Missouri miracle; Guarded hope in Illinois, Indiana

Posted on November 10, 2014 by David McKee

Finally, there was good news for saturated gaming markets. Missouri was up 2% last month, although the result was a bit lopsided. The St. Louis market rose 3% while the Ameristar KC-2Kansas City area slipped 2%. The latter appears to be losing business to Hollywood Casino at the Kansas Speedway. Taking it on the chin was Harrah’s North Kansas City, down 6.5%. Ameristar Kansas City slid a bit, too, down 2%. However, Penn National Gaming posted win-win numbers, with Argosy Riverside up 3%. Isle of Capri may have been flat in K.C. but it boasted some sensational numbers outstate, with Lady Luck Caruthersville up 11% and Isle Cape Girardeau rising 21%.

As for St. Louis, Wall Street expectations were happily defied. Only Tropicana Entertainment‘s Lumiere Place lost business, down 4.5%. Pinnacle Entertainment‘s River City crept up Continue reading →

Posted in Ameristar, Boyd Gaming, Donald Trump, GLPI, Harrah's, Illinois, Indiana, Majestic Star, MGM Mirage, Missouri, Neil Bluhm, Ohio, Penn National, Pinnacle Entertainment, Slot routes, Tropicana Entertainment | Comments Off on Missouri miracle; Guarded hope in Illinois, Indiana

Showman Steve; Who’ll take Bucharest?

Posted on November 6, 2014 by David McKee

Rather than hire out entertainment for his Wynncore showroom (the one not occupied by Le Reve), Steve Wynn has taken a DIY approach. He’s producing and co-writing Showstoppers, a revue of some of the most iconic songs from Broadway musicals. It’ll Steve Wynncost a tiny fraction ($10 million) of the budget of a Cirque du Soleil show and the anti-Cirque approach was part of the attraction, according to Wynn himself. “We can’t just surrender to Cirque du Soleil. How many shows can you stand of that stuff. Jumping, popping, swinging. I mean, enough already,” said the man who brought Cirque to the Las Vegas Strip. Besides, creative personnel include choreographer Marguerite Derricks, a Zumanity veteran. Randal Keith, the best King Arthur I’ve seen in Spamalot, will topline the show. The 28 dancers outnumber the original A Chorus Line‘s 18.

Showstoppers may not have have the whimsical grotesquerie of Cirque but it won’t lack for production values. It will have a cast of 34 and a lavish orchestra of 30. “We’ve got to do our own thing here,” Wynn said, dismissing long-running rumors that Continue reading →

Posted in Cirque du Soleil, Columbia Sussex, Cordish Co., Current, Entertainment, Genting, Harrah's, International, Kentucky, Maryland, Penn National, Sports, Steve Wynn, The Strip | Comments Off on Showman Steve; Who’ll take Bucharest?

Quote of the Day

Posted on November 6, 2014 by David McKee

“At present, with shares trading at ~$24.75, we do not see a meaningfully favorable risk-reward. We detail our rationale in the body of this note, but, given financial Pinnacleleverage and the sensitivity to the equity value stemming from multiple contraction in the event of the deal failing to come to fruition, we see downside in the $17 range versus upside to $36 (base case). … While we assign a greater than 50/50 probability to the transaction getting done, we see the timeline as being elongated, and believe the potential exists for further speed bumps along the way.” — Deutsche Bank analyst Carlo Santarelli, evaluating today’s Pinnacle Entertainment REIT bombshell.

Posted in Pinnacle Entertainment, Wall Street | 1 Comment

Election ’14: The day after

Posted on November 6, 2014 by David McKee

MGM Resorts International didn’t wait for the ballots to get cold. It had equipment on site in downtown Springfield yesterday, conducting “geotechnical soil assessments” on the future site of the parking garage. Laying out a timeline for the project MGM Springfield President Michael Mathis said, “Before year’s end we will finalize critical construction permits and close on real estate transactions, including 1200 Main Street and 73 State Street. Additionally, in early 2015 we will announce our general contractor.” Today, the Massachusetts Gaming Commission voted unanimously to grant MGM its license, a privilege for which the company will pay $85 million. It’s appropriate that the vote was across the board as this has always been the least controversial of the Massachusetts casino proposals. With the Springfield and Plainville licenses issued, and Everett in the offing, the MGC can turn its attention to the vexing question of the southeast region.

