Posting more than double Wall Street‘s consensus of earnings per share ($0.21 rather than $0.09), MGM Resorts International had a good quarter, to say the least. Even CityCenter exceeded expectations by 11%. J.P. Morgan analyst Joseph Greff took it all in stride, although he did not that better-than-expected RevPAR (up 14%) and other non-gaming revenues added to the exceptionally strong performance.
Greff’s Deutsche Bank opposite number, Carlo Santarelli attributed the robustness of the quarter entirely to the Las Vegas Strip. Strip revenue of $1.3 billion (up 7.5%) was driven mainly by Bellagio, Mandalay Bay and MGM Grand. “The lower tier properties were roughly in line with our forecasts,” Santarelli wrote. MGM Grand Detroit was a bit of an underachiever, declining 5%, but MGM China posted a 26% increase in net revenue. What’s not to like?
Out in Massachusetts, MGM got the results of its arbitration with West Springfield: 425 grand a year to the city, pegged to the consumer price index. There’s also a one-time, upfront subsidy of $665 million to help West Springfield rehabilitate Memorial Avenue and $150K to underwrite a consultant. That’s much steeper than what MGM proposed to pay: $125,000 a year in mitigation. MGM voiced disappointment and promised to take the matter up with the Massachusetts Gaming Commission. (MGC rules forbid splitting the baby, so the arbitrator had to essentially take sides.) Compared to other mitigation agreements MGM negotiated in western Massachusetts, the West Springfield arbitration is mighty rich.
Elsewhere in the state, mitigation agreements are being quickly sewn up by Wynn Resorts. The cities of Cambridge, Medford, Lynn and Melrose are all in the fold. The city of Everett is busy buying up land as part of a larger urban-renewal project to accompany Wynn’s casino, although some think Everett is paying too much.
Not with a bang but a whimper: Legislators in Iowa quietly passed a bill to partially phase out dog racing in the Hawkeye State. It received only five minutes of debate.
“It’s probably easier to launch a nuclear missile.” That’s one of several observations about riding SlotZilla, the permanent zipline that now dominates the Fremont Street Experience in downtown Las Vegas.
Rocky Mountain Headache. Add Colorado to the list of states that are having a problem with gray-market Internet casinos.
Tally-ho! The sport of kings has a new home … Mongolia.
