Cosmofusion; MGM Springfield wants new deal

Investors are liking Penn National Gaming. (Maybe it’s all those job cuts.) Its stock has risen 117% over the last three months. Once on the ropes from Coronavirus, Penn is almost completely back in action, with only four of its 41 casinos still closed. Hollywood Casino Bangor is the most recent to reopen. Reports Seeking Alpha, “Penn National has implemented comprehensive social distancing and safety protocols at all of its reopened properties, developed in close consultation with state regulators and local and state public health officials.” Good to hear.

Caught between underwhelming revenues and a four-month Covid-19 closure, MGM Springfield is pleading poverty to the city of Springfield. Bottom line, it wants to renegotiate the host-community agreement it executed several years ago. “I don’t know what customers will show up,” sighed MGM Resorts International general counsel Seth Stratton whilst showing reporters around the reopened casino. Talks between MGM and the city are described as “on hold.” However, MGM’s desire is to cut the amount of revenue it shares with the city or at least defer payment until sometime down the road. Considering that MGM hasn’t been able to live up to its lofty revenue projections ($35 million a month versus an actual $21.5 million), we don’t know how tractable to the city fathers will be to taking even less money from the gaming giant. They definitely won’t be pleased that a 3,000-person workforce has wilted to 700.

Boston College gaming boffin Richard McGowan projects a gloomy future for most Massachusetts casinos, predicting that Plainridge Park will close and that MGM Springfield will either permanently operate on a smaller scale or be sold. “For them to operate at one-third of their capacity—they are facing a really, really difficult situation. No doubt about it,” he told a reporter. “Almost all their revenue is going to be gambling. It’s going to be day hoppers. Period.” MGM is offering little dining and no entertainment, having banked heavily on the latter before the pandemic. It will have to eke out its nut on the 50% of revenue derived from the casino. As for the renegotiations, “It’s an ongoing collaboration,” said Stratton. Given the bleakness of the revenue picture, Springfield may well have to bite the bullet and take less. They’re all in it together.

Derek Stevens is taking out new financing on Circa. He has reconstituted his privately held Drock Gaming as 3 Corners LLC. At the same time, he has pledged both The D and Golden Gate as collateral against his new project. If he defaults, a Credit Suisse branch in the Cayman Islands becomes the new owner. We can see why Stevens is so eager to get Circa open as soon as possible.

Chinese political bigwigs turned out for the funeral of Stanley Ho last Friday, Feckless Hong Kong Chief Executive Carrie Lam was in attendance, as was former Macao CEO Edmund Ho (no relation). Chinese President Xi Jinping and Premier Li Keqiang sent obsequies (old Stan having known well how to suck up to Beijing), which were led by heir apparent Pansy Ho. Given Pansy’s recent coup d’etat at MGM China, the Ho children now control well over half the casinos in Macao, with Pansy running MGM and Socieadade de Jogos de Macau, son Lawrence Ho atop Melco Resorts & Entertainment and Daisy Ho chairing SJM, all of which seems to leave fourth wife and legislator Angela Leong out in the cold. Despite Stanley Ho’s ubiquity in Macanese politics and business he will be laid to rest in his native Hong Kong.