Caesars gets nuked; Jerry Brown gets spanked

Posted on November 18, 2015 by David McKee

“It’s the ultimate nuclear option to try to go after debtors’ counsel.” That’s what Seton Hall University boffin Stephen Lubben says Caesars Palace fireworksof junior bondholders’ latest ploy in their knock-down, drag-out fight with Caesars Entertainment. They’re accusing law firm Kirkland & Ellis — which has already racked up $35 million worth of billable hours on the case (one Kirkland lawyer is making $1,335 an hour) — of a conflict of interest. “I would suspect that [law firm] Jones Day wouldn’t go down this road lightly,” added Lubben.

The road in dispute is whether Kirkland & Ellis was in fact acting objectively when it communicated with Caesars’ board — including Apollo Management and Texas Pacific Group — about Continue reading →

Posted in California, Harrah's, International, Taxes, Tribal, Wall Street | Comments Off on Caesars gets nuked; Jerry Brown gets spanked

Quote of the Day

Posted on November 18, 2015 by David McKee

“We won’t make money at the expense of our employees.” — Sparks Nugget CEO Carlton Geer on the pay raises he instituted as part of a rejuvenation of the faded Reno-Sparks casino.

Posted in Reno | Comments Off on Quote of the Day

DFS: A patchwork of approaches

Posted on November 18, 2015 by David McKee

Although he’s been dissed by New Jersey Gov. Chris Christie (R) and the NCAA (because his bill would allow daily fantasy sports to Whelaninclude college athletes), state Sen. James Whelan (D, right) presses on in his attempt to regulate DFS as a game of skill in the Garden State. His bill would differentiate the pastime from sports betting by forbidding wagering to be predicated on the performance of single athlete, team or parlay of teams, on point spreads or the final score. Assembly Tourism, Gaming & Arts Committee Chairman Ralph Caputo (D) backs Whelan and warned DFS providers, “It’s going to be regulated, one way or the other, and it might not be the way you want.” Caputo, however, wants to wait for New Jersey’s federal appeal of its sports-betting law before taking on DFS.

Right next door, state Rep. Felix Ortiz (D) is pushing a bill that would define DFS as a game of chance. His proposal would amend New York law to define those gambling activities that are Continue reading →

Posted in Atlantic City, Geoff Freeman, Harry Reid, Internet gambling, Marketing, Massachusetts, New York, Pennsylvania, Politics, Regulation, Sports | Comments Off on DFS: A patchwork of approaches

The wacky world of Glenn Straub; New York rescuer for DFS

Posted on November 17, 2015 by David McKee

Instead of hassling Stockton University over ownership of the Showboat (and losing), perhaps Glenn Straub should have been revel_0601developing a long-range plan for heating Revel through the winter, so that the pipes don’t freeze and burst. His solution? Bring in boilers as a temporary solution. The problem? The hot water from the boilers would have to be run through equipment that ACR Energy Partners says it owns. Many’s the time we’ve heard that an end to Straub’s troubles with ACR was just around the corner, yet here we are again. Meanwhile, Straub’s plans for Revel continue to pinball between “a sprawling subterranean horse-stable, a Syrian refugee camp, a cancer-research center, ziplines, a university, a water park and a casino-hotel.” In addition to the indoor water park, Revel will sprout a Continue reading →

Posted in Atlantic City, Entertainment, Glenn Straub, Internet gambling, New York, Ohio, Pennsylvania, Politics, Regulation, Revel, Transportation, Wall Street | 1 Comment

Up and down the Strip

Posted on November 17, 2015 by David McKee

SLS Las Vegas is finally doing better, if by “doing better” you mean losing only $39 million in a full 3Q15 as opposed to the $46 million lost in the truncated (five-week) 3Q14. Stockbridge Capital Partners continues to have to prop up Sam Nazarian‘s pipe SLS Las Vegas Exteriordream, paying another $31 million subsidy to the casino. This brings Stockbridge’s underwriting to $59 million for the year. SLS President Scott Kreeger told Howard Stutz that Stockbridge is “committed to the make the property better,” a commitment that comes with a hefty price attached. Nor is Stockbridge demonstrating great business savvy: Why pay to keep the meaningless, equity-less SLS moniker? At least the W rebranding of the Lux Tower is a big, belated step in the right direction.

