Maryland closed out 2021 hot, up 16% from 2019 with a gross of $173 million in December. As usual, MGM National Harbor was in the lead with $74.5 million. Maryland Live booked $62.5 million for a 20.5% gain and 36% market share. Hollywood Perryville‘s $7 million represented an 18.5% vault and Ocean Downs‘ $7 million was good for a 19% leap. Rocky Gap Resort grossed $5 million, up 18%. The only loser was—you guessed it—Horseshoe Baltimore—down 9% to $17 million.
MGM employees can expect to see a familiar face in the C-suite. Borgata President Melonie Johnson has been demoted to her former post in Maryland, where she’ll return to the challenge of fending off hard-charging Cordish Gaming. We don’t mean to indulge in schadenfreude by saying we sensed something like this coming. (“Guess she’s finished reducing player’s benefits in AC,” wrote one wag.) Borgata has been struggling of late, despite being at the top of the Atlantic City heap, and November’s calamitous numbers must have been the last straw for MGM Resorts International.
The new man at the helm is Travis Lunn, promoted from the directorship of Beau Rivage and Tunica‘s Gold Strike. This almost completes an extirpation of female chief executives on the Boardwalk, with only Tropicana Atlantic City General Manager Jacqueline Grace remaining. As for the new guy in town, The Associated Press‘ Wayne Parry reported, “MGM said the two Mississippi casinos Lund [sic] oversaw last year achieved record gambling revenue for multiple months while instituting strict COVID19-related health and safety protocols.”
Speaking of player benefits from MGM, the latter jettisoned M Life yesterday, trotting out new MGM Rewards in the wee hours of the morning (6 a.m., EST). Four days earlier, MGM had conducted a jihad on M Life tier credits, a move that went over like a lead balloon. Vital Vegas had heard “rumblings” of the rebrand some time earlier. Indeed, we don’t doubt that the green-eyeshade brigade had been crunching the numbers on a new loyalty club for weeks, if not months. But the speed and stealth with which the MGM Rewards reveal followed the Jan. 2 tier-credit massacre strongly suggests an attempt at damage control.
One of the most significant differences of MGM Rewards is that points can now be earned via non-gambling spending. (And Macao doesn’t qualify, BTW.) If you can spend your way up to the middle level, Gold, you qualify to have your resort fees waived. M Life tier credits earned this month can be rolled into MGM Rewards, while spending at Las Vegas properties results in your tier credits being doubled through the end of April (MGM giveth, MGM taketh away). The threshold for the second-lowest level, Pearl, is lowered by 5,000 tier credits, and perks from Hyatt Hotels, Southwest Airlines and Avis Rental Cars have been thrown into the mix. There’s more but we’re certain you can read about it on the company Web site. Wall Street was awfully keen on M Life (and how it synergized with BetMGM), so we don’t know how it will react to the democratization of loyalty points—even if it’s hella harder to earn them now.
Tomorrow four online sports betting providers go live in New York State. The lucky quartet is BetRivers, Caesars Sportsbook, DraftKings and FanDuel. Lead analyst for PlayUSA, Dustin Gouker, risked understatement by saying “New York will be a fascinating test case for just how much states can tax sports betting without damaging the future of the industry. Launching with four of the best-known sportsbook brands in the U.S. shows that operators have not been dissuaded so far. And there is no doubt New Yorkers will respond in huge numbers, so long as operators can offer competitive products that sufficiently desensitize crossing state lines to place a bet.” In other words, roll out some promo offers that are better than New Jersey‘s.
PlayUSA may not have meant to be understatedly witty when it said it would “difficult” for the Empire State to hit Andrew Cuomo‘s $500 million tax haul in 2024, even at a usurious 51% rate. Before being shamed out of office, Cuomo laid out a sliding scale of projections starting at $99 million this year and escalating sharply to $357 million next year. “For New York to reach $500 million in annual tax revenue, it will take a groundswell of demand that would be unprecedented in U.S. sports betting history,” responded analyst Eric Ramsey, although he stopped short of calling it impossible.
