Camptown Races; Concord in Boston

Posted on July 8, 2014 by David McKee

What if they gave a casino and nobody came? That’s what happened to Kansas, which drew nary a bidder on its fourth and final casino license, deemed by many to be too close to Oklahoma (rife with casinos) to be profitable. So the state’s holding a red-tag sale, knocking down the mandatory investment to $50 million. (Whoever develops the casino will run it on behalf of the Kansas Lottery — a highly unusual setup no one has rushed to imitate.)

No bidders have emerged yet but Camptown Greyhound Park (does Phil Ruffin still own that place? Yes, he does) is being pushed heavily as a location. Before you can say “racino” Continue reading →

Posted in Boyd Gaming, Carl Icahn, Columbia Sussex, Dotty's, Kansas, Laughlin, Massachusetts, Mohegan Sun, Oklahoma, Phil Ruffin, Steve Wynn, Tropicana Entertainment | 1 Comment

Station’s big hit; Tribal roundup

Posted on July 8, 2014 by David McKee

GratonThere’s no doubt that Graton Resort, less than an hour’s driving distance from San Francisco, has been a success for Station Casinos. We just didn’t know how much. In addition to earning a $7.4 million management fee during 1Q14, Station has the casino on pace for 28% return on investment. The investment community is enamored — and not just of the financial results. “From an aesthetic perspective, Graton reminds us of a more modern Red Rock [Resort]. The fit and finish of the property was done at a very high level,” said Credit Suisse analyst Joel Simkins. That’s as high a compliment as you can pay a Station property.

The Federated Indians of Graton Rancheria have been raking in the money so fast they’ve already repaid Continue reading →

Posted in California, Florida, Kansas, Regulation, Station Casinos, Technology, Tribal, Wall Street | 1 Comment

Quote of the Day

Posted on July 8, 2014 by David McKee

“I expect there will be for purposes of spending money but I couldn’t wait for them to get their act together, to be candid.” — Massachusetts Secretary of State William Galvin, on the lack of organized opposition to casino repeal.

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

Lean and hungry in the Midwest

Posted on July 8, 2014 by David McKee

Jumers_Hotel_&_CasinoIt’s difficult to find new things to say about Illinois, where the saga has become sadly familiar. Another month, another 11% decline. Even players’ darlings Rivers Casino (-4%) and Jumer’s Rock Island Casino (right, -14%) struggled. However, by some miracle, Penn National Gaming was able to manifest an 8% increase at long-suffering Argosy Alton. Except for Penn’s Empress Alton (-9.5%), all other casinos suffered double-digit declines, as the gnawing effect of slot routes shows its effect.

Even with its slight decline, Rivers Casino ($34 million) posted well over twice as much as MGM Resorts International‘s Grand Victoria ($14 Grand_victoria_casino_elgin_logomillion, -15.5%). Hollywood Aurora (-15.5%) and Harrah’s Joliet (-17%) were down in the dumps. In East St. Louis, Casino Queen celebrated its acquisition by GLPI (parent of Penn) with a Continue reading →

Posted in Boyd Gaming, Current, Harrah's, MGM Mirage, Neil Bluhm, Ohio, Penn National, Pinnacle Entertainment, Tropicana Entertainment | 1 Comment

Reno 2.0; Saturation in Ohio

Posted on July 7, 2014 by David McKee

All roads lead through Reno, more or less, if you’re dealing with Amazon.com. Now the Biggest Little City in the World is hoping to export high-tech instead. A corridor to that purpose, nicknamed “Startup Reno_skylineRow” has sprung up downtown. A city that was struggling for an identity 15 years ago and having to come to grips with a failing casino industry is now bidding for a Tesla battery plant. (“Reno is not far from one of the few lithium deposits in the country, it is relatively close to Fremont, Calif., where the vehicles will be assembled, and its industrial park has tens of thousands of acres of land for the auto company’s new expansive factory.”)

