Y’know, if I was reporting a 120% profit increase in 2Q13, I might stop and enjoy the moment. I certainly wouldn’t choose that moment to be a dick. Obviously, I am not Sheldon Adelson. Proffering evidence that his second infancy must be drawing near, Adelson used an earnings call to throw a tantrum, amidst verbiage which sometimes borders on incoherence. Net revenues at Venelazzo (which represent 11% of the company’s overall revenue) rose ‘only’ 6%, which caused El Bombastico to get his knickers in a twist.
MGM Resorts International and Caesars Entertainment “bring down the average daily room rates me and my friend [sic] Steve Wynn can offer,” Adelson whined. “That 
sucking sound is their room pricing,” he added, blaming Caesars’ low rates to its gluttonous need for debt service. God knows there’s truth in that. But Sheldon, let’s face facts: Very few of Caesars’ hotels could be described as “high end” — almost nothing in the class of what Las Vegas Sands and Mirage Resorts offer. The same is, to a lesser extent, true of MGM, which has heavy presences in the bargain and middle-income sectors. Are you suggesting that $169 room nights should be the new normal at Circus Circus and Harrah’s Las Vegas? No wonder he defies all conventional wisdom, Wall Street consensus and empirical evidence when he says to “look for rapid improvements [in Las Vegas] the next few quarters.”
Waxing magnanimous, Adelson continues, “I suppose if I were in that position I might do the same thing … Of course, they don’t have the quality. Well, the Bellagio was a good property,” he said, adding piously, “Hopefully they get out of [debt].” That’s mighty big talk from someone whose company is carrying over $10 billion in long-term indebtedness and flirted with bankruptcy not so long ago. According to the Las Vegas Review-Journal‘s Howard Stutz, Sands prexy Rob Goldstein (right) — perhaps sensing a PR fiasco in the making — leapt in to say that while the Vegas market is “challenging,” he expected it to slowly improve.
Visitation to Sands’ Macao casino quintet grew 40% and gambling revenue at behemoth Venetian Macao was up 38%. At Marina Bay Sands, the cards were coming up in players’ favor, although the property still managed to outgross Venelazzo. J.P. Morgan‘s Joseph Greff interpreted Sands’ numbers as “right down the fairway” and in line with the Street’s expectations, fueling further speculation as to the cause of Adelson’s petulance. (Hemorrhoids?) Greff forecast increased business at Sands Cotai and in the Macao mass market in general, continued condo sales at Four Seasons Macao and — one or two years hence — the opening of the Japan market to casinos.
But “its questionable, large-scale Spain integrated resort project gets shelved (in our view, management talked very little about it relative to prior calls),” Greff wrote. Indeed, I saw but one paragraph that managed to be elaborately vague about the Iberian misadventure and its future. The Wall Street thinking seems to be that Sands has extracted as many giveaways from the Spanish government as it is likely to receive. Greff even threw in a sarcastic, parenthetical reference to Sands Bethlehem, so in disfavor with Adelson that the company likes to pretend it doesn’t exist (even though it’s regularly posting some of the best numbers in Pennsylvania.)
Meanwhile, former Adelson favorite Steven Jacobs continues to take potshots at the company’s ethics. If his lawsuit ever comes before the bar, it will be the trial of the century. It’s already gone from tragedy to farce, when Sands misled Judge Elizabeth Gonzalez as to the whereaboust of pertinent computer hard drives, using the time-tested “dog ate my homework” defense. Gonzalez wasn’t having any of it and fined Sands accordingly.
Greenwood Racing, better known to you as the minds behind Parx Casino, must be pretty confident in the chances of landing that sixth Maryland casino. They’ve plunked down $1.4 million for a site. That’s 63K an acre, so if Greenwood doesn’t get the casino they’re not too badly out of pocket. Penn National Gaming also is so (over)confident it already owns Rosecroft Raceway. Only MGM is keeping its powder dry with respect to its chosen site at National Harbor. Which, since the gods love irony, means that they’ll be the ones chosen.
Massachusetts Update:
Maybe Sheldon should stop whining and follow Caesars and MGM’s lead onto the Internet and join the 21st century. Last I looked, MGM’s MyVegas.com is a hit in driving business to their properties!