Were it not for inclement weather, Eldorado Resorts would have exceeded Wall Street’s consensus $172 million cash-flow prediction by $8 million for 1Q19, not
come up $5 million short. For instance, Reno (pictured) had snow in 24 of February’s 28 days and construction in Black Hawk provided another overhang. In Illinois, Eldorado expects to hit its $55 million cost-savings target at Grand Victoria by the end of this month. Wrote JP Morgan analyst Daniel Politzer, “we believe ERI has positioned itself for multiple years of meaningful EBITDA growth.” How? Operating and marketing efficiencies at its legacy properties, and a Pompano Park joint venture with Cordish Gaming, for starters. Oh, and there’s the little matter of “M&A optionality” read: Caesars Entertainment.
Penn National Gaming also reported 1Q19 financials, including a “better than feared” outcome. Wrote analyst Joseph Greff, “it would have exceeded were it not for a one-time and un-forecasted $3.1m expense related to a customer loyalty point liability true-up.” Snow also dampened performance in Chicagoland, as well as in Council Bluffs and close to home in Pennsylvania. “We continue to like 
PENN, given (1) its increasingly diversified regional portfolio, which has benefits that didn’t exist in years past when it had a smaller footprint, (2) further potential upside to Pinnacle acquisition synergies, (3) the yet-to-close, un-modeled, and FCF accretive Greektown OpCo acquisition, (4) meaningful improvements to PENN’s balance sheet, and (5) an overall favorable, low-single-digit growth top line regional gaming landscape that possesses a mostly rational promotional environment, allowing continued margin improvement,” continued Greff.
If Eldorado was suffering in Black Hawk, Penn posted record amounts of revenue and cash flow. Bracing for the impact of Encore Boston Harbor on Plainridge Park, Penn guided expectations slightly lower for 2Q19, when Encore 
will hit the market. Company execs bemoaned a decline in “lower-worth” customers despite conscious decision to focus on more-profitable ones. Growth in VIP table-game play was the best ever and the addition of sports books in Mississippi, West Virginia and Pennsylvania was a boost. “More broadly, PENN feels good about the backdrop for the regional gaming consumer, citing, wage growth, employment, home values, and consumer confidence,” wrote Greff. The company plans to flow in the Pinnacle Entertainment customer database this summer and have its two satellite casino projects in the Keystone State on line by May 2020 0r November of that year.
As for Greektown, Penn got it for a below-market-average 6.7X cash flow, which it will get down to 6.3X after “synergies” (job cuts, sweated comps). Concluded Greff, “We view Greektown as a strategic acquisition for PENN, providing exposure to a stable market it is not in right now (Detroit) with relatively stable operating fundamentals and no supply growth risks.” We concur.
* Sheldon Adelson‘s Las Vegas Review-Journal reports that Caesars will be paying for wage increases from the latest round of labor negotiations by cutting 
the number of comps awarded customers. Total Rewards thus becomes Total Gyp. There is no length to which Big Gaming will not go to shaft its customers—and poison their attitude toward casino workers, who are only getting their due. Expect a new generation of “stiffs” in the casino customer pool, by way of illogical retaliation. Caesars estimates that the cuts will save $80 million in Year One. Caesars Entertainment: Where the customer almost matters.
* A minor conflagration marred yesterday at Fiesta Hotel & Casino in North Las Vegas. No serious damage was done, except perhaps to the hotel’s public image: KTNV-TV tweeted an extremely tatty-looking photo of a hotel corridor.
* George Lopez‘s beloved grandmother never wrote down her recipes how is his new casino restaurant going to guarantee authenticity? Chingon Kitchen at Bee Quiva Hotel & Casino opens today.
* Maltese online-gambling purveyor Gaming Innovation Group was a little too innovative for New Jersey regulators. It allowed a licensee (probably Hard Rock Atlantic City) to take an out-of-state wager. For that mishap it will have to pay $25,000 to the Garden State.
* Macao casinos banked a still-robust $2.9 billion last month but were 8% down from the same period last year. On the upside, punters were expected to flock to Cotai for Labour Day holidays, with MGM Cotai expecting demand to be “very strong” (and they could use it).
* The addition of sports betting has been a needed boost for Mississippi casino revenues. March Madness, in particular, provided a shot in the arm. Gambling houses reported their second-highest profits ever. The house win of $212 million included $8.5 million in sports wagers. Gulf Coast casinos were up an impressive 13% while riverboat ones fell 4%, grossing $88 million.
