Life after Revel?

Posted on August 19, 2014 by David McKee

revel_0601Once safely closed — and rid of those pesky employees — Revel could find itself a valuable commodity again. Salaries really are at the crux of the issue. Current ownership is losing $2 million a week and that “black hole” is keeping potential buyers away. ‘To entice acceptable bids,’ it was necessary to close the casino-hotel. We’ll see if anyone emerges from the undergrowth by Sept. 2, the latest date for the oft-postponed bankruptcy auction.

If Revel management had its druthers, the place would already be closed. However, the state ordered it to stay in operation through Continue reading →

Posted in Atlantic City, Economy, Macau, Racinos, Regulation, Revel, Sheldon Adelson, Singapore, Sports, Taxes | 1 Comment

The return of the Strip; Panic over Macao

Posted on August 18, 2014 by David McKee

snazLas Vegas‘ recovery from the Great Recession is all but official. To be truthful, a number of us — myself in particular — thought we were being played for suckers when Sam Nazarian closed the Sahara and promised to be back with something better. Now he’s just days from opening a new, $415 million casino and green shoots are sprouting up around that. No, I don’t count that buffoonish, debt-financed All-Net Resort that’s mooted for the old Wet ‘n Wild site. However, Nazarian’s site will be flanked by a new Walgreen‘s superstore (the third such on the Strip, all of recent vintage) and MGM Resorts International‘s music-festival plaza across the Strip.

True, Fontainebleau is still a Continue reading →

Posted in Carl Icahn, Fontainebleau, Genting, International, James Packer, Macau, Melco Crown Entertainment, MGM Mirage, Sam Nazarian, Sheldon Adelson, Singapore, Steve Wynn, The Strip, Wall Street, Westgate LV | 4 Comments

Pacifism in Alabama; Flop in Florida

Posted on August 18, 2014 by David McKee

WaggonerThere’s nothing that trumps ideology like the need for tax dollars. Such is the case in Alabama, where budget shortfalls are bringing state government around to the idea of a gaming compact with Poarch Band of Creek Indians. No negotiations are happening at the present moment but lawmakers are uttering conciliatory noises. “I think we need to put everything on the table and take a look at it,” said state Sen. Jabo Waggoner (R, right), while state Senate Pro Tem Del March (R) added, “The end goal should be: How do you solve the budget woes long-term in a fiscally responsible manner?”

However, Alabama Gov. Robert Bentley (R) is acting as a Continue reading →

Posted in Alabama, Boyd Gaming, CityCenter, Dubai, Florida, MGM Mirage, Politics, The Strip, Tribal | 1 Comment

Quote of the Day

Posted on August 18, 2014 by David McKee

MGM_Grand5“MGM [Resorts International] remains the most compelling way for investors to play a Vegas recovery paired with growth in Macao. With Las Vegas back in vogue, investors should turn to MGM as the best way to play this theme.” — Credit Suisse analyst Joel Simkins, in a note to investors.

Posted in Macau, The Strip, Wall Street | Comments Off on Quote of the Day

Exit Revel, eight days early

Posted on August 18, 2014 by David McKee

Labor Day has taken on a cruel, new meaning in Atlantic City, where it will mark the closure of revel_0323Revel‘s hotel. (The casino will stay open until dawn on Sept. 2.) This takes away eight days of employment that soon-to-be-jobless Revel workers were counting on. But, with Revel running low on money, perhaps this was to be anticipated. Obstacles to a sale are said to have included a freestanding, $36 million power plant that generates Revel’s heat, electricity, etc. And, as one expert says, “It was a hotel trying to support a casino.”

We’ve heard much about Revel’s bungled design and business plan, but it was also the right property for 15 years ago. As Continue reading →

Posted in Atlantic City, Cordish Co., Delaware, Economy, Harrah's, Maryland, Racinos, Revel, Steve Wynn, The Strip | 1 Comment

Tightening the screws in China; Comeback at Cosmo

Posted on August 15, 2014 by David McKee

 

In view of the outflux of currency from China, the country’s symbol seems not so much a Great Wall as a giant sieve. This was symbolized recently by the attempt to control UnionPay cash transfers masquerading as purchases in Macao. The government’s efforts are not entirely ineffectual. MGM China CEO Grant Bowie describes players as “more circumspect” in response to the new policies.

“Other methods of moving money are also disappearing,” reports the Wall Street Journal. “Jewelry counters on casino floors, where gamblers could do a quick buy-and-return transaction and come away with cash, have recently been shut.” This could manifest itself in diminished mass-market play. “The government isn’t turning the tap off,” one source told the WSJ. “But they don’t want it to get out of control.”