“Instead of poker payouts, Reno now boasts of e-commerce ventures, an Apple data center and a testing ground for drones,” reports the New York Times, which points out that Reno is but a four-hour drive from San Francisco. Unemployment has fallen to Continue reading →

Posted in California, Economy, Harrah's, Ohio, Penn National, Pinnacle Entertainment, Revel | Comments Off on Reno 2.0; Saturation in Ohio

A Grand attempt; The grandson also rises

Posted on July 7, 2014 by David McKee

If Newport, Rhode Island, is the American Riviera (or was once), then casino gambling would seem like a logical amenity. Would-be owner Newport GrandJoseph Paolino and his partners want to add table games to the Newport Grand slot parlor — but for that they’ll need the approval of the populace, who voted the change down in 2012. This time there will be two ballot questions: One to permit table games, the other to prohibit cainos from being moved without popular consent. (Talk about moving Nweport Grand to the waterfront helped defeat it last time.) At present the election looks like it’s anybody’s ballgame.

Newport Grand labors under considerable burdens as it is, including a 61% tax rate. The new arrangement, if approve, would guarantee $9 million to Newport over the next six years, then $1 million a year after that. (Double, even triple the city’s current take.) Profits have fallen sharply at Newport Grand this year, so there’s plenty of incentive to Continue reading →

Posted in Election, Michael Gaughan, Rhode Island | Comments Off on A Grand attempt; The grandson also rises

Atlantic City: Tide’s out?

Posted on July 7, 2014 by David McKee

atlantic_city_boatNew Jersey can’t add new casino or racino sites until late 2016, per Gov. Chris Christie‘s rescue plan. But lawmakers may not wait that long. A 2015 statewide ballot question to add new gambling jurisdictions is “a very real possibility,” according to state Senate President Stephen Sweeney. Coming from a stalwart Atlantic City defender like Sweeney, this is not good news for the Boardwalk. The city is still reeling from a tongue-lashing from Deutsche Bank analyst Andrew Zarnett, who wrote that “it’s time for operators and politicians to stop dreaming about a false Atlantic City recovery.” Zarnett opined that the present 10 casinos need to be winnowed down to seven, maybe even six. Harsh words.

Paradoxically, both Sweeney and Meadowlands casino enthusiast Asm. Ralph Caputo (D) tried to package the idea of additional, outstate casinos as Continue reading →

Posted in Atlantic City, Election, Foxwoods, Massachusetts, Politics, Taxes, Tribal, Wall Street | Comments Off on Atlantic City: Tide’s out?

Feeling Moody’s

Posted on July 7, 2014 by David McKee

Lago ResortHere at S&G, we don’t begrudge anyone their right to build casinos. But, in the larger picture, the evidence suggests that Massachusetts and New York State are sailing into the wind. Moody’s Investors Service surveyed casinos in 15 states and, despite an improving economy, found revenues to be down in all but one state between during April (-2%) and May (-1%). This has inspired Moody’s to downgrade its rating on the casino sector to “negative.”

We knew this day had to come, didn’t we? At some point, America was going to get so soaked with casinos that Continue reading →

Posted in Atlantic City, Harrah's, Massachusetts, New York, Penn National, Pennsylvania, Steve Wynn, The Strip, Wall Street | Comments Off on Feeling Moody’s

Beat-down in Beantown

Posted on July 2, 2014 by David McKee

WalshIt was Boston Mayor Martin Walsh duking it out in a cage match with Revere, Everett, Wynn Resorts and Mohegan Sun, for the edification of the Massachusetts Gaming Commission. Walsh tried to frame it as a debate on frugality: “It’s really about putting it off until after the ballot question is decided. If we go through all this work before the ballot question — whether it’s arbitration or whatever we do — and the voters vote it down, we spent tens of thousands of dollars in attorneys fees from the city of Boston.”

