When a casino is named Barley’s Brewing Co. you’d expect to get a decent glass of suds there. Not so. Las Vegan Lon Enwright is $8 million richer—but physically damaged beyond price—after being served cleaning fluids instead of beer (the taps were in the process of being flushed and the facts are not in dispute; there is even a hint of employee malice). The former Strip wine steward has lost his sense of taste, suffers from stomach and esophageal ulcers, and is at increased of risk of cancer as a result. Literally adding insult to injury, Barley’s owner Station Casinos offered Enwright a piddling $300,000 settlement. A Las Vegas jury thought differently and awarded the plaintiff $8 million in damages. Station hasn’t said what it will do but if it’s got any decency it will pay up. However, given its “contumacious” character, we’re not hopeful but appeal to the better angels of CEO Frank Fertitta III‘s nature.
Star Entertainment is feeling the heat Down Under. CEO Matt Bekier has resigned as the government continues to investigate alleged breaches of anti-money-laundering and anti-terrorism laws. Australia has had somewhat of an anything-goes approach to the casino biz, so Bekier falling on his sword represents an inevitable reaction to this over-lenience. Last week, Crown Resorts was deemed “unfit” to operate Crown Perth (shown) but allowed to run it for the next two years under state oversight. As always, Aussie regulators know how to send a mixed message to offending casinos.
Like the proverbial outcast left alone in a room with a loaded pistol, Bekier knew what to do, saying he’s “accountable for the effectiveness and adequacy of the company’s processes, policies, people and culture,” and that he is taking responsibility for the whole mess. We’ll see whether or not this gets Star off the hook. (We’re betting not.) Jefferies analysts forecast worse to come: “If Crown Resorts is a guide, we have a long way to go which could involve further management/board change and the now, very real possibility of Star losing its licence to operate, which could conceivably dash plans for an additional 1,000 Electronic Gaming Machines in Sydney.”
In a foretaste of what is en route, a former compliance manager at Star testified that company executive laundered Chinese gambling spend as hotel expenditures. (Uh-huh.) China‘s Union Pay money-transfer system, you see, forbids its use as a source of gambling funds. So you swipe the high-roller’s Union Pay card and record it as room service fees or what have you. According to the witness, knowledge of this scheme went to Star’s top ranks. And if you had an ethical problem with this? “Get it done” was the answer. As a consequence, Star finds itself at risk of losing its Sydney license. Lie down with dogs, get up with fleas.
Why can’t Massachusetts get sports-betting legalization done? It’s not a problem in the lower house or with Gov. Charlie Baker (R), but the state Senate is a puzzlement. A sports betting bill that passed out of the House has been stalled in the upper chamber since July. State House News Service went to the trouble of surveying all state senators on their views on the issue. 60% were in favor but nobody could explained why the chamber won’t budge, with some offering vague excuses like “I’m okay with sports betting in theory, but there are many unresolved questions about … how to set it up, how to regulate it, and how to share the revenue it generates.” Apparently the way to resolve those questions is to do—nothing, as only a politician can. The House bill is hardly vague. It provides for mobile wagering, three casino skins and two OTB ones, and a 12.5% tax, all of which is eminently reasonable. There’s no excuse for this senatorial dithering and the home state of DraftKings can surely do better.
As long as we’re on the subject of sports betting, Deutsche Bank analyst Carlo Santarelli sure wishes people like us would stop reporting handle, arguing that it’s a meaningless metric. (We dissent, thinking it offers a useful context for revenue, but Santarelli knows more than we do.) Handle and GGR, Santarelli writes, “are essentially bogus and easily manipulated metrics, [which] will simply elongate the process to a steady state, as operators attempt to continue to show gross revenue and handle growth, to satiate investor expectations.” While still somewhat skeptical of online sports betting, Santarelli puts his money, as it were, on Internet casinos, which will “be a reasonable, though likely disappointing, cash-flowing business for some.”
As for the other stuff, “we can further dispel the notion that gross revenue, not to mention handle, is a relevant metric for anything beyond simply being a means of modest directional comparison amongst operators.” He also faulted OSB operators and Wall Street (and the media) alike for using New Jersey, the capital of i-gaming, as the model for the remainder of the U.S., pointing out that “As things stand, the equity market believes each adult in New Jersey spent ~$320 in 2021 betting sports on their mobile phones and playing casino games on their mobile phones. We believe the actual spend is closer to $125.” He concluded, “Said differently, we believe extrapolating New Jersey gross revenue and then simply extracting what currently amounts to a very large slug of promotions that are producing phantom GGR, with no impact to gross revenue, is an impossible dynamic to achieve.” Can we leave the woodshed now?
Remember the National Board of Review jinx? Well, it came for Paul Thomas Anderson on Oscar night. The odds-on favorite had his all-but-certain Best Original Screenplay trophy snatched away by +110 underdog Kenneth Branagh for Belfast. Otherwise, the bookies called it right straight down the line. For the Academy, the new N-word continues to be Netflix, whose The Power of the Dog went 1-for-12.
Jottings: Late April is Resorts World Las Vegas‘ target time for opening its Elon Musk link to the Las Vegas Convention Center. Casino President Scott Sibella is aiming to cash in on the ever-lucrative National Association of Broadcasters convention, April 23-7. Eight Tesla cars will service Resorts World … Circa is revamping some overflow space into a 35,000-square-foot banquest and convention area. “Based upon the size of our property, we think this matches up pretty well” with demand, said owner Derek Stevens, who broke the news on a Global Gaming Business podcast well before it was formally announced. The ballrooms will be named, in a classy move, after vanished Las Vegas motels (Galaxy, La Concha, etc.) and constructions starts today … M Resort will be the home to indoor football after Penn National Gaming inked a deal with the Las Vegas Knight Hawks … Downtown Henderson will soon have a new, six-story, $90 million, Atwell Suites hotel. That’s how owner Joe DeSimone plans to augment The Pass casino and he has a reliable history of making good on his promises … Potawatomi Hotel & Casino has become the official casino of the Milwaukee Brewers. Perks for Potowatomi include a branded entrance to the Brewers’ home field. “Being both neighbours in the Menomonee River Valley and partners for over the past two decades, our mutual commitment has been a win-win. We look forward to the increased dedication and collaboration,” said team President of Business Operations Rick Schlesinger …
Yumeshina Island, the preferred casino site of MGM Resorts International in Osaka, is sinking—literally. Even so, MGM is sticking by its increasingly soggy bid … In both Kentucky and Missouri, sports-betting bills have cleared the House of Representatives (hugely so in Missouri). But their fate is far from certain in the state Senates … Alex Rodriguez is cofounding a trading firm that “will allow fans to invest in individual players’ careers and buy and sell their holdings at prices based on players’ performance.” So what happens to your investment if your player of choice is suspended for using PED? Of all people, A-Rod would know. (A British precusor was stripped of its gaming license for irregularities.) … Unlike Big Gaming, the American Hotel & Lodging Association has been “george” to the suffering people of Ukraine, donating $2 million. Half of that came from Marriott International alone … Finally, Singapore is back. Tourism was reported to be up 273% year/year in January and 144% last month. Even so, all-important visitors from China remain walled-off.
Quote of the Day: “Every time a nation which has known freedom loses it, other free nations lose something, too.”—Madeleine Albright (1937-2022)