Macao casino floorNonetheless, governmental controls are expected to have a depressive effect on August play in Macao. Estimates range from a 2% increase to a 4% decline. When “anti-corruption” is the phrase of the day, it doesn’t behoove one to be seen betting large at Grand Lisboa. So far in the month, Continue reading →

Posted in Cosmopolitan, Dining, Economy, Entertainment, Macau, MGM Mirage, Regulation, The Strip, Wall Street | Comments Off on Tightening the screws in China; Comeback at Cosmo

Atlantic City: Worse to come

Posted on August 15, 2014 by David McKee

Resorts ACResorts ACIf you thought this year’s shrinkage of the Atlantic City casino market from 12 casinos to eight was bad, brace yourself. A Deutsche Bank report predicts more contraction to come. Resorts Atlantic City and Trump Taj Mahal have been marked for death by 2017. “By 2017, we foresee Atlantic City to have two center boardwalk casinos (Caesars and Bally’s), the Tropicana, and three casino hotels located in the Marina district (Borgata, Harrah’s, and Golden Nugget),” wrote the bank. Deutsche Bank analysts foresee Revel being revived — but as a non-gaming property.

“We turned bearish on Atlantic City in 2006 (and Continue reading →

Posted in Atlantic City, Boyd Gaming, Dining, Harrah's, Marketing, Maryland, Mohegan Sun, New York, Regulation, Revel, Tilman Fertitta, Tropicana Entertainment, Trump Entertainment Resorts | 2 Comments

Revel reprieved, sort of

Posted on August 14, 2014 by David McKee

revel_0606Ownership of Revel may have given up on the casino itself, scheduled to close Sept. 10. However,  they’re still trying to sell the property, indefinitely adjourning yet another bankruptcy auction in order to entertain “ongoing negotiations [with] certain potential bidders … As a result of these ongoing negotiations, and in an effort to maximize the prospects for a value-maximizing sale transaction,” the bidding has to be kept open.

Ironically, were it not for the spate of upcoming casino closures, Atlantic City‘s 2014 gross of $1.55 billion “would have put Atlantic City on track to reverse Continue reading →

Posted in Atlantic City, Economy, Politics, Revel, Taxes | Comments Off on Revel reprieved, sort of

Quote of the Day

Posted on August 14, 2014 by David McKee


“But a lot of people say when I left, that’s when it went bad.” — Donald Trump, in full self-delusion mode about Atlantic City. 

Posted in Atlantic City, Donald Trump, Economy | 2 Comments

“You lost the war”

Posted on August 13, 2014 by David McKee

It took a contentious, fist-pounding meeting, but the Tohono O’odham Nation has a done deal with Glendale, Arizona. The $400 million casino project will pay the city $26 million over 20 years. “What we are being presented with tonight is peanuts compared to Continue reading →

Posted in Arizona, International, Taxes, Tribal, TV | Comments Off on “You lost the war”

Dispatch from the Boardwalk

Posted on August 13, 2014 by David McKee

Revel_0966As Revel informs the bankruptcy court that it’s dickering with “potential” bidders, a new set of gaming numbers rolls in with the tide. Subtracting the Atlantic Club Hotel from the comparisons, Atlantic City is down 7% year/year. Online gaming revenue, up 6% from last month, cushioned the blow to the tune of $10 million. Slot revenue was down 9% on 8% less coin-in (slot hold was steady with last year) and a 17% decline in table play produced 17.5% less revenue.

Despite a microscopic increase in slot revenue, Borgata ($60 million) was down 6%. Table play was to blame. Although punters played only Continue reading →

Posted in Atlantic City, Boyd Gaming, Harrah's, Internet gambling, Mohegan Sun, Revel, Tilman Fertitta, Tropicana Entertainment, Trump Entertainment Resorts | 2 Comments

Las Vegas: From China, with money

Posted on August 13, 2014 by David McKee

As China pays closer scrutiny to VIP play — and where the money is coming from — it’s driven down the high-end action in Macao … and chinaredirected it toward Las Vegas. Said Telsey Advisory Group analyst Chris Jones, “One thing about Las Vegas that isn’t talked about a lot is that it’s easier to get a visa to travel from China to the U.S. than in the past.” Whilst the Chinese government cracks down on money laundering at home, MGM Resorts International, Wynn Resorts and Las Vegas Sands are poised to welcome their premium players with open arms — and a wider variety of gaming product than Wynn or MGM can offer in Macao. They also get to keep a much bigger tranche of their winnings, freed of Macao’s 39% tax rate.

