The Strip: February disappoints

Posted on March 31, 2015 by David McKee

Las Vegas Strip casino revenues fell 4% in February, in a month that was mildly positive on a statewide basis, up 1%. Blame baccarat: Play was down 22%, although players took the Cosmo 1978house to the cleaners, with casino win down 23%. Were it not for the baccarat blowout, Strip gaming revenues would have been up 3%. J.P. Morgan analyst Joseph Greff wrote that “the market should continue to experience volatility in baccarat play given the slowdown in Chinese players; that said, non-baccarat table and slot handle volumes are getting better,” adding that slot revenue numbers were artificially low because the month ended on a Saturday. (Weekend slot play isn’t counted until Monday.) Even so, slot win rose 4.5%, even on 2% lower coin-in. Non-baccarat table play was flat, grossing $165 million.

For a change, locals play outdid the Strip, rising 4%, even with Downtown only Continue reading →

Posted in Boulder Strip, Cosmopolitan, Donald Trump, Downtown, Economy, Lake Las Vegas, North Las Vegas, Reno, The Strip, TV, Wall Street | Comments Off on The Strip: February disappoints

Quote of the Day

Posted on March 30, 2015 by David McKee

“There is a reason bondholders restricted the funds that could be paid out to owners. boulderstation-picBondholders lost almost everything in Station Casinos’ Chapter 11 bankruptcy reorganization, which followed a leveraged buyout that paid insiders $660 million with borrowed money … Even though Deutsche Bank and the other owners are ‘happy with the performance’ of Station Casinos, as the company described it recently, they shouldn’t pay themselves a special dividend by levering up the company and putting virtually all the risk on the unsecured creditors,” — Culinary Union Research Director Ken Liu, on a proposal by Station to borrow $300 million in order to pay dividends to ownership, a bit of crony capitalism that’s flown under the media radar.

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Macao: What, us worry?; Florida grapples with gambling

Posted on March 30, 2015 by David McKee

Two Hong Kong-based stock analysts recently met with the Macanese Gaming Inspection & Coordination Bureau. Much to their surprise, when they asked “what
Chui Sai-Onpositive policy measures can be enacted to help stop the trend of negative gaming revenue growth,” they were led to believe “the current negative run-rate of gaming revenues is so far not a major concern.” This comes on the heels of Chief Executive Fernando Chui‘s prediction of a 31% decline in gambling revenues. Chui also vowed to “adjust the pace” of casino growth in Macao, “without changing the momentum.” (Two goals that sound, at first blush, irreconcilable.) He promised tighter regulation and more attention paid to problem gambling. Job losses, Chui warned, might be a side effect of his new policies.

Then there’s the dreaded Continue reading →

Posted in Economy, Florida, Horseracing, Idaho, Macau, Politics, Problem gambling, Racinos, Regulation, Sheldon Adelson, Tourism, Transportation, Tribal | Comments Off on Macao: What, us worry?; Florida grapples with gambling

Dr. Loveman’s voodoo; Reid hangs it up

Posted on March 30, 2015 by David McKee

Despite having wrought havoc upon Caesars Entertainment, Chairman Gary Loveman — looking alarmingly puffy and ill — manages to still find himself taken seriously as a talking head. He gave CNBC a dosage of his usual spin-doctoring. This includes one of Loveman’s most remarkable traits: Continue reading →

Posted in Atlantic City, Cordish Co., Geoff Freeman, Harrah's, Harry Reid, history, Japan, Maryland, Pennsylvania, Politics, TV, World Series of Poker | Comments Off on Dr. Loveman’s voodoo; Reid hangs it up

Quote of the Day

Posted on March 27, 2015 by David McKee

MGM National Harbor“This is still capitalism. [A community benefits agreement] provides you the opportunity to compete, but there is no special treatment, and there is no guarantee that you would win.” — Roland L. Jones, director of the Prince George’s County Office of Central Services, responding to criticism that MGM National Harbor is overlooking “qualified and experienced” minority businesses in its contracting process. So far, 500,000 cubic tons of soil have been moved an 6,000 pilings have been driven.

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Elaine Wynn’s credibility problem; Caesars faces tough scrutiny

Posted on March 26, 2015 by David McKee

Elaine Wynn is starting to develop a credibility problem, at least if you read the Bloomberg story that characterizes various instances of Ms. Wynn either passing the buck or Elaine Wynnbeing in denial. For instance, she claims not to have known that Steve Wynn wanted to do a joint-venture development on the old New Frontier site with El-Ad Properties. Hell, everybody in the gaming world knew that, Mr. Wynn having broadcast it in an investor call. She also claims ignorance of a $9.5 million stock sale made during a “dark” period leading up to an earnings report. She puts the blame for the stock boner on her foundation. “I did not sell shares to put money in my pocket to go buy boats,” she said defensively. “After the fact they raise the issue this was a dark period.”