One private-equity firm that’s actually flourishing on the Strip is Continue reading →

Posted in Architecture, Cosmopolitan, Derek Stevens, Downtown, Economy, Fontainebleau, Genting, Harrah's, James Packer, Lucky Dragon, LVCVA, Marketing, MGM Mirage, Riviera, Sam Nazarian, Sheldon Adelson, SLS Las Vegas, Tamares Group, Taxes, The Strip, Wall Street | 2 Comments

Banks gun-shy on DFS; Aquinnah tribe suffers major defeat

Posted on November 16, 2015 by David McKee

Another day, another crisis for daily fantasy sports. This week, banks will be soul-searching, grappling with the question of whether to process DFS transactions or not. Market Watch polled some of the major financial institutions and found them taking a wait-and-see attitude, and putting the onus for compliance on DFS sites. A Citigroup spokesman pointedly reminded Market Watch that it doesn’t process anything that’s coded as Internet gambling. Former federal prosecutor Michael Zeldin, now in private practice, urged caution upon theoretical banking clients: “Why would you choose to get in the middle of this legal battle,” he asked. “Generally speaking, the fines these days will outstrip any benefits of staying on board.”

Raging against the perceived hypocrisy of New York State running a lottery that pays only Continue reading →

Posted in Internet gambling, Massachusetts, New York, Regulation, Tribal | Comments Off on Banks gun-shy on DFS; Aquinnah tribe suffers major defeat

The benefits of casino gambling make themselves felt

Posted on November 16, 2015 by David McKee

Minimum wages are a contentious issue on the campaign trail but a settled one at $450 million Stadium Casino. The in-progress Philadelphia gambling hall has committed to a $12/hour minimum wage for its construction and permanent personnel alike. That’s one Cordish Philadelphiaof a number of metrics that the Cordish Gaming/Greenwood Gaming & Entertainment project has set for itself. Another is to hire a permanent workforce that’s 40% female and 50% minority. No more than 15% of workers can be insourced from beyond Pennsylvania borders. Once tips are factored in, dealers are expected to make $70,000 annually.

“The agreements set a new standard for development in Philadelphia in areas of economic opportunity and inclusivity for Continue reading →

Posted in Atlantic City, Charity, Cordish Co., Economy, Greenwood Racing, Internet gambling, Pennsylvania, Rhode Island, Taxes, Technology, Trump Entertainment Resorts | Comments Off on The benefits of casino gambling make themselves felt

Autumn chill in Atlantic City; Christmas present for VictoryLand

Posted on November 13, 2015 by David McKee

For the first time in over a year, there are no casino closings to be factored into Atlantic City‘s gaming revenue, no more same-store comparisons. So how did the Boardwalk fare? Even with an extra Atlantic Cityweekend day, revenue dipped 3%. Slot coin-in and winnings (or “losses” if you’re a player) were both down a percentage point. Although table-game wagering was flat with last year, casino winnings fell 9%.

Lady Luck smiled on Borgata ($58 million), however, where revenues were up 11%. Coin-in rose 12% and winnings 11%. Table play was up very modestly (1%) but the house played lucky, Continue reading →

Posted in Alabama, Atlantic City, Boyd Gaming, Harrah's, MGM Mirage, Mohegan Sun, Regulation, Technology, Tilman Fertitta, Tropicana Entertainment, Trump Entertainment Resorts | 1 Comment

Good news in Massachusetts for DFS and tribe

Posted on November 13, 2015 by David McKee

Home team DraftKings (headquartered in Boston) got a vote of confidence from Massachusetts Gov. Charlie Baker (R), who opined that daily fantasy sports is a game of skill, not of chance. Last Bakerweekend, Baker tried a little DraftKings wagering himself and concluded, “I’m convinced it’s legal in Massachusetts, I don’t have a problem with that … It’s a new enterprise, it’s a new business, it’s a new way of engaging people in these games of skill.” Disparaging his own skill at picking winning players, Baker said, “I was so intimidated by it that I don’t think we’ll ever have to worry about me spending a lot of time on it.”

He’s the second high-profile Bay State ally in DraftKings’ corner, state Attorney General Maura Healey being mainly concerned with consumer protections rather than Continue reading →

Posted in Architecture, Internet gambling, Massachusetts, MGM Mirage, Neil Bluhm, New York, Politics, Regulation, Tribal | Comments Off on Good news in Massachusetts for DFS and tribe

Genting feels the heat; DraftKings fights back

Posted on November 13, 2015 by David McKee

All of sudden this week, Genting Group feels compelled to explain itself and declare that, yes, there really has been $50 million worth Resorts World LVof construction activity at Resorts World Las Vegas, starting with the parking garage. (Perhaps the visible site preparation at Alon spurred Genting to address the media.) Seems the Genting has been at it inconspicuously for months, favoring the late-night and early morning hours when Las Vegas is at its coolest. Genting told the Las Vegas Sun that it’s “continuing with site prep work and perfecting design and integration while waiting for some permits to be issued.”

