… and both of them are Las Vegas. Last week, Sheldon Adelson pitched a fit about how he thought MGM Resorts International and Caesars Entertainment were driving down his room rates (as though it were 
the job of Jim Murren or Gary Loveman to protect Adelson’s ADRs). He also included Steve Wynn in his “woe is us” monologue — quite erroneously, it turns out. Wynn Resorts released its 2Q13 figures yesterday and they reflected “strong LV Strip … performance,” propelled by high-end customers, according to J.P. Morgan‘s Joseph Greff. While Macao numbers “were below our fairly low expectations,” Wynncore more than made up for it, including $12 million in bad-credit redemption. Strip metrics met or exceeded Greff’s expectations, with net revenues up 16% and revenue per room up 9%, despite lower occupancy. The house was lucky at the slots, increasing win 10% despite flat coin-in.
About the closest thing to a cloud on the horizon is the cost of Wynn Cotai, which is creeping up toward $4 billion. No wonder, what with a Bellagio-style lake and an aerial tram, whose cars will be modeled upon smoke-breathing dragons. Topiaries galore will also stud the property. Never underestimate Steve Wynn’s capability to surprise.
Down the street, at Caesars Entertainment, things were not looking so hot. Friendly media outlets were 
quick to spin it as They Didn’t Lose As Much Money This Year. Even Deutche Bank‘s Carlo Santarelli, one of Caesars’ few enthusiasts on Wall Street, could only muster muted enthusiasm for the numbers if that. Visibility into Caesars data will be cloudier going forward, as Loveman will be slopping llinois, Indiana, Iowa, Louisiana, Mississippi and Missouri under the category “Other U.S.” (Got something to hide, Gary?) Net revenue and cash flow undershot Santarelli’s expectations in nearly every category. Gaming revenues were off $117 million (or $63 million in Vegas, -15.5%), prompting Loveman to blow the following smoke up The Street’s ass: “Food and beverage revenues were up very meaningfully [i.e., 9%] in a year when gaming revenues were weak, and we do think that trend is with us for a long time to come. We have visitors that are coming to Las Vegas principally for nongaming activities, though they may gamble a little while they’re here.”
Gamble “a little”? Well, I guess Caesars can save money by closing down a few casinos, what? Caesars lost ‘only’ $212 million on the quarter. Thanks to the resort fees which Loveman once loudly eschewed, room revenues were up 6%, with occupancy down a wee bit, to 95%. Wrote Santarelli, “revenues were impacted by softer gaming volumes year over year, a weaker hold percentage year over year, and closure of certain properties due to renovations.” (Emphasis added.) As I’ve asked before, with Caesars at the edge of a chasm, was this the time to rip apart two casinos when the company needs every one-armed bandit it can muster?
Even as his company goes to Hades in a handbasket, Loveman sees no shame in flaunting his wealth. (His shockingly gaunt appearance may give investors a fright, though.) “Fail to the Chief” would be a more apt title but Haute Living plays along, applauding Loveman’s aversion to actually living in Las Vegas — despite his company’s preponderance of properties along the Strip — and never, ever being so indiscreet as to mention the the $20 billion-plus in long-term debt that is the anchor around Caesars’ neck.
Better Mousetrap Dept.: OK, once you’ve gotten the Asian VIP player into your Macao casino, how do you get them to play at your casino on the (much lower-taxed) Las Vegas Strip instead? More high-roller suites and better retail are the surprisingly simple answers. according to Business Week. And don’t forget: Nevada casinos are allowed to extend credit, something they’ve been constrained from doing in Macao. Collecting from a bad debtor who’s absconded to China … well, that’s still an impossible mission.