Ms. Wynn does have a good point, made previously, when she says that sharing insider information about any Wynn Resorts interest in the New Frontier parcel with nephew Andrew Pascal would have been detrimental to her own financial interest, which is deeply intertwined with that of Wynn Resorts itself. As for controversial perks, Continue reading →

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Saving souls on Capitol Hill

Posted on March 26, 2015 by David McKee

Rep. Jason Chaffetz (R) finally got to hold his dog-and-pony show on the eeeeeeevils of Internet gambling, after a previous date had been snowed out. As expected, the proceedings Chaffetz“broke little new ground” on the issue. Afterward, Chaffetz condescended to say, “We’re doing the hearing for a reason.” One hopes so, since taxpayers are bankrolling this spectacle. He also set off B.S. detectors everywhere when he denied being a minion of Sheldon Adelson, whose money keeps people like Chaffetz in office. Apparently having never heard of geolocation, Luddite and House Judiciary Committee Chairman Bob Goodlatte (R) blathered, “In other words, how would you ensure that online gambling, if legal in one state, wouldn’t bleed over into a neighboring state where it is not legal, particularly since the Internet doesn’t stop at state borders?”

But the Silly Catchphrase Award goes to  Continue reading →

Posted in Atlantic City, Fontainebleau, Harrah's, Internet gambling, New York, Politics, Regulation, Revel, Sheldon Adelson, Technology, Tribal, Trump Entertainment Resorts | Comments Off on Saving souls on Capitol Hill

Quote of the Day

Posted on March 26, 2015 by David McKee

“These guys don’t know a Manolo Blahnik from a … flip flop.” — Elaine Wynn, expressing her opinion of the Wynn Resorts board of directors.

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Reid’s heavy hand; Staying the course in Macao

Posted on March 26, 2015 by David McKee

Financing of SLS Las Vegas was made a little easier when Sen. Harry Reid (D) intervened on behalf of some of Sam Nazarian‘s all-important EB-5 visa investors. The inspector general of the Department of Homeland Security has identified four SLS investors who benefited from special treatment when Deputy Secretary Alejandro Mayorkas overturned the rulings against applicants who had been denied. “Their allegations were unequivocal: Mr. Mayorkas gave special access and treatment to certain individuals and parties. They told us he created special processes and revised existing policies in the EB-5 program to accommodate specific parties. According to the employees, but for Mr. Mayorkas’ actions, the career staff would have decided these matters differently,” read the IG’s report, but the applicants were “politically connected.”

It gets better. Rory Reid was on retainer, providing his legal talents to Nazarian’s project. (Reid fils had no comment on the matter.) At the same time, Mayorkas “also took the extraordinary step of requiring staff to Continue reading →

Posted in Economy, Election, Harrah's, Harry Reid, Macau, Melco Crown Entertainment, MGM Mirage, Movies, Regulation, Sam Nazarian, The Strip | Comments Off on Reid’s heavy hand; Staying the course in Macao

War of words at Wynn; Resorts World a ‘go’

Posted on March 25, 2015 by David McKee

Efforts by the local press to cover the Wynn vs. Wynn scrum were pretty well obliterated this week by a one-two punch from the New York Times. Behind the “no girls allowed” Elaine Wynntreehouse mentality of the Wynn Resorts board lurks a wealth of complexity. The primal issue is Nevada Board of Education President Elaine Wynn‘s desire to lift the $10 million cap on the amount of stock she can sell every year, which the board opposes for fear it will destabilize ownership of the company, especially CEO Steve Wynn‘s controlling position, which could take second place to that of T. Rowe Price (whom Ms. Wynn is trying to recruit). Five years ago, Mr. Wynn said, “We’re still partners in the business; I respect and value and really covet her opinion on issues. She has a real feel for the business that’s terrific.”