But it might as well be. No U.S. state has ever booked $1 billion in gross sports betting revenue in a year and we fail to see why New York will be any different. We’re talking about $13 billion in annual handle, $2 billion more than New Jersey is slated to generate this year and more than double Pennsylvania. “Bettors will have a variety of sportsbooks to choose from, fostering a healthy market and competitive pricing,” says Ramsey. We wonder. With such narrow profit margins staring them in the face, how competitive and generous can OSB providers afford to be? We’re with Global Market Advisors‘ Brendan Bussmann, who yesterday was downright scathing about the New York model, calling it a disaster for competition and free enterprise, one copied from a state (New Hampshire) which runs an OSB monopoly. Even PlayUSA concedes “that New York will likely not be a profitable environment.” That’s a high price to pay for wider brand recognition.
The Omicron variant of Covid-19 isn’t making itself felt in the casino industry yet, says Deutsche Bank gaming guru Carlo Santarelli. The only state facing adversity, in his projections, is Louisiana, which is tracking -4% for December. Indiana will slow a bit, up 4%, Missouri should be 6% higher than 2019, Ohio will continue to bustle along at +12%, Las Vegas locals are expected to lose 6% more and the Las Vegas Strip is forecast to be up 26%. One caveat: December 31 was a Friday, meaning that Nevada slot revenue for New Year’s weekend will be rolled into January. That being said, it looks pretty good on the whole.
In the extremely unlikely event that the NFL‘s most contemptible team, the Jacksonville Jaguars, beats the Indianapolis Colts this weekend (they are 15.5-point underdogs, presumably because bookies can’t use the infinity symbol), Sunday night’s Los Angeles Chargers/Las Vegas Raiders tilt could become moot. How? If the game ends in a tie, both the Bolts and the Raiders make the playoffs. Some economists are already suggesting that The Fix Is In. Such outright collusion isn’t considered implausible, although the Wall Street Journal notes, “The NFL might decide that such a sham violates the league’s competitive principles and force both teams a forfeit. The teams could face the social pressure of becoming laughingstocks.” At least Chargers coach Brandon Staley has dismissed the idea of tanking the game. What’s more likely is that, with the score close toward the end of regulation (as Raiders games tend to be), both teams stop playing to win. “They’re both going to play the cautious strategy,” predicts MIT economist Glenn Ellison. Of course, all of this is predicated on a Jaguars win Sunday, a scenario that is closer to science fiction than sports.
Jottings: We haven’t heard from Alex Meruelo for a while but he’s reinventing himself as a sports betting operator. His SaharaBets has just partnered with the Arizona Coyotes of the NHL and is expected to launch later this month … Late 2023 is the target date for the land-based iteration of Treasure Chest in Kenner. Owner Boyd Gaming plans to spend $90 million adding 47,000 square feet of gaming floor and a FanDuel sports book. Hard to believe Treasure Chest is 27 years old but so it is … Sports betting in Tennessee in November engendered $37 million in revenue on $366 million in handle. OSB is taxed at 20% in the Volunteer State … Congratulations to Choctaw Casino & Resort in Durant, Oklahoma, on hosting 2022’s first World Series of Poker tourney. Said one player, “Those of us that have had children you’ve got a toddler that’s 18 months old you know when the child is hungry, wet, tired and it’s the same instincts that I use at the table when reading my opponents” … A good thing that Sycuan Casino near San Diego hasn’t taken down its anti-Covid barriers or relaxed its mask mandates. A tubercular player exposed other guests and employees to TB. “Although we don’t think this is a high-risk exposure, testing is recommended for employees who may have been exposed to the infected individual for a significant period of time,” said the county’s deputy public health officer … Did you know MGM Resorts International had a director of wine? Neither did we. “The prices can get pretty insane,” admits the lucky and erudite Douglas Kim … Positive Covid-19 test results in Macao have caused that city’s airport to be closed to international travelers for the next two weeks. Those casinos can’t catch a break … The Great Resignation in the hotel industry is being blamed on low wages. No sh!t, Sherlock. Hospitality lags 13 other economic sectors in wages paid … How do you get your customers to play the latest slot games? If you’re Coeur d’Alene Casino in Idaho, you develop a “Discovery Den,” devoted solely to cutting-edge product—in Class II, that is. The State of Idaho imperially refuses to negotiate with Native Americans over Class III gaming, a disgrace.
Quote of the Day: “Making COVID testing a perk for players, casinos will throw in a free testing kit with each jackpot. If you test positive, your room is free during the duration of your quarantine.”—proposed new year’s resolution for Las Vegas from Ira David Sternberg.