“A $4 billion project will not be built overnight,” Genting spokesman Michael Levoff said, a tad defensively (and with an unplanned degree Continue reading →

Posted in Election, Genting, Internet gambling, New York, Regulation, Sheldon Adelson, Technology, The Strip | Comments Off on Genting feels the heat; DraftKings fights back

Quote of the Day

Posted on November 12, 2015 by David McKee

slot machine“I hate slots. It’s all up to luck. It’s boring, and I can’t control what happens. The only time I would ever even consider playing is to pretend I am so I could score free drinks.” — Arizona State University student Philip Smith, demonstrating the mindset of the millennial gambler casinos have to win over to electronic games.

Posted in Arizona, Marketing, Technology, Tribal | Comments Off on Quote of the Day

Tohono O’odham win again; Union tackles REIT craze

Posted on November 12, 2015 by David McKee

Forces opposed to the Tohono O’odham Nation‘s attempts to build a casino (due to open Dec. 20) suffered yet another defeat — the Tohono casino18th, by the tribe’s count — when the Ninth Circuit Court of Appeals tossed out a particularly odious piece of Arizona legislation. HB 2534 would have empowered Glendale to annex the Tohono O’odham‘s adjoining land and confiscate the casino. It’s amazing how little the establishment’s mentality toward Native Americans has changed since the 19th century.

Acting on permission from Congress under the 1986 Gila Bend Indian Reservation Lands Replacement Act, the tribe bought Continue reading →

Posted in Ameristar, Arizona, GLPI, Indiana, Mississippi, Missouri, Penn National, Pinnacle Entertainment, Regulation, Tribal | Comments Off on Tohono O’odham win again; Union tackles REIT craze

Same old same-old at Trump; F-blew finally up for sale

Posted on November 12, 2015 by David McKee

Perhaps the biggest question surrounding Trump Taj Mahal is whether, when Carl Icahn takes over, the management team he has publicly upbraided will get to keep their jobs, especially since Uncle trump-taj mahaCarl has perfectly competent people taking care of business over at the Tropicana Atlantic City. In an old-wine-in-new-bottles move, lead Trump Entertainment Resorts [sic] investor Marc Lasry has promoted Taj General Manager Mike Mellon as CEO. Like his predecessor, Bob Griffin, who retired last month in a fit of pique, Mellon was dredged up from the depths of Mountaineer Gaming, before the latter was bought out by Eldorado Resorts.

Don’t expect anything but the same losing ways. “I look forward to the opportunity to emerge from bankruptcy,” Mellon said, “and continue Continue reading →

Posted in Atlantic City, Carl Icahn, Economy, Eldorado Resorts, Fontainebleau, Genting, Massachusetts, Penn National, The Strip, Trump Entertainment Resorts | 2 Comments

Phil Ruffin, International Man of Mystery; Another day, another DFS probe

Posted on November 12, 2015 by David McKee

So now we know where those The Mirage-is-for-sale rumors were coming from. Seems that the place really was not for sale, although ruffinPhil Ruffin wished it was, to the tune of $1.3 billion. And, as badly as MGM Resorts International could use the cash to deleverage, CEO Jim Murren nixed Ruffin’s offer. It’s not the first time Murren has indicated it would take some super-lucrative offer (to the tune of 15X cash flow or so) to make him part ways with Steve Wynn‘s precedent-shattering megaresort.

The deal would have made a lot of sense for Ruffin, whose Treasure Island is umbilically connected to The Mirage and could use the Continue reading →

Posted in Atlantic City, Donald Trump, GLPI, Internet gambling, Macau, MGM Mirage, Phil Ruffin, Politics, Regulation, Sports, Stanley Ho, The Strip, Wall Street | Comments Off on Phil Ruffin, International Man of Mystery; Another day, another DFS probe

Catastrophe for DFS; Strong month for Missouri

Posted on November 11, 2015 by David McKee

Daily fantasy sports’ house of cards continued to topple yesterday when New York Attorney General Eric Schneiderman ordered FanDuel and DraftKings to cease and desist from taking bets in the Empire State, home to 500,000 DFS players. According to Schneidermanthe New York Times, Schneiderman has determined that DFS is flat-out illegal under New York State law. “It is clear that DraftKings and FanDuel are the leaders of a massive, multibillion-dollar scheme intended to evade the law and fleece sports fans across the country. Today we have sent a clear message: Not in New York and not on my watch,” Schneiderman said.

The attorney general’s office investigated DFS in the wake of the Ethan Haskell insider-dealing scandal and determined that “top 1 percent of DraftKings winners receive the vast majority of the winnings.” It also held that ads “seriously mislead New York citizens about their prospects of winning.” To make matters worse, the National Council on Problem Gambling is reporting “severe gambling problems” in connection with DFS.