Whether or not he still feels that way, he’s contractually constrained from taking any stance other than supporting Ms. Wynn’s re-election to the board. Thus, she starts out with 19% of the stock at her back and she’s launched a high-profile campaign to get Continue reading →

Posted in Architecture, Fontainebleau, Genting, James Packer, Sheldon Adelson, Steve Wynn, The Strip, Wall Street | Comments Off on War of words at Wynn; Resorts World a ‘go’

Case Bets: Okada, Massachusetts, Connecticut, Ruffin

Posted on March 20, 2015 by David McKee

It’s been a good week for Kazuo Okada. The boss of Universal Entertainment Corp. announced that investigations of him in Japan and the Philippines had closed and given Okada 2him a clean bill of health. The probes were set off by $110,000 in Okada gifts to Filipino casino regulator Pagcor. “We consider that having received the above investigation results by investigative authorities in the Philippines and Japan – which are understood to be the place of the act and the place where the results occurred for the suspicion – the investigation will be closed due to the lack of evidence,” read a company statement, alluding to license renewals of Okada’s Aruze Corp., manufacturer of gaming devices.

Yesterday, Okada received a conditional license renewal in Mississippi. The condition is that he’s cleared of suspicion in an ongoing FBI investigation of the Filipino matter. Okada blamed all his problems on the hometown paper, the Asahi Shimbun, and on Reuters. Acting like visiting royalty, Okada yelled at reporters and refused to take questions unless they were prefaced with an apology. The closest thing he got Continue reading →

Posted in Foxwoods, Japan, Kansas, Kazuo Okada, Massachusetts, Mississippi, Mohegan Sun, Phil Ruffin, Philippines, Regulation, Steve Wynn, Tribal | Comments Off on Case Bets: Okada, Massachusetts, Connecticut, Ruffin

Caesars: Total Rewards value is zilch

Posted on March 20, 2015 by David McKee

You and I might think that Total Rewards is Caesars Entertainment‘s prize asset — so much so that Chairman Gary Loveman built his reputation on it. However, in the Dr Lovemancurrent bankruptcy proceeding, Caesars is attributing no equity value to it. That’s one of several preposterously low valuations ($80 million for Horseshoe Baltimore? None for company trademarks?) that the company has put forward. Creditors assert that Total Rewards is worth over $1 billion and I don’t think Caesars should be insulted if I say they’re probably right. Who in the casino industry wouldn’t like to take a deep dive into that database?

The dissident creditors charge that Caesars’ sleight-of-hand asset transfers gave Loveman and company owners “virtually all of the attributes of ownership and control of Total Rewards” for not even a penny. CreditSights analyst Chris Snow said the transfer  Continue reading →

Posted in Harrah's, Marketing, South Korea, The Strip, Wall Street | 2 Comments

The wrath of Icahn; Cautious progress in Indiana

Posted on March 19, 2015 by David McKee

Using the power of the blogosphere, Carl Icahn opened an extra-large can of whup-ass on Unite-Here Local 54 today. While he fleetingly alluded to the ineptitude of Trump Entertainment Resorts management (“The bottom line is that, even without making carl_icahnexorbitant contributions to the UNITEHERE Health plan, the Taj Mahal is currently losing millions of dollars every month …”), Trump spent most of his letter putting a beatdown on Local 54 President Robert McDevitt. Noting that the local’s health plan had racked up a $140 million profit over the last five years (a much better financial track record than that of the Taj), Icahn wrote that “your union leadership continues to demand that the Taj make exorbitant contributions.”

This motivated him to liken Local 54 to a Mob protection racket that “would demand grocers pay for protection or Continue reading →

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Nugget drives Louisiana; Sauce for the goose in Pennsylvania

Posted on March 19, 2015 by David McKee

Subtract the Golden Nugget Lake Charles from last month’s Louisiana gambling revenues and they’re absolutely flat with 2014. Two wannabe REITs went in opposite directions. Auberge BR casino floorPinnacle Entertainment‘s aggregate Pelican State casinos were up 9% while Caesars Entertainment got hammered, down 14%. Boyd Gaming‘s considerable Louisiana holdings were up 2%. If Gaming & Leisure Properties succeeds in its hostile takeover attempt of Pinnacle, the Federal Trade Commission will almost certainly force it to sell one of the two Baton Rouge riverboats it would control. The choice between Hollywood Baton Rouge ($7 million) and L’Auberge Baton Rouge ($15 million, well over half the market) ought to be easy, as L’Auberge is running away Continue reading →

Posted in Boyd Gaming, Churchill Downs, GLPI, Greenwood Racing, Harrah's, Internet gambling, Isle of Capri, Marketing, Neil Bluhm, Pennsylvania, Pinnacle Entertainment, Politics, Racinos, Regulation, Sheldon Adelson, Taxes, Technology, Tilman Fertitta, Tropicana Entertainment | Comments Off on Nugget drives Louisiana; Sauce for the goose in Pennsylvania

Whither McCartney?; Distress at Caesars

Posted on March 19, 2015 by David McKee

Earlier this week, Vegas Tripping reported the departure of Thomas McCartney from The Cosmopolitan of Las Vegas. In its press release, the Cosmo went beyond the trop-tom-mccartneyneutral sort of verbiage reserved for such pronouncements, saying that “Mr. McCartney did not step down as the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.” There was no mention of “lovely parting gifts” but that’s still a nice note to put in Mr. McCartney’s personnel file.