“Typically we see a spike in Las Vegas gambling ahead of the Chinese New Year, in November, December and January. This year, the momentum never slowed down after the holidays,” reports Jones. Besides, “Macao mass market revenue can’t grow at a 35% rate in perpetuity.” Still, Jones sees this more as a honeymoon for Sin City. “We don’t think you will see Vegas become the ultimate place to go.”
 Continue reading →

Posted in Economy, International, Macau, Melco Crown Entertainment, MGM Mirage, Regulation, Sheldon Adelson, Steve Wynn, The Strip | Comments Off on Las Vegas: From China, with money

Station’s big quarter; Smoke gets in your slots

Posted on August 13, 2014 by David McKee

Although customers are holding their purse strings tighter, Station Casinos registered noteworthy growth in earnings last quarter. Powered by Graton Resort & Casino in California, Station reported revenue of $55 million, up from $7 million a year earlier. In the larger picture it red_rockwas a 2% increase in revenue. Cash flow was up 7%, despite being sapped somewhat by Ultimate Gaming. Disruptions to food and beverage service — part of a $55 million renovation — drove those sectors down but Station is getting a strong showing out of Red Rock Resort‘s new Mercadito — as well it should. “Despite the softness in revenues and some unanticipated costs, we were still able to yield significant flow-through this quarter,” stated CFO Marc Falcone.

“The big picture is that the economic indicators are better,” Falcone added. “Visits are stable, but customers are hesitant to spend. We’re still not seeing the levels of discretionary income we saw in the past.” Perhaps it’s partly a Continue reading →

Posted in California, Dining, Environment, Harrah's, Neil Bluhm, Ohio, Penn National, Pennsylvania, Pinnacle Entertainment, Racinos, Station Casinos, Tribal | Comments Off on Station’s big quarter; Smoke gets in your slots

The majesty of the law

Posted on August 12, 2014 by David McKee

Showboat_Atlantic_CityFor years New Jersey casino regulators have had to endure legislative backchat that they’re overstepping their authority. This week, lawmakers learned that such regulatory authority doesn’t extend as far as they thought. Even in its most dire straits, the Tropicana Atlantic City wasn’t forced to close. Now legislators are discovering that it’s faintly preposterous to ask the New Jersey Casino Control Commission to compel a casino to stay open against ownerships’ will.

“The commission simply does not have the authority to direct a casino licensee to forestall a business decision to cease its gaming operations,” Showboat ACChairman Matthew Levinson wrote to three solons who wanted the NJCCC to force the Showboat and Trump Plaza to remain open longer than planned. Levinson added that there is also no statutory authority to prevent removal of the gaming entitlement, as Caesars Entertainment did to the Claridge Hotel and Atlantic Club Hotel: “Deed restrictions are private, contractual covenants, and enforcement of them is a matter for the courts, not the commission.” Continue reading →

Posted in Atlantic City, Harrah's, Internet gambling, Massachusetts, Regulation, Sheldon Adelson, Steve Wynn, Trump Entertainment Resorts | 1 Comment

MGM’s comeback; Packer’s presumption

Posted on August 12, 2014 by David McKee

MGM Resorts International is feeling optimistic about getting back into Atlantic City (at a time when so many are getting out), to the point of talking about it publicly. “Borgata continues to be the market Borgataleader. We’re pretty excited to be able to regain our seat in the partnership,” said CFO Dan D’Arrigo. The company has good reason to be optimistic. PokerStars seems a cinch for New Jersey licensure now that the company’s “bad actors” have been expunged. Similar MGM figures who were engaged in sub rosa negotiations with Stanley Ho are long departed and Macao partner Pansy Ho has been reduced to a minority role. It’s time for New Jersey to let bygones be bygones.

Since it never sold its half of Borgata, MGM has a burgeoning trust fund of withheld revenue it can tap once it receives Continue reading →

Posted in Architecture, Atlantic City, Boyd Gaming, Genting, Harrah's, International, Internet gambling, James Packer, Macau, MGM Mirage, New York, Pansy Ho, Regulation, Singapore, Stanley Ho, The Strip | 3 Comments

SLS: The power behind the throne

Posted on August 12, 2014 by David McKee

Sam NazarianLast week, while I was out with an abcessed tooth, SLS Las Vegas had its turn before the Nevada Gaming Control Board. The management structure and financing were so complex that it took SLS nearly four hours to walk regulators through it. Over a quarter of the 3,000 jobs will be outsourced to EB-5 visa holders, mostly from China, mitigating the local economic impact. (How does it feel to be unemployed and see someone essentially buy a job at SLS because they have $500,000?) The extensive business holdings of SBE Entertainment CEO Sam Nazarian are taking so long to comb through that he was off the docket.