* In a surprise post-electoral development, Georgia lawmakers revealed that Continue reading →

Posted in Atlantic City, Boyd Gaming, California, Election, Georgia, Harrah's, Internet gambling, Massachusetts, MGM Mirage, PokerStars, Regulation, Sheldon Adelson, Tribal, Wall Street | 1 Comment

REITmania … it’s catching

Posted on November 6, 2014 by David McKee

Pinnacle Entertainment has signaled its intention to follow in the footsteps of Penn National Gaming and convert into a real estate investment trust. It’s Pinnacle HQsomewhat clearer cut than the convoluted Penn/Gaming & Leisure Properties split, with Pinnacle’s property company retaining all the real estate, which would be leased back to the operating company. “Like with [sic] PENN’s strategic rationale, PNK sees the separation as a means to a lower weighted avg. cost of capital & a platform to engage in M&A/consolidation of a maturing industry,” wrote J.P. Morgan analyst Joseph Greff. Pinnacle’s operating company will retain Continue reading →

Posted in Ameristar, Colorado, Donald Trump, Election, Louisiana, Missouri, Penn National, Pinnacle Entertainment, Wall Street | 1 Comment

Election Special

Posted on November 5, 2014 by David McKee

Where gaming-related issues were concerned, there was one big race last night and a
bunch of also-rans. The main event, of course, was Massachusetts, where casino MGM Springfieldrepeal went down to defeat 60% to 40%, good news for Penn National Gaming, hard at work on its Plainville racino, as well as for MGM Resorts International and Wynn Resorts. Having lost big-time, Repeal the Casino Deal will hopefully go away quietly. For instance, support in Springfield was even higher (64%) yesterday than last year (58%) and even West Springfield, which had rejected casinos earlier, flipped to the “aye” category. Wrote the Springfield Republican‘s Ron Chimelis, “the public has spoken twice on the subject, and given the same answer each time. If we are to believe in the value of democracy, we cannot dispute that the will of the people is to give MGM its chance.”

“You’re not going to get people excited if it’s not in their backyard,” said Boston College casino expert Rev. Richard McGowan and the planned casinos will be Continue reading →

Posted in California, Colorado, Economy, Entertainment, Illinois, Isle of Capri, Kansas, Massachusetts, MGM Mirage, Penn National, Pinnacle Entertainment, Racinos, Rhode Island, South Dakota, Station Casinos, Steve Wynn, Tribal, Wisconsin | 2 Comments

Quote of the Day

Posted on November 5, 2014 by David McKee

Wynn-Macau“The policy of the central government in being very, very aggressive about what appeared to be a misconduct and corruption of the government has put a lot of the wealthy businessmen in the foxholes.” — Steve Wynn, on the decline in VIP business in Macao, where government policies are expected to depress gambling revenues for at least another two months.

Posted in Economy, Macau, Steve Wynn | Comments Off on Quote of the Day

Linking to The Linq; Tribal Internet push

Posted on November 4, 2014 by David McKee

After an unhappy interregnum as The Quad, the former Imperial Palace officially becomes The Linq today. (What was up with that Quad nonsense anyway?) It might as well be called “The Millennial,” given the number of amenities targeted to that demographic. It’s not just the eco-friendly products dispensed in waste-not fashion in the bathrooms to help with your ablutions. There are also USB outlets in the hotel-room lamps, showing that Caesars Entertainment has irrevocably entered the 21st century and every room is a WiFi hot spot (at the price of a $25 resort fee). Were it not for the $25 levy, Linq rooms would be the bargain of the Strip, going for as little as $65 a night.