The question is, where does McCartney go next? It’s tempting to think that his next stop is Resorts World Las Vegas, but McCartney’s specialization is turning a property around, not Continue reading →

Posted in Atlantic City, Carl Icahn, Cosmopolitan, Delaware, Genting, Harrah's, Illinois, James Packer, New York, Riviera, SLS Las Vegas, Station Casinos, The Strip, Trump Entertainment Resorts | 1 Comment

Litt raises pressure on MGM

Posted on March 19, 2015 by David McKee

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MGM’s REIT risk; Will Lone Star State go for gambling?

Posted on March 18, 2015 by David McKee

Investor Jonathan Litt‘s proposed conversion of MGM Resorts International isn’t just another random case of REITmania. According to Forbes, MGM is expected to return to MGM_Cotaiprofitability this year and “some of those expected profits will leak into government coffers.” REITs are tax-exempt, which is what’s making them so sexy to the gaming sector right now. One of the planks in Litt’s platform is asset sales and not even Macao is sacred. According to a statement release from his Land & Buildings fund, “spinning out or monetizing MGM China would focus investors on attractive domestic trends.”

However, in Las Vegas Sands director Jason Ader Forbes has finally found someone who will address the Continue reading →

Posted in Economy, Macau, Maryland, Massachusetts, MGM Mirage, Politics, Regulation, Sheldon Adelson, Sports, Texas, Wall Street | 2 Comments

What’s Pinnacle worth?; Trump dump

Posted on March 18, 2015 by David McKee

J.P. Morgan analyst Joseph Greff has been running the numbers on Gaming & Leisure Properties‘ hostile-takeover bid for Pinnacle Entertainment and concluded — no surprise — that the current offer won’t get the deal done, even if Pinnacle leadership will lauberge_exterioreventually have to bow to shareholder pressure and sell. (All of this is subject to the caveat that GLPI hasn’t performed its due diligence on Pinnacle yet.) I’ll admit that the thought of Pinnacle assets falling into the mitts of GLPI makes me a bit queasy, like selling a Rolls-Royce to someone who still drives a Yugo. That thought aside …

Greff doesn’t think the present, $35.77/share price will get the deal done but $42/share may be the magic number, even though it requires GLPI to put another Continue reading →

Posted in Boyd Gaming, Current, Donald Trump, GLPI, MGM Mirage, Penn National, Pinnacle Entertainment, TV, Wall Street | 1 Comment

Elaine Wynn fights on; Floridians heart Seminole casinos

Posted on March 17, 2015 by David McKee

Showing that two can play the press-release game, Elaine Wynn released an open letter to Wynn Resorts shareholders, urging them to vote their gold-colored proxy cards in her favor. Citing her “my immense industry knowledge and expertise, and my role building and promoting the Wynn business and brand through the years,” Ms. Wynn sought to put as little distance between herself and Continue reading →

Posted in Florida, Hard Rock International, Horseracing, Japan, Kentucky, MGM Mirage, Politics, Sheldon Adelson, Steve Wynn, Tribal, Wall Street | Comments Off on Elaine Wynn fights on; Floridians heart Seminole casinos

Macao’s Great Recession; Caesars shreds contracts

Posted on March 17, 2015 by David McKee

Yes Virginia, there is a recession in Macao. With two consecutive quarters of negative GDP growth, the casino city meets Wall Street‘s definition of a recessionary economy. Eighty Venetian Macaopercent of Macanese revenue comes from gambling, so when the central government in Peking cracked down on VIP players, cash transfers and visas, banned smoking, and put the brakes on several infrastructure projects the stage was set for Macao to take a fall.

Bank of America analyst Shaun C. Kelley says not to panic: “Macao is not empty. General traffic patterns around the properties felt Continue reading →

Posted in California, Economy, Entertainment, Harrah's, Louisiana, Macau, New York, Philippines, Planet Hollywood, Regulation, Sheldon Adelson, Sports, Steve Wynn, Tourism, Transportation, Wall Street | Comments Off on Macao’s Great Recession; Caesars shreds contracts