However, in what came as something of a surprise, it was revealed that Nazarian is only a 10% stakeholder. Ninety percent of SLS Las Vegas is controlled by Continue reading →

Posted in Foxwoods, Maryland, Regulation, Sam Nazarian, Taxes | 1 Comment

Revel calls it quits

Posted on August 12, 2014 by David McKee

revel_0409Enough bids were received for Revel to postpone a bankruptcy auction until Thursday. But yesterday the resort’s board met and decided to cease operations. Whoever wins the auction will inherit Revel’s carcass — not its 3,187 employees, who find themselves abruptly out on the street, effective Sept. 10. “Despite the effort to improve the financial performance of Revel, it has not proven to be enough to put the property on a stable financial footing,” Revel announced, blaming a “considerable non-controllable expense structure” that made “an orderly wind-down of the business at this time” unavoidable. New Jersey regulators say they can’t force it to stay open.

“We hope that Revel can be a successful and vital component of Atlantic City under a proper ownership and Continue reading →

Posted in Atlantic City, Harrah's, Regulation, Revel | 3 Comments

Caesars’ unmagical empire

Posted on August 11, 2014 by David McKee

Loveman tiredCaesars Entertainment ” hasn’t posted a profit since late 2009″ and it kept that perfect streak alive today, more than doubling its 2Q13 loss of $212 million. The company lost $466 million — and I don’t think we can blame it all on the discontinuance of Iowa dog racing. Overall revenues rose 3% but casino revenue was 2%. Caesars Interactive was way up, enough to nudge Caesars Growth Partners into modest profitability. Interest payments on debt were a staggering $654 million. The Linq and Vegas High Roller were not only draws unto themselves but drove collateral traffic to nearby Caesars casinos. This compensated for ‘meh’ business elsewhere in the Caesars empire.

CEO Gary Loveman‘s staking a lot on the opening of Horseshoe Baltimore and on unspecified “capital structure initiatives aimed at Continue reading →

Posted in Atlantic City, Harrah's, Internet gambling, Iowa, Maryland, Pennsylvania, Regulation, Reno, Revel, The Strip, Tribal, Wall Street | Comments Off on Caesars’ unmagical empire

Hard Rock rocks Sioux City; Chris Christie’s mighty pen

Posted on August 11, 2014 by David McKee

Lost in the loud death rattle of Argosy Belle Sioux City was the opening of its successor — some would say usurper — Hard Rock Hotel & Casino. And, contrary to what naysayers would have you believe, it’s bringing a salutary effect to local businesses. Or, as Work & Church Bar owner Mac Dolan puts it, “they opened and it was just wa-boom with people.” Also feeling the “wa-boom” is Funkalicious Boutique. ” [W]e’ve seen a huge increase with people from everywhere, as far as Norway and even people from Vegas,” reports employee Natalie Olveda. Good on them. Here’s to continued prosperity.

* Sen. Raymond Lesniak‘s crusade for unregulated sports wagering at New Jersey casinos and racetracks Continue reading →

Posted in Atlantic City, Economy, history, Iowa, Oscar Goodman, Penn National, Politics, Sports, The Mob, Tourism, Warner Gaming | Comments Off on Hard Rock rocks Sioux City; Chris Christie’s mighty pen

Reality in Illinois, Indiana; Optimism in New York

Posted on August 11, 2014 by David McKee

Illinois has had far worse months than July, which was down only 5%.
HarrahsJolietAdmissions were off 9%, implying a 4% higher spend/visitor. Rivers Casino was flat but still managed to gross double what Harrah’s Joliet managed. The latter, however, was up 6%, enough to negate a -9% month at Harrah’s Metropolis and lift the Caesars Entertainment portfolio 1%. Harrah’s Joliet was the only Land of Lincoln casino to grow its revenue, although Rivers Casino’s sanguine results and a mere 1% decline at Jumer’s Casino Rock Island helped make for a relatively stable month.

The Penn National Gaming portfolio took a moderate Continue reading →

Posted in Boyd Gaming, Delaware, Economy, Genting, Harrah's, Illinois, Indiana, Massachusetts, MGM Mirage, Neil Bluhm, New York, Penn National, Pinnacle Entertainment, Racinos, Tropicana Entertainment | Comments Off on Reality in Illinois, Indiana; Optimism in New York