JP Morgan analysts parlayed with MGM Resorts International CEO Bill Hornbuckle and CFO Corey Sanders yesterday. Reports Joseph Greff, “We come away with a favorable view and a strong appreciation for Mr. 
Hornbuckle’s background in casino operations (former MGM COO and long-tenured LV Strip operator), something we think is critical given the current operating environment.” We agree. MGM’s four key priorities—in descending order—are A) more real-estate transactions, B) “increasing exposure in Asia,” C) more sports betting and D) extra “operating efficiencies,” Wall Streetspeak for “cost cuts.” “Looking ahead, MGM will look to refocus on what is core to running the business (i.e., MGM is a gambling business, not an entertainment business),” which sounds like a dramatic shift of direction to us. For the moment, MGM is trying to figure out how to burn through less cash while being quarantined for Covid-19. Taking a skeptical view, Hornbuckle & Co. predict a June reopening, regional properties first, Las Vegas last (partly a reflection of depressed airline traffic).
Generously, the company has extended furlough pay through the end of June (when health benefits expire too). The company figures its workers will “be in fairly good shape” through July, thanks to the CARES Act. Looking to the future, “Corporate America remains mostly checked out 
through the 3Q, though a lot of group business has been rebooked for fall 2020 and calendar 2021,” writes Greff. The company’s $4 billion liquidity is expected to last it over a year, with sales of half of CityCenter and of MGM Springfield also on the table. It will “reevaluate” the annual, $300 million dividend and credits MGM 2020 with having “better prepared the company for the current downturn via labor efficiencies, purchasing, and dynamic pricing ability.” The company’s sufficiently liquid that it can keep up its rent obligations to MGM Growth Properties without resort to deferments or restructuring. It’s still bleeding $1.5 million/day in Macao and doesn’t see recovery before June or July, and then “in highly controlled fashion.” It sounds like MGM has a good handle on a bad situation.
* Foxwoods Resort Casino CEO John James counsels patience during the Coronavirus pandemic, saying, “Lives have been dramatically altered and the recovery back to our once ‘norm’ will be slow. With record unemployment and significant economic impacts, rebuilding our nation will take time.” James’ vision of a new normal includes a continuation of social distancing. For once, we agree with Wall Street that there will be ‘pent-up demand.’ But will there be pent-up money to oblige it?
* Tilman Fertitta is getting desperate. The Golden Nugget owner is offering to pay 15% interest in return for a $250 million loan to his casino/restaurant empire. Actually, 15% is just the starting point for the 
loans, which would mature in 2023. “The spread is the highest ever seen in the US leveraged loan market, excluding companies in bankruptcy,” reports Bloomberg. But beware leveraged loans: They’re what caused Cirque du Soleil to crash and burn.
Between a $50 million cash contribution from Fertitta himself and $300 million in lines of credit, it’s not like the Nuggets are in danger of going out of business imminently. The goal of the loan, according to Casino.org, is to “allow the businesses to resume operations immediately once appropriate.” Fertitta has let it be known that he’s itching to get back into gear. His pitches his survival prospects as “Until the end of the year. I don’t think anyone can survive past the end of the year, can they?” (Actually, we could name several casino companies that can.)
* Dr. Tony Alamo has tendered his resignation as chairman of the Nevada Gaming Commission, to concentrate on his medical practice. Alamo’s tenure at the NGC may be best [sic] remembered by his hesitancy to act in the face of the Covid-19 crisis.
* Bad news for Oyo Las Vegas. The parent company has invoked a force majeure clause and halted revenue distributions to its Oyo-flagged properties. Please, just implode the place already.
* Scientific Games was unanimously chosen to handle the systems contract for the Iowa Lottery (and its 2,400 retail locations) for the next 10 years, with a five-year option. Scientific’s system will go live in the summer of next year.
Tilman Fertitta paid $2.2 billion dollars when he bought the Houston Rockets in September of 2018. Since Houston and the surrounding area has close to 7 million people I thought that price might have been around $200 to $300 million dollars to high. The Rockets payroll for the 2019-2020 NBA season was close to $130 million dollars with two players combined (Russell Westbrook and James Harden) making over $75 million dollars.
There is no one in the world who would ever think that all casinos would close for over a month and that there would be zero college or professional sports at all but look what the f**k happened. Sometime soon (I am still hoping for July 1) baseball or basketball might start up again and there will probably be no fans in the stands. It’s possible that the casinos open in Las Vegas on May 1 according to Vital Vegas and Scott Roeben.
Regardless I feel bad for Tilman Fertitta, Derek Stevens and all the casino operators and the people who work in casinos throughout the world because this really sucks. Then you have also all the restaurants and bars and all the people who work there that are affected by this coronavirus bul**hit. What a fiasco, the Roaring Twenties of the 1920’s have turned into the Snoring Twenties of the 2020’s.