Macao moots casino closures; Stevens vs. William Hill

Why? “Macao will be extra-cautious in managing the risks of a resurgence in Covid-19 cases that might occur were there a sudden surge of mainland visitors.” Besides, gambling revenues were already on a downturn even before Coronavirus, so Macao will be swimming upstream in more ways than one. Casino owners will also probably have to dig deep and subsidize junket operators who are facing liquidity issues right now. “More importantly, I see the casino operators competing more aggressively in granting credit to their premium-mass players. Granting credit to premium-mass players can help increase your top line and preserve your margin because when they play with your money, you don’t have to give them as many comps.” Fewer comps? That’s music to a casino’s ear. But, says Lee, “The problem is that say, two years down the track, a significant percentage of that will probably become receivables, and eventually bad debt. We have seen that in the Macao market previously.” So, hasten slowly.

Although William Hill seems to be gobbling up every sports book in Nevada, ever-vigilant Derek Stevens is pushing back. He’s added the independent Tuscany Suites & Casino to his Circa Sports flotilla. The rebranded venue will debut next March. There’s no word yet on what sort of bells and whistles the revamped book will have but, given Stevens’ track record, something impressive seems in order. As for William Hill, it may ease Caesars Entertainment‘s debt burden by assuming the Internet casinos of the Roman Empire. The hope is that the bulked-up joint entity could generate $700 million in annual revenue and throw up a challenge to DraftKings. William Hill already has a 20% stake in Caesars sports books and the relevant execs are talking like it’s a done deal. Hill CEO Joe Asher says “We’ve been riding on their coattails as they’ve been growing. Clearly, we bet on the right horse.” Adds Caesars CEO Tom Reeg, selling the online division to Hill would be “gathering all our mobile assets, both sports and online. That would be ideal.” Even so, with a market capitalization of $7 billion, Hill/CZR would be dwarfed by DraftKings’ $13.5 billion. Some contrarians are putting their money on a Caesars takeover of William Hill, but how much more debt can the Roman Empire sustain?

Jottings: Japan is probably pushing its casino-selection process back at least six months, maybe a year. Zzzzzzzzz … The Motley Fool cut through the bullshit about MGM Resorts International‘s recent pogrom of 18,000 jobs. It called the unfortunate workers “fired,” none of this “layoff” crap, which implies you’re going to get your job back … Bet MGM has gone live in West Virginia. It is the only gaming app in the state to offer slots, roulette, blackjack and progressive jackpot-linked games … The Great Shutdown cost Oklahoma $25 million in tribal-casino exclusivity fees. Instead of making Gov. Kevin Stitt (R) more conciliatory, he is probably going to push for still-more-usurious fee increases … Undeterred by recent hardships, the Gila River Indian Community is incepting a $143 million expansion that will include a new hotel tower at its Arizona casino. Also on the agenda, “an oasis-style pool and cabanas, two hot tubs, an adults-only pool, casino renovations, and an additional 22,000 square feet in indoor and outdoor meeting space.”