February numbers are in for Hollywood Casino at Kansas Speedway and it lifted the entire K.C. market 24%, grossing $15 million in 26 days. Once the Hollywood effect is sifted out of monthly revenues, all other casinos were down only a small fraction of a percentage point. In other words, they rode out the first month of major new competition far better than anyone dared expect. Ironically, the biggest whammy fell on Penn National Gaming‘s other area property, Argosy Riverside, down 8%. However, Argosy still beat Deutsche Bank‘s expectations for February. So did Hollywood, which grossed $249/day per slot, 25% above projections.
Hollywood Speedway (for want of less cumbersome nomenclature) represented 43% of all Kansas casino revenues for the month. It was slightly outgrossed by the temporary facility at Kansas Star ($16 million, left), while way out in Fort Dodge, an 8% revenue increase was seen at Boot Hill Casino & Resort, which pulled in $4 million. Eastward, in Kansas City, Missouri, Penn’s newcomer damn near nipped Harrah’s North Kansas City (+3%) and was significantly outgrossed only by Ameristar Kansas City ($19 million, -3%). The small operators that one would expect to be most adversely affected, Isle of Capri Kansas City (+10%) and tiny St. Jo Frontier (+12%), reported the biggest gains on anyone. So it’s basically a happy day for everyone in the market but, obviously, for Penn more than anybody.
Meanwhile, just to the north, a push for casino gambling in Nebraska quickly ran out of steam. The various bills were not without their absurd aspects. A proposed constitutional amendment was basically a shakedown of neighboring states. It, in essence, said: “Give us some of your casino revenue or we’re gonna put some slot houses up right along the border.” Yeah, like that’s gonna have Iowa Gov. Terry Branstad (R) quaking in his boots.
Gambling opponents had a few screws loose, too. The aptly named Pat Loontjer contended the industry “deliberately placed casinos on Nebraska’s border, not only to draw gamblers from Omaha but also to bolster the argument that gambling should expand into the state,” as ABC News put it. Yes, because companies like Penn, Ameristar and Caesars Entertainment crave nothing so much as a batch of fresh competitors on the other side of the river.
Gov. Dave Heineman (R, left) also put a bullet in the limping Nebraska State Fair Grounds racetrack, whose allies tried to convert it to a simulcast-only venue. To this we’ve come? Having horse tracks where the only racing takes place on video screens? The failure of the multi-pronged Nebraska drive takes some of urgency out of Penn’s campaign to bring Iowa casinos onshore. However, if Caesars is really shopping Harrah’s Council Bluffs around, it just caught a break, since potential new competition just got pushed another year away — much better for the sale price.
Hasten slowly. That’s advice of Massachusetts Gaming Commission Chairman-designate Stephen Crosby. If the Bay State adheres to its October deadline for submissions, Crosby reasons, some applicants won’t have all their ducks in a row. Legislators, however, are waxing skeptical. Crosby doesn’t even have a complete commission, two weeks before its review and markup of the enabling legislation is due — and it gets worse from there. Massachusetts is at risk of repeating some of the worst mistakes of Ohio and Pennsylvania: rushing into casino approval without either a regulatory body in place or a fully vetted process.
Although Gov. Deval Patrick (D) is making sympathetic noises, since he’s under the gun himself as he negotiates a compact with the Mashpee Wampanoags. But lawmakers are certain to balk at a one-year delay (as might some casino developers) because that’s how much longer they’ll have to wait to start banking those tax revenues. If Crosby has to hew to the current timeline, we’ll soon know if Caesars is really serious about building a $500 million resort at Suffolk Downs or just bluffing in hopes of getting a slot parlor. Since the latter must be bid first, would-be owners don’t have the option for applying for it as a consolation prize.
Yaphank?!?! Yeah, I’d never heard of it either. However, we might be hearing a lot about Yaphank, N.Y., if the Shinnecock Indian Nation selects the little town on the Long Island Expressway as the site of its much-mooted casino, which it’s been shopping all over the island.