Rejoined Wynn’s Michael Weaver, “Wynn has diligently adhered to the current timeline laid out by the Gaming Commission, including filing our 4,000-page Final Environmental Impact Report yesterday. Any changes to the timeline would be unfair and burdensome to the applicants, the host communities and to taxpayers.” Everett and Revere officials added that moving the deadline to mid-November would deprive their cities of mitigation payments. Continue reading →

Posted in Election, Massachusetts, Mohegan Sun, Regulation, Steve Wynn | Comments Off on Beat-down in Beantown

Quad out, Linq in; Siegel in, Goldman out

Posted on July 2, 2014 by David McKee

It takes a big man to admit a mistake and Caesars Entertainment CEO Gary Loveman has tacitly acknowledged that “The Quad” was a mistaque. It’s on the way out, to be replaced with a re-re-branding of Imperial Palace as Linq Hotel & Casino. (Loveman sure does love those Q’s.) Compared to a somewhat tentative revamping of the IP/Quad to date, Caesars will now put $223 million into making it a state-of-the-property. That’s almost 100 grand per hotel room, plus “new retail and spa amenities and a new pool deck and a signature lobby bar.” With six table games, Caesars envisions the latter to be the new go-to spot on property.

The-LINQ-Hotel-&-Casino_Elev-LobbyThe success of the Linq mall, with its 34 shops, restaurants and watering holes makes the Quad look that much more (less?) underwhelming. Somebody had to step up to the plate and Caesars did. New bells and whistles will include making the hotel a giant Wi-fi hotspot and providing automated check-in (of course the computer won’t upgrade your room if you slip it an extra twenty).

I’ve never stayed there myself “[b]ut online reviewers Continue reading →

Posted in CityCenter, Colony Capital, Goldman Sachs, Harrah's, Marketing, MGM Mirage, Regulation | Tagged | 1 Comment

Australia: New promised land?

Posted on July 2, 2014 by David McKee

AustraliaAs Chinese visitation grew 36% in the last year alone, accounting for $7.75 billion dollars of economic impact, Australia is plunging full speed ahead into the race to be the next big gaming thing in the Pacific Rim. Hong Kong tycoon Tony Fung is planning to spend $7.5 billion — as much as Sheldon Adelson did on Marina Bay Sands, in Singapore — on a resort complex in Cairns. It would encompass “eight hotels, an exhibition center, entertainment precincts, a championship golf course and one of the world’s biggest aquariums.” A workforce of 20,000 people would be required.

Only slightly cheaper ($7 billion) is the megaresort proposed by Continue reading →

Posted in Arkansas, Australia, James Packer, Massachusetts, Sheldon Adelson, Singapore, Tourism, Tribal | Comments Off on Australia: New promised land?

Revel’s death spiral; Piling into N.Y.

Posted on July 2, 2014 by David McKee

revel_0494Having filed for bankruptcy a second time, Revel Casino Hotel is trying hard to stay off the auction block. Maybe not hard enough: A $300 million price tag is too rich for Caesars Entertainment‘s blood or even flush Hard Rock International‘s. With $447 million in secured debt versus $9 million in cash on hand, it’s hard to see how Revel stays operational. Union Gaming Group looks on the bright side: “Year-to-date gaming win through May is up 29.3 percent to $59.6 million. The new management team continues to make a number of positive operational changes to get closer to break-even. The property doesn’t participate in the state’s online gaming industry, as it remains laser focused on improving operations.” Continue reading →

Posted in Atlantic City, Churchill Hill, Cordish Co., Current, Genting, Hard Rock International, Harrah's, Mohegan Sun, Neil Bluhm, Penn National, Revel, Taxes, Wall Street | Comments Off on Revel’s death spiral; Piling into N.Y.

What’s in a name?

