It’s only May but we have to give the nod to The Cosmopolitan of Las Vegas. Outgoing owner Blackstone Group graced all employees with $5,000 bonuses, an incredibly generous gesture. Blackstone certainly didn’t have to do it but they did and we are grateful. In addition to rewarding years of faithful service, the payout also provides a “soft landing” for anyone displaced by incoming owner MGM Resorts International (which enjoyed spineless approval by the Nevada Gaming Commission). Does Blackstone know something we don’t? Are big job cuts coming? Given Las Vegas‘ recent history (as in post-2000), we’re betting on ‘yes.’
According to The Associated Press, “joyous bedlam” broke out at the Cosmo when the news filtered to employees of their unexpected payday. Given that the megaresort employs roughly 5,400 staffers, we’re talking about a $27 million largesse, “george” by any measure. As Chief People Officer Daniel Espino put it, “It’s you, every single day, that makes a difference. Whether you clean the rooms, cook the food, are dealing cards, serving drinks, at the front desk.” As for Blackstone, it now takes its $1.6 billion sale price for the Cosmo and plows it into Crown Resorts, which could desperately use some good karma these days.
Bally’s Corp. Chairman Soo Kim entered the lion’s den otherwise known as a Chicago public meeting, to address concerns about Bally’s Tribune, the $1.7 billion megaresort development that is being greeted with eager skepticism by the Windy City electorate. Alluding to Mayor Lori Lightfoot‘s shady selection ‘process,’ Kim jested that “it would be easier for me to be hiding in some dark, smoky room.” Instead, “I’m here in person telling you that we’re going to keep our promises. My primary responsibility is to protect money and make it grow. That’s my job. But I believe that there’s a way to do that, and yet do that the right way, and make a good impact.”
Not everyone was having it. As one denizen of the affected area said, “I was beyond shocked when I learned that Mayor Lightfoot approved the casino proposal in this residential area. Casinos simply do not belong in residential areas, period.” (Tell that to Las Vegas.) Eric Carter, of the Chicago Police Department, tried to allay concerns about potential crime by—rightly—saying, “The more eyes and ears, the more visibility that you have around a facility, it can translate to more safety.” Kim certainly displayed more huevos than Lightfoot, who fled the city after dropping her casino-selection bombshell and attended the meeting only via prerecorded video message. Same to you, lady.
Defying the flattening trends seen elsewhere in the Midwest, Indiana gambling revenue rose 8% last month from 2021 for a total gross of $229 million. The standout performer was Bally’s Evansville, vaulting 21.5% to $16 million. Statewide leader was Hard Rock Northern Indiana with $38 million. Horseshoe Hammond slipped 16.5% to $32 million and Ameristar East Chicago fell 32% to $19 million as serious cannibalization began to take hold. (Can there be any further doubt that Hard Rock is the most potent brand name in gaming?) Blue Chip dipped 5.5% to $12.5 million. Racinos were flat, with Horseshoe Indianapolis taking home $31.5 million and Harrah’s Hoosier Park $23 million. Not bad but one expected more from the rebranding of the former and planned improvements at the latter. French Lick Resort enjoyed a rare ‘up’ month, gaining 3.5% to $7 million. No such luck for Belterra Resort, down 14% to $8.5 million. Rising Star was flat at $4 million, Caesars Southern Indiana was also flat, albeit at $22 million, and Hollywood Lawrenceburg hopped 5% to $15.5 million.
Kansas‘ Lege kicked over a hornet’s nest in the form of a Boyd Gaming lawsuit when it approved sports betting. Before we get to Boyd, the bill is a curious hybrid. It allows online betting—but only at the state’s four casinos and 50 other terrestrial locations that the casinos themselves will designate. Revenues are taxed at 10%—and 80% of that goes into a special fund to lure professional sports teams to the Sunflower State. So much for education and other good causes, which gaming has traditionally supported. Boyd’s sticking point, however, is a sweetheart provision thrown in for the benefit of Kansan Phil Ruffin. It would allow 1,000 slot-like historical racing machines at his Wichita Greyhound Park, a short drive from Boyd’s Kansas Star casino. Boyd argues that gaming-enabling legislation in Kansas forbids new competition in the areas of extant casinos.
As we’ve long held that HHRs look like a duck, waddle like a duck and quack like a duck, we sympathize with Boyd, which said it “has lived up to its obligations, successfully operated the Kansas Star and invested hundreds of millions of dollars in Kansas Star based on the State’s contractual promise.” The company wants a $25 million penalty, as prescribed by law. This inspired a thuggish threat from state Rep. John Barker (R), who noted that Boyd’s contract with the state (whose lottery owns Kansas Star) expires in four years and said darkly, “They’ve got a few things to lose, too.” Nice casino you’ve got there. Hate to see anything bad happen to it, huh?
Meanwhile, for the fourth year year in a row, solons in Missouri failed miserably to pass sports betting. Prime booster state Sen. Denny Hoskins (R) blamed the Show-Me state’s casinos for being the obstacle, tweeting, “We offered 3 different bills on sportsbook. The last offer was on Tuesday and all the pro sports teams (Chiefs, Royals, etc.), pro player orgs (MLBPA, NFLPA), mobile platforms (FanDuel, DraftKings) agreed to the deal. Unfortunately, the casinos said NO & the bill died.” The real problem, however, was Hoskins himself. Or rather, his insistence on legitimizing black-market slot routes. What could the casinos have against that? Oh, just everything. (See Illinois for a cautionary tale.)
“The House had a reasonable opportunity that had all stakeholders signed on to make this happen,” said gaming consultant Brendan Bussmann. “The Senate is where this fell apart, because they wanted to attach VGTs to this issue, and once they realized they couldn’t, there was no true hope to save this.” Even when VGTs were dropped, in a last-ditch compromise, casinos would not agree to Hoskins’ proposed $1.25 million annual renewal fee, five times that of Illinois. A 15% tax rate, at least, was deemed acceptable. Hoskins lowered the ante to $750K/year but that wasn’t good enough. So practically every state around Missouri will prosper while Hoskins cuts off his nose to spite his face.
Jottings: Hard Rock Rockford is being fast-tracked after generating $25 million in six months. A hotel has been added to the planned permanent casino (shown) … $300 million Rivers Casino Portsmouth has been topped off. A 2023 opening is still in the cards, execs say … Add another feather to the cap of Caesars Entertainment. It has become the official sports betting partner of the Chicago White Sox. Expect Caesars signage to show up right field of Comiskey Park (or whatever the hell they’re calling it these days) … Great uncertainty surrounds the future of casino gambling in the Philippines following the election of Ferdinand Marcos Jr. The scion of the infamous Marcos family has promised to bring back online cockfighting, which has seen many of its human participants mysteriously vanish. In other archipelago news, Kazuo Okada was ordered reinstated as CEO of Tiger Resorts. You can’t keep a bad man down … “Satellite” casinos in Macao, mostly operated by SJM Holdings, will be spared a seemingly inevitable death sentence. The Macanese legislature had been expected to eliminate them as part of a larger casino reform … Three more top executives at embattled Star Entertainment have fallen on their swords. Star and Crown Resorts control 95% of Australia‘s casino market, causing some to wonder if they have become too big to regulate.
Quote of the Day: “We don’t have government by the majority. We have government by the majority who participate.”—Thomas Jefferson
