tumbled 16% to $19 million and Resorts Atlantic City made $14.5 million and change, leaving Bally’s in last place, despite a 7% slippage. The Golden Nugget grossed $16 million, an 11.5% falloff.

Sports betting provided good news, as handle shot to $445.5 million, a 142% increase from last year. Of that, casinos and sports books kept $38 million, up 59%. That surpasses March’s record $32 million. (Need we say that the NFL is
spurring all this largesse?) Nevada is still tops in the U.S., with $571 million in September handle. “Football betting is massive in Nevada, so it won’t be shocking if New Jersey doesn’t overtake the Silver State in September,” said PlayNJ.com analyst Dustin Gouker. “But what September did show us it that football betting is still an overwhelmingly powerful force in New Jersey, and that will help it keep pace.” As for Internet gambling, it generated $41 million in win, also a 59% increase.

* Pennsylvania slots were off 4% last month, grossing $188.5 million. Parx Casino was absolutely flat but led the state with $34 million. Rivers Casino gained 6.5% for a second-place, $24.5 million finish, followed by Wind Creek Bethlehem‘s $23 million (-6%). Valley Forge Resort was the biggest gainer—15%—for $8.5 million, while The Meadows tailspun 19% to $14 million. Mohegan Sun at Pocono Downs was down 5% to $15.5 million, Presque Isle Downs was off 3.5% to $9.5 million and Mount Airy shed 7% to $12 million. In the Philadelphia area, Harrah’s Philadelphia fell 9% to $15 million and SugarHouse tumbled 10% to $13.5 million.

Hollywood Casino at Penn National grossed $16 million, off 4.5%, while Lady Luck Nemacolin was up 9% to $3 million. As for sports betting, “After a summer of growing pains and one month of football, it is safe to say that Pennsylvania is indeed healthy.” So said analyst Jessica Welman. Handle was $194.5 million and revenue $19 million. FanDuel Sportsbook at Valley Forge dominated the mobile market (good move, Boyd Gaming), booking $85 million in wagers. Also-rans were SugarHouse ($31 million handle), newbie Fox Bet at Mount Airy (a distant fifth with $4.5 million), Rivers Casino ($23.5 million) and Parx Casino ($14 million). Rivers and Parx are fighting it out for tops in terrestrial betting, with $7 million each.

* “The big bang that should have been, but wasn’t … at least in terms of share price reaction.” That’s how J.P. Morgan analyst Joseph Greff described Wall Street‘s reaction to this week’s big Strip selloff by MGM Resorts International (soon to be with 100% less “Resorts”). The sale was applauded for giving MGM the $$ with which to pay down debt—although we don’t think it will—and by establishing new asset valuations along the Las Vegas Strip, as well as “also [providing] ample dry powder and positioning for a much-discussed potential Japan investment.”

The Circus Circus sale is no longer attributed to an “associate” or “affiliate” of Phil Ruffin but to Ruffin himself (although it was fun to imagine Donald Trump using Ruffin as a stalking horse to buy it). Ruffin is paying $662.5 million in cash and providing a note for the rest. Greff breaks down the deal as $625 million—a liberal 10X cash flow—for the clown casino and $200 million for the land bank. “This is well in excess of where the current equity valuation was valuing both the property EBITDAR (we estimate 7x) and land (we estimate zero value).” Harsh.