Posted on July 1, 2014 by David McKee

Quite a lot apparently, if you’re Wynn Boston and you’re going up against local favorite Mohegan Sun. A poll taken by the Center for mohegan005Policy Analysis at the University of Massachusetts Dartmouth found voters split between 48% in favor of Mohegan Sun vs. only 27% for Wynn. Casino expert Clyde Barrow attributed the outcome to Mohegan Sun’s standing as “known commodity in New England that is visited annually by hundreds of thousands of Massachusetts residents.” Of course they won’t go to the original Mohegan Sun if an offshoot springs up in Revere, but that’s a problem the Mohegan Tribal Gaming Authority brought upon itself. But if the Massachusetts Gaming Commission rules in favor of Wynn, will voters sour on casinos per se?

The same poll found Boston-area voters opposing casino repeal 46% to 41%, but with a big, 13% pool of Continue reading →

Posted in Atlantic City, Colorado, Delaware, Detroit, Economy, Election, Foxwoods, Illinois, Indiana, Kansas, Louisiana, Massachusetts, Missouri, Mohegan Sun, New York, Pennsylvania, Steve Wynn, The Strip | Comments Off on What’s in a name?

Isle for sale; N.Y. deluged in casino bids

Posted on July 1, 2014 by David McKee

islelogoConsolidation’s march has reached the doorstep of Isle of Capri Casinos. Or maybe it’s the other way around. Isle is reported as having peddled itself to several potential buyers over the last several months. Now it’s “weeks away” from a sale to Penn National Gaming parent Gaming & Leisure Properties and talks are in a precarious state. “A transaction, if finalized, would require the REIT to locate an operating partner for each of Isle of Capri Casino’s gaming operations.” I’m thinking that operating partner would be spelled P-E-N-N … barring any antitrust concerns.

* Several companies ultimately decided that casino bidding in New York State was too rich for their blood. Some of the more eccentric contenders are Howe Caverns & Casino (you can run a tourist trap then you can run a casino, right?) and Greenetrack‘s proposed Grand Hudson Casino & Resort — at Stewart Airport. The selection panel will find itself swimming in paperwork. In the end, five contenders had dropped out, winnowing the field to 17 filing 22 projects. As the New York Times implied, brand-name casinos seem to have the advantage. If promptness were a criterion, developers Tom and Jim Wilmot would win a gold star for being the first to file their documents.

Continue reading →

Posted in Colorado, Delaware, Genting, Hard Rock International, Harrah's, Isle of Capri, Neil Bluhm, New York, Penn National, Racinos, Wall Street | Comments Off on Isle for sale; N.Y. deluged in casino bids

Quote of the Day

Posted on July 1, 2014 by David McKee

“For Las Vegas, the route to growth and success is doing events as opposed to more slot machines. For a number of years, it will make a great opportunity to have events and then somebody it’s going to be a great place to build a resort or hotel, but that’s someday.” — MGM Resorts International consultant Greg Borgel on the company’s planned, North Strip festival site.

Posted in Entertainment, MGM Mirage, The Strip | Comments Off on Quote of the Day

Gearing up for fights in Massachusetts, California and Arkansas

Posted on June 30, 2014 by David McKee

Expect a deluge of dollars to be spent opposing or supporting a casino-repeal ballot question in Massachusetts. Unlike political campaigns, ballot questions have no spending limitation attached to them. So far, the biggest amount spent on a ballot question in the Bay State is $13 billion, but the recent, $90 million brawl over Prince George’s County, in Maryland, shows how the dollars can mount up when gaming’s at stake. At least one voter is persuaded. “We need jobs and money for education,” she told a reporter. “I don’t think the sky will fall if we have a few casinos.”

Steve-Wynn-Chairman-of-the-Board-and-CEO-of-Wynn-Resorts-Limited-e1395978569748-1023x1023* It hasn’t escaped Steve Wynn‘s notice that the Massachusetts Gaming Commission chose Penn National Gaming‘s Plainville racino project in part because it will help prop up horse racing … to the point where one wondered if the odds were stacked against Wynn Boston. As a countermeasure, he’s offering hiring preference to employees of Suffolk Downs, which has threatened to huff and puff and go out of business if it doesn’t get a casino — or else. This doesn’t Continue reading →

