If MTR Gaming is still afloat today, it’s almost certainly thanks to the fact that its two remaining casinos — racinos in Chester, W.V., and Erie, Penn., enjoy oligopolistic market conditions where competitors are few and far between. A long piece outlines the dilemma faced by MTR. Hunker down and pay off debt, as outgoing CEO Edson “Ted” Arneault puts it, or try to aggressively fight back against a pincer movement from Pennsylvania.
Not only is nearby The Meadows racino (soon to be owned by James Packer) looming as an ever-greater threat, so too might Pittsburgh’s slot parlor … if Don Barden can ever get it finished, which looks doubtful. And MTR’s flagship racino in Chester is little more than a slot barn. Even second-tier Las Vegas locals casinos have evolved beyond that point, which may explain why MTR was a dud in the Vegas market (well, that and the fact that competition isn’t limited by statute), especially its failed tenure at Binion’s. These guys just don’t seem geared for intense, Vegas-style competition nor for casino-centric products.
Beyond the racinos, MTR’s holdings have dwindled to a few small-staffed harness-racing tracks, which might be hard to unload. Since they’re unprofitable, says a Moody’s analyst, how much gain lies in selling them? A source tells me that promised infrastructure upgrades in Chester never materialized (even as revenue grew 33%) and that access to Mountaineer wasn’t much more than a two-lane blacktop. Hard to compete with Pennsylvania, given those conditions. No wonder cash flow is off 34% in Chester.
Like Atlantic City, Mountaineer has an ace up its sleeve in the form of poker and other table games. Blackjack, craps and roulette are all played there (unlike Pennsylvania) and, without them, Mountaineer would probably very soon be toast. If MTR can hang onto that West Virginia table game oligopoly — and maybe scrap the harness tracks — it looks like it’s got a good chance to survive, though not thrive.
Trop still taking. The Culinary Union informs me it chatted up Las Vegas Tropicana management back in May and “certainly haven’t thrown in the towel … As you know, there are major ownership/management changes going on there which is a transition that makes scheduling negotiations challenging.” Management changes we knew about, but ownership … now this is intriguing.
Jerry’s Nugget, up in North Las Vegas, is still hanging tough with the Culinary, too, over a year after its contract elapsed. Small wonder the Culinary doesn’t want to take on the case of the overworked Imperial Palace maids: It’s having trouble closing all the deals already on its plate.
