Silver State casinos grossed $1 billion last month, with the Las Vegas Strip down 9% from 2019 to $501.5 million but locals-derived win vaulting 23%, leading to a 4% statewide increase on pre-Coronavirus numbers. The silver lining for the Strip was that win was 44% higher than in February, while locals improved 38%. The numbers were undoubtedly helped by a March 15 increase to 50% capacity in casinos, with further improvements likely in May (80%) and June (100%). Strip slot win was “flattish” which is actually impressive considering that coin-in plunged 29%. Slots kept $239 million on tighter holds. Probably the best news for Strip casinos was that baccarat is back, as win grew 32% on 29% more wagering and an exponentially higher hold. Other table games sucked wind, down 33% on 27% less handle.
Downtown casinos grossed $71 million, a 21% gain, while North Las Vegas nudged up 2% to $26 million. The Boulder Strip leapt 37% to $96.5 million, while miscellaneous Clark County hopped 19% to $133.5 million. Laughlin was modestly down, -4%, grossing $48 million, Reno jumped 18% to $59 million and Lake Tahoe rocketed 51.5% to $26 million. As for those Strip results, they can be chalked up to still-anemic visitation. Tourism was down 40% from March 2019. Hotel occupancy was 55.5%, compared to 2019’s 91.5%. Average daily rates fell 27% to a wallet-friendly $104, while revenue per room was $58. Thanks to a dearth of conventions, midweek occupancy stood at 48%. Air traffic still has a long way to go, down 42%, but highways saw as much as 7% more vehicles heading into and out of Nevada. There’s a ways to go but we’ll take numbers like these when we can get them.
Coincident with the Nevada-revenue release, Boyd Gaming issued its 1Q21 numbers ($753 million in revenue) and JP Morgan analyst Joseph Greff was stunned, writing that they “meaningfully exceeded” Wall Street‘s expectations and that quarter ended on a “significantly strong” tone, as unrated play grew and the over-65 demographic finally emerged to play. Greff looks for the “strength to be replicated across our coverage universe, notably regionals/LV Locals heavy-operators [Caesars Entertainment, Station Casinos and Penn National Gaming], who will report 1Q21 in the coming weeks. The big question, for the sector, is the sustainability of this strength, which, to be fair and honest, is unknowable in that the consumer has had limited alternatives with casinos, in some respects, ‘the only outlet in town.'”
So impressed was Greff that he tacked $11 onto his BYD price target, bringing it to $80/share. Covid-driven economies and job cuts will be, Greff says, permanent and no wonder, with Las Vegas locals cash flow at an all-time record. The few downsides were “weak tourism” in Southern Nevada and especially from the crucial Hawaii customer base. Downtown revenues were pallid ($21.5 million) but still better than what the Street expected (more in the $18 million range). So there’s even a glimmer of hope in Glitter Gulch.
Kudos to Encore Boston Harbor. It has opened an on-site Covid-19 vaccination clinic. The converted Picasso Ballroom can handle 300 patients a day. Call 617-665-2100 for an appointment (required). Said Encore President Brian Gullbrants, “We want to help residents of Everett and our surrounding communities receive the vaccine as quickly and conveniently as possible.” In the meantime, Massachusetts casino players appear to be staying home. Plainridge Park reported being at 31% of capacity on the last two Fridays, while Encore hit 19% on those same days and MGM Springfield was at 24% of capacity.
It’s official. The $40 million/acre that Brett Torino spent to acquire two acres of CityCenter is the highest price ever paid for Strip real estate “a sky-high valuation that exceeds land deals on Las Vegas Boulevard even during the frenzied mid-2000s real estate bubble.” Torino, who already owns Harmon Crossing and Hawaiian Market, is tripling down on the area, aiming for upscale clientele this time. By contrast to his ‘george’ purchase price, Torino laid out only $25 million for the two acres that would comprise Harmon Corner, back in early 2010. Such inflation only underscores the fact that there is a finite amount of Las Vegas Strip acreage and it’s a seller’s market. Back in 2006, Torino told a reporter, “Gaming in Las Vegas is fun and exciting. I definitely want to be a part of it.” But he never has, despite an abortive investment in the Riviera (one of Torino’s few bad bets).
If you were one of the few people who watched the Academy Awards, then you’ve already seen Resorts World Las Vegas‘ mega-ad splash, anchored by the formidable legs of Celine Dion. If not …
Jottings: Philadelphia Live is catering to that all-important early rising gambler, offering 100X “self-comp” points starting at 6 a.m. on all Mondays in March. We know Mondays suck but who starts the week by going to a casino at the crack of dawn? … Saying “now is not the right time,” Churchill Downs CEO Bill Carstanjen put on hold a $300 million hotel and slot facility (okay, HHR machines) slated for the titular track. The decision was prompted by less-than-propitious consumer and travel trends. The Kentucky Derby will run on schedule at 25%-30% of capacity … CHDN also got zinged in the settlement of a class-action suit against Big Fish Gaming, litigation that alleged that Big Fish constituted illegal gambling. Choosing not to fight, Churchill Downs and Aristocrat Leisure ponied up $155 million … Although he looks like a Dalek from Doctor Who, security robot Parker uses his superpowers for good. The robot has debuted in Phoenix but, with his ability to accumulate data and process it to building security, he could turn up in Las Vegas soon. He’d look right at home in ultra-sleek CityCenter … As though to prove we’re not over the Covid-19 hump, Great Canadian Halifax Casino was shut down due to an outbreak of the disease. 23 of Great Canadian’s 25 casinos are now out of action. Canada is currently lagging the U.S. significantly in the vaccination race … “Super tourism resort entertainment complex”! No, it’s not Resorts World but $2.8 billion Phu Quoc casino resort in Vietnam. The amenities include a golf course, animal park and 12,000 hotel rooms. It’s the only casino in the country where locals are permitted to gamble …
… If you’re hoping for a makeover of the Tropicana Atlantic City you’re going to have to keep waiting. Caesars Entertainment‘s big capex investment in the Boardwalk is going to start with a $170 million room revamp at Harrah’s Resort and Caesars Atlantic City. “At Caesars, the designs will feature a modern Roman aesthetic, drawing inspiration from the local Atlantic City scenery, including the beach, ocean and famed Boardwalk,” said the company … The Pamunkey Tribe has updated the look of its $500 million Norfolk casino to include “a rooftop bar, infinity pool, luxury spa and rooftop outdoor events space.” A planned hotel tower, however, has vanished. The pullback may be due to the incipient presence of a competing casino in Portsmouth, budgeted at $300 million. Portsmouth will get to market first (2022) with only the initial phase of the Norfolk casino slated for a 2023 opening.