Posted in Arkansas, Bally Technologies, California, Election, Entertainment, Internet gambling, Maryland, Massachusetts, Mohegan Sun, Penn National, Racinos, Regulation, Shuffle Master, Steve Wynn, The Strip, Tropicana Entertainment | Comments Off on Gearing up for fights in Massachusetts, California and Arkansas

D-Day in New York

Posted on June 30, 2014 by David McKee

Seal_of_New_York.svgToday’s the day to get formal bids in on New York State casinos. In the process, the search criteria have been stood on their head by comparatively affluent Orange County, which now dominates the bidding, economic regeneration be damned. Liberty supervisor Charlie Barbuti, whose Catskills town was deserted by Foxwoods, says, “This is turning out to be who can generate the most revenue for the state. We can’t generate the same revenue as those closer to a city of 8 million people.”

Since the state is looking for a $430 million pot of gold at the end of the casino rainbow, don’t imagine that Orange County — Continue reading →

Posted in Colorado, Economy, Foxwoods, Internet gambling, New York | Comments Off on D-Day in New York

Showboat: The autopsy; Penn: We’re outta here!

Posted on June 30, 2014 by David McKee

Showboat ACLeaving aside the human effect, in cold business calculus, Caesars Entertainment‘s closure of the Showboat Atlantic City makes sense. At least that’s what Mayor Don Guardian is saying echoed by Wall Street. “The closure makes financial sense for Caesars and is a positive for the oversupplied Atlantic City market. Showboat has about $50 million in labor costs and pays about $15 million in property tax (although Caesars is appealing Showboat’s $625 million assessed value). Caesars will likely recapture most of the Showboat customers at its three other resorts in Atlantic City,” read a Fitch Ratings investor note.

This verdict is echoed by other bond analysts, like UBS’ Srihari Rajagopalan, who said, “You are seeing the market right-size, which is a positive.” It’s hard to argue against the proposition that a leaner Boardwalk would be better positioned to compete against Pennsylvania and New York, not when the revenue pie was being sliced so thinly (Borgata always excepted). Continue reading →

Posted in Atlantic City, Boyd Gaming, Delaware, Economy, Harrah's, Massachusetts, New York, Penn National, Pennsylvania, Racinos, Taxes, Wall Street | 1 Comment

Quote of the Day

Posted on June 30, 2014 by David McKee

“The situation is as bad as you can imagine. It’s just going to be screwed. And relatively quickly. Unless it can find a way to get more water from somewhere Las Vegas is out of business. Yet they’re still building, which is stupid.” — Scripps Institution of Oceanography climate scientist Tim Barnett on the drought that afflicting Lake Mead.

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Argosy’s charmed life; Paging “Jersey Shore”; Boyd’s (alleged) botch

Posted on June 27, 2014 by David McKee

It’s The Perils of Pauline over at Penn National Gaming‘s Argosy Sioux City. A July 1 closure has been stayed until July 10 while Judge Eliza Ovrom ponders the merits of the case. She’s scheduled final arguments for the 10th, leaving Argosy teetering on a precipice. Judge Ovrom calls the stay “breathing room” while she combs through the pros and cons. “I don’t think there’s significant harm to any other party by this brief stay,” she said.

Penn attorneys made the argument that no one was being harmed by keeping the casino open until Aug. 1. An attorney for Hard Rock Hotel & Casino Sioux City responded,  “The court can’t give them what they don’t have, which is an agreement with a [nonprofit].” Ovrom’s timeline still gives Penn time to appeal to the Iowa Supreme Court before Aug. 1. Iowa Assistant Attorney General John Lundquist faulted Penn for being dilatory in appeal its shutdown date, precipitating the crisis: “”If this harm was so great and apparent going forward, why weren’t we litigating this case weeks ago, rather than wait to today?” Continue reading →

Posted in Boyd Gaming, Charity, Cretins, Iowa, Mississippi, Penn National, Regulation, Sports | Comments Off on Argosy’s charmed life; Paging “Jersey Shore”; Boyd’s (alleged) botch