Goodies at the 3535 bar range from wine on tap to a Continue reading →

Posted in California, Dining, Donald Trump, Environment, GTECH, Harrah's, IGT, Internet gambling, Technology, The Strip, Tribal | Comments Off on Linking to The Linq; Tribal Internet push

Case Bets: California, Boyd

Posted on November 4, 2014 by David McKee

Always cover your bets. That’s the lesson Sacramento‘s Casino Royale card room learned after being caught twice with a shortage of cash. The California Department of Justice had no patience this time and shuttered the casino, seeking a permanent revocation of its license. That’s pretty rough luck for Casino Royale employees.

* Boyd Gaming CEO Keith Smith talks up Atlantic City‘s immediate future and eloquently sidesteps the question of Boyd becoming a REIT. Cruel Irony: Not one of the casinos on the studio backdrop of Las Vegas is a Boyd property. Continue reading →

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Decision time; Failure in Japan

Posted on November 4, 2014 by David McKee

Casino supporters showed up in force in Springfield, Massachusetts, touting the charitable benefits — not to mention the employment ones — that would stem from an MGM Resorts International casino. For instance, MGM would continue its sponsorship of a local boxing club for young men that has gone to Ireland tw0 summers running. “It’s going to create so many programs just to help out the city’s youth,” said Western New England Golden Gloves Executive Director Dean Fay, “a narcotics detective with a vice grip who’s built like a middle linebacker.”

HealeyPerhaps Springfield should have sent Fay to talk sense to Democratic candidate for state attorney general Maura Healey, who endorsed anti-casino “Yes on Three,” trotting out a stock set of anti-casino arguments. Unfortunately for her, Healey’s proposed solutions are outside the purview of her would-be office: “infrastructure development, investments in education and job training, a more ‘progressive tax structure,’ an increase in the minimum wage and ‘unionizing our workforce’ to help create jobs and prepare residents for the modern economy.” What she could and would do is form a Gaming Division at industry expense and sent investigators to fan out across gaming floors statewide.

Continue reading →

Posted in Charity, Election, Genting, Harrah's, Japan, Massachusetts, MGM Mirage, Neil Bluhm, Politics, Sheldon Adelson | Comments Off on Decision time; Failure in Japan

Rough times in Macao; The NFL’s double standard

Posted on November 3, 2014 by David McKee

At least in relative, this month is shaping up as the worst in Macao‘s casino history, with the gambling industry looking at a 23% drop in gross receipts. And when 80% of
Macau_Hotel_Casino_Lisboa_Macauyour economy is predicated on casinos, you’ve got a problem. “I don’t know if it is a squall or if we are in the rainy season, or how long it will last, but we are still very bullish on Macao,” said Steve Wynn, putting the best face on five months of decline. It’s a perfect storm of factors: VIP players are lying down during an anti-corruption campaign, providing only 56% of gambling revenue, visa durations to Macao have been shortened and it’s harder to get there via Hong Kong, due to pro-democracy demonstrations in the former British colony. Throw in curtailment of the UnionPay credit card, a weakening real estate market on the mainland and a yet-t0-be-felt ban on smoking in Macao and there’s plenty about which to be nervous.

The buzzword for Wynn and Sheldon Adelson is Continue reading →

Posted in Architecture, Atlantic City, International, Macau, MGM Mirage, Regulation, Sheldon Adelson, South Korea, Sports, Steve Wynn | 2 Comments

Mark your ballots; Trump Taj: Welfare queen

Posted on November 3, 2014 by David McKee

Tomorrow we get to exercise that precious franchise, the vote. So don’t oversleep, ‘kay?

As everyone knows by now, the big rumble is in Massachusetts, where an attempt to repeal the state’s casino law is failing by a substantial margin in the polls, Coakleyoverwhelmingly outspent by MGM Resorts International, Penn National Gaming and latecomer Wynn Resorts. However, several ‘sure thing’ casino projects got voted down over the past two years, so nothing should be taken for granted. Casino repeal has the support of the Boston Globe and of Sen. Elizabeth Warren (D), but not of gubernatorial aspirants frontrunner Charlie Baker (R) and Attorney General Martha Coakley (D, left). Pro-casino forces are keeping their fingers crossed because a “yes” vote means nixing casinos and a “no” vote is for keeping them. S&G urges a “no” vote tomorrow.

