Isle’s comeback continues; What’s in a Mystic?

Congratulations to Isle of Capri Casinos, winner of Missouri‘s 13th and final casino license. This morning, the Missouri Gaming Commission voted in favor of Isle’s $125 million Cape Girardeau project. Although all rival projects were budgeted higher, favorite-son Isle’s standing as a “good corporate citizen” and the robust support of local voters put it over the top. Not even the last-minute enlistment of Carl Icahn‘s Tropicana Entertainment was enough to rescue an effort to put a new casino at St. Louis‘ Chain of Rocks Bridge, a project riskily premised on sucking vast amounts of revenue out of Penn National Gaming‘s Alton Belle riverboat. Ironically, a previous incarnation of Tropicana Entertainment, then owned by Columbia Sussex, had been run out of Missouri. It was never able to own or operate the former Casino Aztar, now owned by … Isle of Capri.

The MGC’s decision is a win-win-win for Isle, Ameristar Casinos and Pinnacle Entertainment, as casino analyst Carlo Santarelli points out in an investor note. He projects annual cash flow of $27 million once the casino opens, which would constitute a splendid 22% ROI. By opting for Cape Girardeau, the commission achieves the greatest possible diffusion of competition, given the alternatives before it. The only obvious downside is that regulators passed an opportunity to bring a new company into the state. However, sitting on the license and hoping that Wynn Resorts wants to build a Show-Me State casino clearly isn’t a realistic option, especially with St. Louis-based Isle sitting on one’s doorstep. Isle got in trouble but cannibalizing its revenues through excessive Midwest expansion. In a year or so we’ll see if its newest project grows revenue or just rearranges existing dollars.

(Big thanks to the two S&G readers who forwarded links on this breaking story.)

In a Nov. 30 e-mail blast (in both senses of the term), the “Diary of a Mad Hedge Fund Trader” blog weighed the pros and cons of a Thanksgiving stay at CityCenter. In light of $120/night rates for luxury rooms, he deemed a weekend on the Strip cheaper than staying home. (Maybe for him; the rest of us … not so much.) MHTF’s sources told him 80% occupancy rates at CityCenter were achieved by withdrawing a fifth of the metaresort’s rooms from circulation. You might want to take such information cum grano salis, since he also reports that CityCenter contains two casinos, which was never part of the plan.

Like many other visitors, he finds much of Crystals “elegantly boarded up” and its high-end retailers “bereft of a single customer,” while service at Aria was “glacially slow.” Blaming this on the Culinary Union, though, strains credulity when you consider that every other Strip resort except Venelazzo is union-manned, so why should Aria be dramatically worse in that respect? One quibbles with the details of MHFT’s chronicle but his concluding verdict is difficult to dispute: “Excess is in abundant over supply here, and [MGM Resorts International and Dubai World] clearly thought the good times would go on forever.”

As did many others. (Thanks to reader Greg Askins for forwarding the blast.)

As gaming lawsuits go, this one may take the cake for preposterousness. Speaking as a former resident of Minnesota, I’ve never been in danger of confusing its Mystic Lake megaresort with the puny Mystic Lodge Casino in Henderson. Hell, you’d be a little hard-pressed to even find the latter and I pity the fool who tries to book a stay there (it doesn’t have hotel rooms) when imagining he’s going to Mystic Lake instead. The Shakopee Mdewakanton Sioux Community must he strapped for cash if it’s rattling its legal saber at a pissant slot house — so small that LVA doesn’t even list it — in the Vegas ‘burbs.