According to the Times, the sites have themselves at least somewhat themselves to blame by Continue reading →

Posted in Ameristar, Current, Regulation | Comments Off on Catastrophe for DFS; Strong month for Missouri

Quote of the Day

Posted on November 10, 2015 by David McKee

“I think if you classify it as gambling and you try to regulate it in the same fashion as online gambling, the industry ceases to exist. The model that exists today cannot exist under the kind of proposals that I’ve seen.” — Eilers Research Managing Director Adam Krejcik on regulation of daily fantasy sports.

Posted in Internet gambling, Regulation | Comments Off on Quote of the Day

SLS gets new patron; Mixed quarter at Caesars

Posted on November 10, 2015 by David McKee

Revolving doors continue to spin, metaphorically, at SLS Las Vegas. No sooner had Hilton Worldwide dropped the property SLSfrom its Curio brand but Starwood Resorts Worldwide picked up part of the property and slapped its W hotel escutcheon on it. The northeast tower — the only one with “a dedicated entry and reception area for W Hotel guests” will fly the W flag and be managed by Starwood, while SLS Las Vegas President Scott Kreeger rides herd on the other two towers. (Throw in SLS‘ continuing role in running its restaurants and you have a stateroom scene as crowded as in a Marx Brothers movie.)

While owner Stockbridge Capital Partners yields the cream of SLS’ business to Starwood, it gets juiced into Continue reading →

Posted in Harrah's, International, Macau, Marketing, Maryland, Regulation, Sam Nazarian, SLS Las Vegas, Station Casinos, Technology, The Strip | 1 Comment

The woes of Scientific Games

Posted on November 10, 2015 by David McKee

Having devoured seemingly half the manufacturing sector, Scientific Games is having some digestion problems. J.P. Morgan analyst Joseph Greff came off the 3Q15 conference call Wall-streetand promptly halved his price target for the stock “given SGMS’s high operating and financial leverage … we remain Neutral until we gain increased confidence in planned post-Bally Technology–related acquisition costs cuts and synergies translating into stronger free cash flow conversion.”

Scientific missed Wall Street‘s consensus for its cash flow, which it blamed on one of its customers postponing an order from 3Q15 to 4Q15. An eroding installed-slot base didn’t help either, “down 1,751 units year over year.” This is the consequence of seven straight quarters of Continue reading →

Posted in Scientific Games, Wall Street | Comments Off on The woes of Scientific Games

Big month for Maryland; Much ado about Dotty’s

Posted on November 9, 2015 by David McKee

Developers of MGM National Harbor have to like what they saw when Maryland busted out its October revenue numbers: 9% Harrahs Baltimoregrowth (to $95 million), with all five casinos in the plus column. Horseshoe Baltimore General Manager Chad Barnhill is defecting to co-owner Dan Gilbert‘s Cincinnati casino but he leaves on an up note, with the ‘Shoe increasing revenues 10% ($25 million). Even that couldn’t put a dent in Maryland Live, which saw a 9% increase and $55 million in revenue.

The smaller casinos all performed well, with only the 2% increase (for $6 million) at Continue reading →

Posted in Cordish Co., Dan Gilbert, Dotty's, Golden Gaming, Harrah's, Internet gambling, Maryland, MGM Mirage, Penn National, Pennsylvania, Politics, Racinos, Sheldon Adelson, TV | 1 Comment

Caesars exiting Ohio with head held high; New Showboat setback

Posted on November 9, 2015 by David McKee

Caesars Entertainment may have gotten the boot from its three managerial arrangements with Dan Gilbert in Ohio but it’s spending the waning weeks of its tenure putting up impressive cincinnatcasinonumbers. Horseshoe Cleveland ($18 million) was up 4% and Horseshoe Cincinnati had a resounding, 14% million increase, taking $16 million to the bank. The only property where Caesars couldn’t work its magic was ThistleDown Racino ($9 million), down another 8%. Gilbert is reported to be sinking another $70 million into the racino to make it competitive with Hard Rock Rocksino — $17 million, up 12% — but that seems like a real stretch. Total Rewards is on the way out but members can redeem point accrued up to this point at other Caesars properties. Future point accruals will only redeemable at other Rock Gaming properties, like Greektown Hotel-Casino in Detroit.

Although Pinnacle Entertainment‘s Belterra Park continued to bring up the rear in Ohio ($6 million, $148/slot/day), the racino made a Continue reading →

Posted in Atlantic City, Dan Gilbert, Detroit, Eldorado Resorts, Glenn Straub, Harrah's, Marketing, Penn National, Pinnacle Entertainment, Politics, Racinos, Taxes | Comments Off on Caesars exiting Ohio with head held high; New Showboat setback