* In Colorado, it’s casino vs. racino in a battle that would put one racino each in Pueblo, Arapahoe and Mesa counties. This isn’t the quick fix it looks like: Continue reading →

Posted in Atlantic City, California, Colorado, Election, Kansas, Massachusetts, MGM Mirage, Penn National, Politics, Racinos, Regulation, Rhode Island, South Dakota, Station Casinos, Steve Wynn, Tribal, Trump Entertainment Resorts | Comments Off on Mark your ballots; Trump Taj: Welfare queen

Wynn’s oysters schucked

Posted on November 3, 2014 by David McKee

stevewynnDetails of Steve Wynn‘s site-remediation plan are starting to emerge and they include rendering tainted soil inert by mixing it with cement. What they don’t include anymore are oyster beds to process polluted Mystic River water. Government officials nixed this on the grounds that there was no way of stopping residents from harvesting and eating tainted oysters. Well, Steve tried. Give him points for creativity.

The $30 million project is estimated to take four months and some of the pollutants could qualify as antiques. Long before Monsanto, the Wynn land was used by chemical manufacturers as far back as 1868. Wynn will also be be required to pay whatever it takes to mitigate traffic congestion in Sullivan Square and every vehicle trip above a yet-to-be-specified maximum will cost him Continue reading →

Posted in Atlantic City, Boyd Gaming, Environment, Harrah's, International, Internet gambling, Massachusetts, PokerStars, Politics, Steve Wynn, Terry Caudill, Transportation | 1 Comment

Unhappy Halloween

Posted on November 3, 2014 by David McKee

 

CasinoSchools

Right-leaning Stand by Children Arizona, in the course of endorsing six GOP candidates, went a little screwy. Its poster art looks like something out of a cheap Fifties horror film, with zombie-faced Little Johnny’s proverbial one-room schoolhouse about to be devoured by the Golden Nugget and Four Queens. Whoever knew downtown Las Vegas was such a peril to Arizonans?

Posted in Downtown, Election, Tilman Fertitta | Comments Off on Unhappy Halloween

Boyd impresses the Street, MGM disappoints

Posted on October 31, 2014 by David McKee

Boyd Gaming pleased Wall Street with its 3Q14 results, of which Joseph Greff of J.P. Morgan said “margin improvement was notable and impressive.” He noted samstown-pic2modest growth in the Las Vegas locals and downtown segments and better-than-expected regional numbers, as well as at Borgata. He wrote “the recent reduction of capacity (and the potential for more) could be a positive for the Borgata, but any political momentum behind commercial casinos in northern [New Jersey] would be a sizable negative.” As for regional markets, “the degree to which year-over-year declines may indicate some stabilization (can be characterized as getting less bad)”

In Las Vegas, “strong pedestrian traffic in the Fremont Street area and growth in visitation from Hawaii” drove a slight Continue reading →

Posted in Atlantic City, Boulder Strip, Boyd Gaming, Current, Downtown, Economy, Environment, Genting, Hawaii, Macau, MGM Mirage, Reno, Sam Nazarian, The Strip, Wall Street | Comments Off on Boyd impresses the Street, MGM disappoints

Feeling squeezed in Delaware, Indiana

Posted on October 31, 2014 by David McKee

No two ways about it, Delaware‘s racinos are failing. However, they have an ambitious plan to reverse that … providing the state is cooperative. One of the reasons the tracks Delaware leg-hallare struggling is an onerous 40% tax rate on table games, which the racinos would like to see reduced to 15%. Members of the  Video Lottery Advisory Council also proposed “that the tax rate on table games be revised, either by lowering the rate or by subtracting half the revenue to help casinos cover payrolls for the labor-intensive games before distributing the remaining money among the state, the casinos and the horse racing industry.”

The council also proposed pegging the tax rate on slots to gross revenues: higher when play is strong, lower when it is not. The council is also pondering Continue reading →

Posted in Bally Technologies, Delaware, Economy, Maryland, Ohio, Politics, Racinos, Scientific Games, Technology, Tribal | Comments Off on Feeling squeezed in Delaware, Indiana

Friday Case Bets

Posted on October 31, 2014 by David McKee

America‘s second-largest casino market, Pennsylvania, has truly hit the jackpot, according to a new study by Oxford Economics. It addition to engendering 18,000 direct-employment jobs, casinos have generated economic impact of $6.2 billion and paid $2.4 billion in taxes, not to mention generating $1.7 billion in wages (some of which may be indirect). Gambling grossed $3.1 billion, while amenities yielded another $250 million.

Geoff-FreemanThe 33,574 direct and indirect jobs are making the difference between 5.7% unemployment and 6.6% (theoretical). Casinos are also effectively providing tax relief of $488 per household for Pennsylvanians. American Gaming Association President Geoff Freeman was quick to tout the impressive numbers and appeal for tax relief. “How do we take 34,000 jobs and turn it into 50,000 jobs,” he asked. “How do we take $2.4 billion in tax payments and turn it into Continue reading →

Posted in Arizona, Economy, Harrah's, Pennsylvania, Station Casinos, The Strip, TV | Comments Off on Friday Case Bets

NHL maybe, NBA not so much

Posted on October 30, 2014 by David McKee

“Preliminary talks” could mean relatively nothing but when one of the principal parties is MGM Resorts International, you have to take them seriously … especially when NHLMGM is building an arena intended for major-league sports. Still, there don’t appear to be direct negotiations with an actual team but instead “a group interested in housing an NHL team.” Very different. Sports Business Daily has looked at the economics of an NHL franchise in Sin City and concluded that they don’t pan out. Then there’s the hostility of the league itself. Another wrinkle is that MGM partner AEG owns the Los Angeles Kings. The company would probably welcome having another market in which to show off the Kings, but how does it feel about building an arena whose primary tenant would be a rival franchise?

It still seems far more plausible than Continue reading →

Posted in Archon Corp., Entertainment, MGM Mirage, Sports, The Strip | 1 Comment

Quote of the Day

Posted on October 30, 2014 by David McKee

MGM Springfield painting“Reneging on the promise to Springfield won’t just disappoint the community leadership and those hopeful citizens whose futures might ride on this particular economic development project; going back now will also hurt the efforts of all those who try to market Massachusetts as a state that stands behind its promises to those who want to do business here.” — editorial in The Springfield Republican urging against a repeal of Massachusetts’ casino law.

Posted in Economy, Election, Massachusetts, MGM Mirage | Comments Off on Quote of the Day

Clashing views on MGM; Shotgun wedding in Pennsylvania

Posted on October 30, 2014 by David McKee

MGM Resorts International‘s third quarter was “better than expected” if you were J.P. Morgan analyst Joseph Greff and “disappointing” if you are Deutsche Bank‘s Carlo Mandalay-Bay-picSantarelli. It’s a matter of how MGM performed relative to analyst forecasts. While the Las Vegas Strip properties arrived $42 million below Greff’s prediction, including an $18 million miss on table hold, he cited several extenuating circumstances, including construction disruption at Mandalay Bay and Monte Carlo. Santarelli was unforgiving, although MGM only missed his cash-flow projection by $31 million. He wrote, “unfortunately, the goodwill built up in the Strip margin story likely took a hit with this print. While disruptions were present, including construction and table hold, the result … is rather difficult to ignore.”

Santarelli conceded some praise to MGM for a 6% increase in Continue reading →

Posted in Cannery Casino Resorts, CityCenter, Detroit, GLPI, Harrah's, Macau, Mississippi, Pennsylvania, The Strip, Wall Street | Comments Off on Clashing views on MGM; Shotgun wedding in Pennsylvania